Supportive vs. Stressful Debt: How Entrepreneurs Can Leverage Capital Without Getting Crushed (With Jacob Clopton)

with Jacob Clopton

Mar 5, 2026 · 00:42:02

So think about your debt lenders like partners, but also partners that can really turn the screws on your business. If they become an outsized part of your monthly cash flow, that's way too much debt. You want them to be something that is manageable and something that is not the first thing you think of, mainly because your business might maintain over time, but you, if you have debt burden, are so much less likely to take on risk.

Jake Clopton, welcome to the podcast. So good to have you here.

Thanks so much for having me on, John. Appreciate it.

Yeah. So first, I wanted to ask you a little bit about the idea of debt in new ventures, because I know that's something you've got some experience in and you talk about it. So talk about supportive versus stressful debt and how entrepreneurs should look at debt for their companies.

Okay. So as background, I have owned and operated a commercial debt brokerage for 20 years. So definitely something I have experience with. I mean, listen, debt is leverage, right? And anytime you have leverage, there's positive benefits, but it also comes with risk, right? And debt is one of those things that When you, when you apply it the right way, it is a net positive. But when you overdo it and/or it's mismanaged and mis— mismodeled, right, it definitely becomes for a lot of folks the thing that takes their businesses down. Right. I mean, what's the first thing that you hear about when, you know, businesses are starting to struggle and go out of business? They can't pay their creditors. Right. So that's the number one thing. So, you know, I mean, the supportive debt is something that's just going to allow you to do more business, and access more liquidity than you would with what you currently have. Restrictive debt is just going way too far with that concept, right? Getting ahead of yourself, taking on too much debt burden, not understanding— a lot of this comes from maybe just projections that weren't hit or they weren't modeled appropriately, right? And/or you just didn't really understand how much margin you should have of your debt payments versus what your business currently makes. So, every business is going to be a little different. A lot of what we do in our debt brokerages is real estate and other operating business debt, like manufacturing companies, stuff like that. So everybody's a little different, but it's definitely something that used the right way is great. Used the wrong way, it can kind of be the nail in the coffin for a lot of businesses.

I can remember in my business in the early days, like when I wanted to use a little bit of debt or when I had a project that was going to take more capital than I had, on me. I remember trying to almost brute force my way with the banker to get them to agree to it. But then what I realized over time was that, you know, if, if the bank says, it's not a good idea, then I should start thinking to myself, maybe this isn't a good idea, right? Because the entrepreneur has this inherent optimism that, yeah, of course, this is going to work. The commercial lending officer or the banker is like, here are all the reasons why it might not and why you might get stuck with this liability that you can't pay. So I always thought that that was kind of I guess, an interesting learning for me afterwards. But something you mentioned earlier made me think of, you know, just how to approach this. So can you talk about like coverage ratios and things that entrepreneurs should be thinking about? Like when they, when they want to go to somebody for debt, what are some of the things they should have in mind? And like personal guarantees, coverage ratios, that sort of thing?

