Usain Bolt is dropping some knowledge on the importance of having ownership in a company.
On Aug. 3, Bolt sat down with the hosts of the “Earn Your Leisure” podcast and discussed why he’s decided to get equity within a business instead of endorsement checks. In the clip, he says, “Later on in our career, we’re like, ‘You know what, we need to stop taking cash and get some equity, because a lot of these companies are getting bigger and bigger and bigger.’”
According to Investopedia, equity “is the value of company’s sales (assets) minus any liabilities owed by the company not transferred with the sale.” Liability is typically a financial debt that someone owes another person. For example, if a person starts up a business and needs a bank loan, that loan is now a liability because the person will owe the bank money. But as the assets or sales increase and the loans start to get paid off the equity increases.
Bolt clarified that he wouldn’t get equity in every company he does business with, but only the “right companies.” “You got to do your research,” he said, “You know what, at the end of the day we can take the equity and in the long run it’s bigger.” The 34-year-old is estimated to have an net worth of $90 million, and he receives about $20 million per year just from endorsements. But Bolt has now realized that the power of having equity is that you own a piece of a company.
“I got three kids now, bro’, I got to think about the future,” the eight-time Olympic gold medalist said with a chuckle.
In 2016, Bolt became one of the biggest minority shareholders in Enertor, which is a company that sells insoles that are advertised as helping the customer stay injury-free and run faster. At that time, the company was valued at $10 million.