Anybody in the startup space, starting a company, expanding, all this stuff, You're going to personally guarantee the debt. It's just going to happen inherently, right? Like non-recourse type financing, that's debt without recourse for the most part. Like, sure, you can get a corporate guarantee, but that's only if this company has longstanding financials and a balance sheet and all this stuff. Every once in a while, I get somebody calls me up and tells me they start an LLC and they want the LLC to guarantee it. I'm like, that would be a nice loophole, but that's not how it works. So you're just going to guarantee this debt. Right. Coverage ratios is— it's a simple question with a complicated answer because really what it comes down to is how much cushion do you need, right? Like how many pennies for every penny of debt service do you really need? And I think that answer is different depending on what your business is. And I think the best way to look at it is your business is in your equity, right? You take equity risk. And everything over your debt payments is equity risk. And you got to understand that there's always at some point going to be a disruption in what you have going on, right? A good example, and it always comes out of nowhere, you don't see it happening. A good example is when I was early on in our company, we got very reliant on SEO marketing. We were the top result for most of our keywords in the entire country. This is where all of our business was coming from. overnight, Google came out with an update and completely wiped away all of our search rankings. So from one day to the next, it was like, great. The next week, we didn't even exist. So that's a good example of a disruption, right? Thankfully, I didn't have any debt, so we were perfectly fine and went through. But think about it if you had debt, right? Those lenders, and this is why I brought up earlier equity risk versus debt risk, right? Those lenders don't take equity risk. They don't take business operations risk. They don't take like that. They're expecting their payment next month every single time, no matter how much disruption there is in your business. And if you don't have enough cushion over those debt payments that you're planning on making, you're not going to be able to continue to make them, right? So, how much margin you need over your debt is really dependent on how exposed your business is to some sort of disruption or something like that happening. A good example of a low-risk business is like an apartment building. I can go down to like a 1.25 over 1, which is $1.25 over every— or maybe even lower, right? Because it's a very stable product and there's a very low likelihood that it's going to go below there. For other— if there are businesses without assets, And stuff like that. Those are businesses that maybe have high fluctuations in revenues and they're seasonal and stuff like that. So, you're going to need a lot more cushion over your debt payments, probably significantly more. So, that's why I say it's a simple question with a complicated answer. It really depends on how much exposure to income variability there is and how much assets this company holds, stuff like that. And it's just going to be different for everybody.

Yeah. And when you're brokering debt deals, like what are some of the things you've seen that, that just resulted in, you know, killing the deal or, or some, what are some of the things that are just non-starters? If you have like maybe some interesting, funny, or entertaining stories.

Usually one of the first ones is, you know, 100% financing. I thank you very much. Not for us. That's not gonna happen. Right. You know, the other thing, you know, one of the others.

Why is that? Because, because I hear that from a lot of entrepreneurs, right? They're like, oh yeah, you know, I need to borrow $100,000, I need it all because I don't have any. So what is the— I guess what's the rationale for people so they understand like why 100% financing is just a non-starter?

I mean, just the, the, the very first thing, right, that is top of mind is skin in the game, right? There is a big difference between if somebody has money in something, their own money, versus if they have none. Right?

Yeah.

They're just one. If you're taking your own risk, you're going to evaluate those risks you're taking much more carefully than if you're playing with other people's money. There's no question, even if you're personally guaranteed on it, because that road to that personal guarantee from that lender, that is a long road. There's the skin in the game aspect. There's the inability most likely to collect. But also, lenders look towards a certain loan-to-value against businesses and assets so that they not only can recover from the person, but if they have to go after assets and recover them, they're not getting dollar for dollar on those assets. They're going to get some— like whenever, let's say, a bank repossesses a car, they're not getting fair market value for that car. They're getting some much lower discounted value. So they're going to lose money on them. So that's why I'm kind of throwing every type of lending I can into this answer. That's why you're always going to see lenders need some sort of cash into the deal. There are some interesting exceptions which sound like 100% financing, which they're really not. Like if you have an existing business and you've already committed a lot to it and there's cash flow and Let's say you lease a piece of real estate and you want to go purchase it. Technically, there is a way to finance 100% of that purchase, but you've already built this business around it. And you know what I mean? There's stable cash flow. But if you're doing a startup, you're buying new assets, stuff like that, you're going to have to put some money in this thing.

Right. Yeah. So when you're brokering these debt deals, is the person's character that important? Like, I know a lot of people like to work with local community banks because they get to know the person, but Sometimes that's just not an option. So like, do your lenders really get to know the borrower? Or is it really just based on the underwriting standards? And that's it?

The larger the deal gets, the more personal character-ish, you know, type, you know, qualifications come into play. There's a huge difference. And I mean, I get it, it seems like a loan would be very black and white, this property or this business, it makes money, they pay the loan, blah, blah, blah. But at the end of the day, Everything is people, right? At the end of the day, people are lending the money. They're the ones standing by the bank. At the end of the day, the guy behind the business, he's the one paying the bills. And there's all— there's— I see so many complications in these deals just because, you know, some borrower gets mad about or feels like, you know, something in his loan is unfair, so he'll just stop paying it. Right. If you're that tight, I mean, that happens. That absolutely happens. And it'll happen on really large stuff and for no reason. And then the bank is kind of in a bad position. They're like, well, what do we do? We know he can pay, but he's trying to negotiate and we can foreclose, but that's a 2-year process and all this stuff. So, yeah, there's absolutely a character aspect to it. when it comes to background searches and stuff like that and maybe criminal records or blah, blah, blah, stuff like that, there is a much heavier weighting, which makes sense, right, to financial things versus criminal stuff or drugs or I don't know, stuff like that. A good example is 10 years ago, I was able to lend of like $5 million, not me, but I was a broker, like $5 million worth of loans to a family. And one of the owners in the family was in prison for murder or something like that. Okay. At the exact same time, I got denied with another deal because the guy had some financial fraud thing that wasn't even remotely as big of a deal. So, you can see, which makes sense when you're lending money, the biggest concern is financial fraud, especially like tax fraud and stuff like that. Like if you're willing to screw over the government, you're definitely going to screw this bank over.

Yeah, that's probably a good point. And, you know, I talk to my students and entrepreneurs that I coach and mentor all the time about the difference between debt and equity, right? I mean, there's, there's, there's a place for both. And I was wondering on your— like, what do you see in terms of the types of collateral? Like, I know like hard assets are really good, but is, is accounts receivable like a favorable type of collateral or is it looked at unfavorably? Because some businesses, like especially service businesses, for example, they don't have a lot of stuff, but they have AR. So I was wondering how important that is.

Yeah. So there are specific products for all these different types of lending, right? There's certainly real estate loans, right? But then there is accounts receivable finance. There is factoring. There's purchase order finance. There's, you know, merchant cash advances, which is based on your credit card sales. You know, so, you know, if you are a business and you have accounts receivable, yes, there is a way to lend against those. If you have— if you're a business and you have purchase orders, right, and they're legitimate purchase orders, yes, there's a way, you know, to lend, to advance money to fund those. You know, working capital is one of those things that's probably one of the more difficult ones, right, where it's like unsecured and you have to prove cash flow stuff. Like, it's a lot of private lenders that do that. Merchant cash advances, something I would stay away from unless it's your absolute last resort. Like, the interest rate on those things is like 40%, but a lot of people get stuck and they have to go to them, but you can never get off them. So yeah, I mean, there's— depending on what you're looking for, there is a specific product for that type of stuff.

Gotcha. Yeah, and I think that's the important thing, is to match up the type of capital you need with the type of situation you're trying to find it for, right? Because it's not Even though, yes, money is the same, I guess the way you're using it should match up to what you need it for or what you're backing it up with, right?

Right. Yeah. Like the way I usually put it is like, hey, it's the same dollar. It's all money's the same, but sometimes it has different personalities. Exactly.

Yeah. And I remember when I was younger in my entrepreneurial journey, I was using, you know, long-term debt to, you know, finance short-term capital needs. And it wasn't until I really started to understand my balance sheet that I thought, oh God, this is, this is going nowhere fast. And I need to recapitalize and kind of get my balance sheet sorted out. So yeah, it's a, it's a hard lesson to learn, I guess, sometimes.

Long-term liabilities based on short-term assets is, you know, that's tough.

It definitely was a recipe for disaster for sure. I still wake up with sweats. Sometimes over that. But I want to go to your origin story, because you— it's really interesting that you started this during a major financial crisis. So not only did you start a company, but you did it in an environment that was not especially, I guess, forgiving or easy at the time. So talk us through a little bit of that period.

I used to trade interbank hedging product futures. And at the time with 3-month LIBOR, which no longer exists, and Fed fund futures, stuff like that. And I traded through Lehman Brothers collapse, all that stuff. And then one day our market just basically evaporated and all the credit just dried up. And that's never going to happen again, right? There's too many backstops in the credit system for that to dry up. Like the Fed will just They'll just flood the market with liquidity. But the biggest issue was nobody could find credit, right? And so, while there was basically no trading that could be done, I had the idea to kind of pivot industries and help people find credit. I didn't really know what a brokerage was. I think I was like 24 or 25 at the time. And I was like, well, this would be a good time to kind of get into this industry. It was my idea. Like, it's actually much easier to enter industries when there is a disruption than when it's at its height, right? When— because think about it, like, when some industry is frothy or it's at its height and it's firing off on all cylinders, everybody's got a guy, right? Like, it's saturated. All the players are incumbent, you know what I mean? Everybody's talked to people, they have relationships. But when the disruption happens, everything gets shook up. People go away, people leave the industry, you know, businesses, you know, that are incumbent go out of business or they can't, you know, and like the customers or the clients, they're looking all over for new relationships. And so what I did was really cold call people straight for 2 years. And because of what was going on, even though I was brand new and also young, you know, they were willing to try new outlets and build new relationships and, you know, all this stuff. So I think that's really what helped me a lot is build relationships in the business was entering at that time, which it's counterintuitive. You would think that would be the worst time, right? And it took a while to close deals and make money because there wasn't much going on, but I was able to do so much relationship building that amount of time. And I don't think I ever would've been able to if I hadn't started then the way that we did.

Yeah, that's a great point about just disruption in an industry. making it ripe for some sort of, you know, new entrant or innovation or something. So yeah, even though it was, you know, the financial industry's collapse and you kind of coming in and starting this financial company, it wasn't, it wasn't just bad timing that you planned on starting it. It sounded like the thing collapsed and you said, hey, we've got to have an answer for this, right? And part of it was probably survival, I'm imagining.

Right. So I mean, it was, I saw what was happening. There was the residential mortgage crisis, right? And At the same time, everybody was talking about, oh, the next wave is a commercial mortgage crisis and the commercial loans and this and the other. And I was like, well, there's a need. I don't know how to fulfill it yet, but there's a need to help people find money. And I'm like, well, I don't have money to lend people, but I can make transaction costs by facilitating the transaction. So, that was the idea. I never worked for a brokerage. I didn't work for a bank. My banking background was hedging interest rates. But that's a lot different. So I mean, I really just started the whole thing making phone calls and just calling everybody I could to try to find money. And then at that time, if you found money and somebody was lending, people would just kind of come.

What was the very first deal you brokered when you started? Like, what was the first one?

I think the first The first deal I brokered was, it was small. I think it was like a gas station, to be honest. I think it was like a $5 million gas station we financed around here in Chicago. It was just somebody local that I got in touch with and they couldn't find financing and we put it together. I think the next one I financed was a $15 million acquisition loan for a retail center in Mississippi. And then it's just been a ton since then.

Yeah, no, it's cool. But I'd imagine you always kind of remember that first one as like, yes, we finally got there, right?

And what was the late— Yeah, it wasn't even yes, it was like, oh, thank God.

Like, this could work.

6,000 phone calls later. Yeah.

Yeah. Well, that was my question. Like, how long did it take from the time you started dialing to the time that thing closed? Like, how many months had elapsed?

A lot. I mean, the thing is, I didn't know what I was doing and I had to teach myself the business. But because I taught myself and I never worked for somebody else, I have a different way of approaching things than a lot of people do. And kind of like what I've built since then and what we do is a lot different. So since that time, I've moved our company into a commercial real estate services firm where we know— I still run financing, but we also integrated a national commercial property insurance company. We do buy-side representation to find property. We do commercial solar. We have an in-house 1031 QI, which is tax-deferred exchanges. So I'm always looking at ways to help try to monetize what we do. And I think that kind of goes along with being an entrepreneur, right? My job is not to be the best finance guy, like brokerage that's out there. My real job is to figure out the direction of the overall company because not only do I have to come up with capital advisory strategies, I have to do the marketing, I have to do the tech stuff, I have to decide which direction to go with tech, what technology we want to integrate, and now how to integrate AI into what we do. And There's just so much more that goes into it. And it's, you know, anybody who started a company, you know, and knows the personality difference between somebody who's a salary guy and somebody who's a startup business guy. And I'm like, listen, there's no, like, I don't think about, oh, that's not my responsibility. Everything's my responsibility, right? And then I have guys that want to be my partners and I'm like, hey man, where are you? And they're like, what? It's 5 o'clock. I'm like, all right. Yeah, no, like, no, that's not, that's not how this works. So if it's 5:00 AM, maybe, but no. Got it.

Yeah. Well, so that leads me to my next question, right? Like just, you know, talking about, you know, this idea of work-life balance and when do you turn it on? When do you turn it off? So with everything you have going on, how do you keep yourself grounded? How do you prioritize your mental, physical, and spiritual health? What's your stack look like?

The more effort I reserve and I put into, you know, like especially physical health, right? Like if you think about yourself as an asset to your business and your body being like the hardware and your brain being the software, you know, like here's, here's a good example. If you get sick, really hard to work, right? But like the more energy you have, the more focus you have. I mean, you're just gonna be able to apply all of that to the business. And so, I've gotten really good at being efficient with time and prioritizing physical health and mental health and spiritual and family and social life, but also at the same time, having enough time to run several different companies even outside of the debt brokerage. So, what my day looks like, and I'm single, I have 3 kids, So like I take them to school, drop 'em off, you know, and then I block off all of my calls in the morning to go run and work out usually until like 10 o'clock. And then it's nonstop calls and Zooms and podcasts and stuff all day. You know, something that helps me tremendously with, you know, what I do, which I, it took me a very long time to learn to be able to do, was delegating things that Personally, I don't think make money but are important to the business. And so for me, delegating things that I like, I don't need to touch to be able to bring revenue into the company and being able to focus on just those things myself is really important. So like good time management skills, you know, making sure that I keep time, you know, in the mornings to work out and everything. Definitely spending time with family and taking care of the kids and everything. And yeah, I mean, it is a lot of good time management skills, but I think once you learn how to do it, it becomes easy and, you know, keep a routine and that's really how you get there.

Yeah. When you were talking about delegation, that is so important because I talk to and meet a lot of founders that kind of cap out at $1 million in revenue. And my observation, you know, I haven't done research on it or anything, but my observation is that they usually can't exceed $1 million in revenue because They're still doing everything and they think that's the way to grow. Yet, you know, clearly you're an example of that being not the case. So talk a little bit more about your team. How do you manage your team, the delegation, and how do you let that go so you can kind of elevate yourself to work on the business instead of being in the weeds?

The best way I can analogize this to is going to college, right? Like the only credit that really matters is the last one. All the rest of them were just leading up to that, right? And so it's like, okay, so how do I drill down to the things that I have to do to be that last credit, right? The one that actually gets me the degree, the one that actually makes me money. And then identify those and then work on setting up— first of all, you've got to learn, be able to do this stuff before you can delegate it. I feel like a lot of people try to lay everything off to other people before they actually do it themselves. And I'm like, no, you don't even know how to do that yet. So, but you know, once I, once you've identified, you know, what your workflow is and then what areas of it actually don't make money and, you know, where you actually need to be involved, then I can start partitioning it off and laying it off to other people as like a workflow. The risk that I have, that I've identified in the workflow and the biggest one, and also the thing that I think most people get really nervous about is getting too dependent on other people and being like, well, what if this person leaves? And I'm Well, make sure that the positions you create are interchangeable and that there's enough of them so that you're not completely dependent on one person, right?

Yeah.

So, what I put it together is kind of like a conveyor belt, right? So, for the debt brokerage, deals come in, one person does initial deal intake, then it can move on to the next person to try to do underwriting, then it can move on to getting out to lenders. Then it can move on to signing terms, you know, stuff like that. And it's just kind of like each part, you know, is its own defined area. And then in between those, I have my own personal checkpoints to make sure things are going well. But, you know, it's, it's not very time consuming, right? So the whole idea is I'm never going to be able to do more than just I can unless I leverage other people's time, right? But making sure that I'm not taking too much risk. on one person and being dependent on them and making sure that I also can maintain these stop losses of control so that we're not screwing up. That was my thought process for how I'm going to— and the same thing, we got capped off to a million bucks of revenue 10 years ago. I was like, I only have so much time in the day. How do I do this? And it's just like, there's no other way around it.

I noticed that in the founders that I work with who have ADHD. They do all the work, they're in the because they just think, you know, they can do it better than anybody else, or they just don't have the time, or they can't understand how to put together a process or a standard operating procedure, right? Because like you said, I think one of the biggest roadblocks or mental blocks to that is it's just easier to do it myself because I know I'll always be here and I'm gonna do it. And if I pass off to somebody else, what happens if they're not there? But that's where the process and the procedure comes in place. And that to me seems like one of the biggest hurdles for people to get over. Once they can do that, life changes. Like you're, you're not in the weeds, you're growing, you're overseeing, you're kind of marching forward while, you know, the, the company just, just keeps growing. So I, I think that's an important factor for sure.

Yeah. Right. Absolutely. And I mean, listen, if here's a, usually a pretty good example, like if you're running this company and you're still the person that answers the phone when somebody calls your 800 number, You have not delegated things properly, or you're still the guy that's setting up all these Calendly meetings or whatever. Extrapolate this over 10 years. Even if you have these 30-second tasks, when you do thousands of them over, you know what I mean? And you put this all together, this ends up being weeks of time. You know what I mean?

Yeah.

And when you're constantly changing gears between what you're doing, like, if I'm trying to— the value that I bring is being creative, coming up with new ways to do things, looking at the business. Every time I have to stop what I'm doing to do some administrative thing or something that doesn't make money, I'm off gears and it is what it is. And every time I'm chained to my desk and I can't go out and learn new things or talk to people, Again, it just hamstrings you. So there's just so many reasons why, you know, unless you're leveraging other people's time, you've delegated things correctly, like you, that's why you get stuck. And, and I think that's what you're talking about. Guys that stuck at, get stuck at a million bucks, that seems to be about the ceiling that a one-man show can do unless, I don't know, you're running some AI tech company or something. I don't know. That's, that, that's not me though.

So, yeah. So where did the wheels fall off the bus for you personally? So what, like what's going on when you're feeling, you know, maybe a little bit disreputable? When you're dysregulated or stressed, or how do you know when that's happening? And then what do you do to pivot?

I mean, I've been through some pretty deep periods of stress. Usually the ways that I do it is my response is usually just to kind of dig in harder. I end up going to the gym more, right? That's— and I run a lot, right? So I run like 5 miles a day, maybe I'll run like 7 or 8. So that's a good stress reliever. My response is usually, you know, and I've been an entrepreneur for long enough, right? I know that if I stop what I'm doing, I'm only screwing— like, if Jake wants to stop today, he's only screwing over Jake 6 months from now. You know what I mean? And 6 months from now, this, whatever this is, will be over. And you know what I mean? I, I, you know, I don't know how many recessions everybody here is that's listened to has been through.

Yeah.

But I've been to like 4 over the past 20 years. It always comes back. It's always stressful. It always feels like the end, or there's always a personal thing that goes on and there's always something, right? But you've gotta find a way to have a positive response so that, you know, when you're coming out of a stressful period, you're actually, you have more character. You, there's a character, but you know, you know what I mean? You know, and when, and I know people that, you know, when they get stressed out, they go into the hole.

Yeah.

Right. And then they're digging their way out and maybe they're not even at the same level when they come out of it. I don't know what separates one person from another, but I think just it's how you direct the stress and how you manage that going through those periods. And what I've found is, you know, one, focus on what you can control. 90% of all the stuff that goes on, especially in those stressful periods, is completely out of your control anyways. It's like getting on an airplane and being worried that it's going to crash. Well, there's really nothing you can do about it. I don't want to suffer twice. I don't want to be freaked out that it's going to crash. And then if it actually does, be freaked out then. In the meantime, just, it is what it is. Focusing on what you can control day to day is extremely helpful because once you realize the narrow band of things that are actually within your control, it becomes very easy. And then when you're only focusing 100% of your energy on those 10% of things, I think you'd be surprised how quickly things change around.

Yeah. So it sounds like it's mindset, right? It's, you know, and I've always, not always, it took a while to get there, but like you, you know, you've seen 4 recessions and, you know, my attitude is, yeah, this too will pass. So nothing lasts forever, the highs or the lows, right? So when you're riding high, It's really important to appreciate where you are. And likewise, when you're riding low, it's like, hey, this kind of sucks right now, but it's going to change. So it sounds like you've got that mindset that really helps and fortifies you to be able to do what you're doing.

Yeah. I mean, it's just, and also knowing that, you know, yeah, you're right. It is up and down, but when you make the right decisions, you know, like you're, let's say everything reverts back to the mean. mean, right? And you look at, you know, your success of whatever you think that is on a graph that, you know, either goes directly across or upward over time. And the, you know, the one that goes upward over time is somebody who's, you know, focusing on what they can control and making those right decisions. But it's not a straight line, right? It's a, it's an up and down like that. But knowing everything reverts back to that mean in some way. So when it's, when it's, you're high, you know, at some point something's going to happen that's going to bring down. And it's the exact opposite when it's down, you know, eventually it's going to revert back and average out. So exactly right. I mean, just, I would never be surprised when great things happen. I'd also never be surprised when they're the challenge, you know.

Yeah, yeah, mindset is key. So I wanted to talk to you about a few other things too, and, and we didn't talk about it earlier, so you might not be prepared for these, but I've been taking a really deep dive into sleep. Lately because I've just noticed that I perform better. So, what's your sleep routine if you have one or how do you treat your sleep?

Well, I can tell you when I don't sleep, that is one of the hardest times to focus. I feel like I'm just kind of going through the motions of the day. There's a good book, Sleep Your Way to the Top, that explains a lot of this. A lot of people— yeah, I don't know how this happened, where a lot of people were sold on this idea that you're supposed to get less sleep. And because of that, that means you're working hard and get up at 5:00 AM and all this crap. Like, I did that through my like early 30s. Like, I got up at— I was like, all right, I do the Arnold Schwarzenegger thing, right? I'm gonna get up at 4:30. I'm gonna go to the gym. Only people were there were like me and like baggage handlers from the airport that got off later. You know, I'm like, I mean, for some reason, it feels like you're accomplishing something, but you're really just depriving yourself of higher brain function, honestly. And I'm not saying to oversleep by any means, and I'm not saying to sleep till 10:00 AM every day, but I don't think successful people— I don't think there's a correlation between successful people about getting up at 5:00 AM or 6:00 AM or whatever. You know what I mean? I mean, I try to get between 6 and 8 hours. I don't think I need more than that. Everybody's different, though. I mean, I got up at 5:30 today, but that's only because I had to make 3 kids' lunches and get them to school by 7:00. So, otherwise, I would not have gotten up at 5:30. But sleep is just one of those things where, again, you take care of your body like it's an asset of your business. And sleep is one of the most important parts of that that keeps everything else functioning.

Yeah, no, I like that. Treat, treat it like an asset. Yeah, for sure. And what about the fuel? Like, so you go to the gym, you run, so you've got a, you've got a wellness fitness mentality, right? So how do you, how do you fuel your body or how do you view that?

Diet is, especially at my age, right? 42. Diet's one of those things where it's exceptionally important now. I know when I was 20, I could eat a bag of Doritos and do 10 sit-ups and I was in shape and I had a six-pack, right? That's just not how it works now. I do notice a very big difference to eating healthy and clean, and it just goes along with just being healthy in general versus eating crappy food. Personally, I have a really strict diet. I don't eat any fried food. I don't eat this stuff. I do keto most of the time. But I mean, it's one of those things where it's just putting the right fuel in your asset. I think people care more about what octane fuel they put in their car than what they're actually eating for a day-to-day basis. And that is just insane. I'm like, okay, this is just— think about it. You're putting things in your body that you wouldn't do even to your car. And it makes absolutely no sense. It's not going to run as well. It's not going to perform. So, you know, you gotta stop thinking like, think of your body like it's just you. Think of it more of, of an asset and taking care of it well and make sure, making sure it performs as well as it can. And then everything else is going to come along with that, right? I mean, as an entrepreneur, if you don't have high energy and you're lethargic and you're eating McDonald's, that's not going to work for very long. You know what I mean? When people are trying to call you up at 7:00 PM at night and 6 o'clock in the morning, It's going to be tough if you're not taking care of yourself.

Yeah. No, right on. I definitely appreciate that. Yeah. I mean, at 40, actually, you know, it's funny you say at 42, it's important. I'm 57 now and I'm thinking, man, it just gets so much more important as you age. Well, I mean, if you want to age well, I guess, right?

Yeah. And it's also one of those things where it's not something you're like, oh, well, I'm gonna start eating right when I'm 50. Like, no, like, that's not how it works. Like, you, you need to— this is a lifelong thing. Like, if you want to be healthy when you're 50, you need to start when you're 30. Like, yeah, this goes on for a very long time there.

Yeah. But, but having heard that, if you are listening and you're 50, it's still not too late. It's still— it certainly is a lost cause.

Yeah, that's one of those things too, right? So that, that's another good concept too, and I know a lot of people fall into this. And it's kind of like, okay, like for a good example, some people won't go to the gym at all if they can only get part of their workout in or if they can only go there one day a week. I'm like, that doesn't make any sense. Like any amount you can do adds up over time, right? And the same thing with healthy eating. If you haven't started until 50, that doesn't mean don't do it.

You know what I mean?

Anything you push in that direction is going to have a positive net effect for sure. Yeah.

So if there's one thing you wish that young entrepreneurs and founders knew about debt, what would it be?

The number one thing I would tell most people with debt is really kind of like what we talked about in the beginning is take on the appropriate levels of debt. Okay? Like if you go to a bank, and for some reason, you're getting these answers like, we can't lend this to you, there might be a reason why. Maybe you're taking on too much. You know what I mean? And just be careful. The number one reason businesses fail is lack of liquidity. And when you leverage, that lack of liquidity comes that much faster. And then also, think about your debt lenders. Partners, but also partners that can really turn the screws on your business. And if they become an outsized part of your monthly cash flow, that's way too much debt, right? You want them to be something that is manageable and something that is not the first thing you think of, mainly because your business might maintain over time, but you, if you have debt burden, are so much more so much less likely to take on risk and expand and get ahead if you have this debt burden. And the only way you can expand this business, the only way you can get ahead is by taking on risks, by trying new things. And you're going to fail at some of those things, right? But if you can't take on any new ideas or take on any new risks because if you have any disruption, you're going to miss payments on this loan, that's way too much debt.

Yeah, that's really good advice. And it even— you can draw a line from that to just your overall mental health and well-being, right? If you're in that situation where you're overleveraged, you're going to start to suffer mentally, and then your business is going to suffer more, which compounds the issue of your cash flow. So yeah, I think that's really good advice on many levels. If people are looking to find you or work with you, what's the best way for them to find you?

I am exceptionally easy to find if you just type my name into Google, you know, find me on LinkedIn. I think I've got like 30,000 connections or something, or, you know, just find us through the website and call up Clapton Capital. I'm always around.

All right. Well, Jake, thanks so much for being here. I appreciate it. And I really appreciate you sharing your story and your wisdom and philosophy with our audience. Thanks so much.

Likewise. Thanks, John.

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