Have you ever noticed the ads that run before you watch an official online video clip from shows like Saturday Night Live or Jimmy Kimmel ? You can thank Nicholas Seet for that. Seet developed the video player that hosts both the content and the ads for some of the world’s biggest media companies. His business, Auditude, was recently acquired by Adobe for more than $100 million according to UCLA's Anderson School of Management. Although a spectacular exit, Seet had to give up a large chunk of th...
Feb 15, 2017•48 min
Ian Ippolito started Rent a Coder as an online marketplace for hiring technical talent. He quickly expanded to go beyond technical professionals and re-branded as vWorker. Ippolito built vWorker up to $11.5MM in annual revenue before he received an acquisition offer from Australia’s Freelancer.com Freelancer.com had been courting Ippolito for months but their original offer was too low in Ippolito’s view. That’s when Ippolito decided the only way for him to get any real negotiating leverage was ...
Feb 08, 2017•35 min
Peter Shankman started Help A Reporter Out (HARO) to connect experts with journalists who needed people to quote for stories. HARO sent a simple email three times a day to subscribers and because every email had the potential to be a reporter from a media outlet like The New York Times, the email open rates were close to 80%. Most days Shankman worked from his sofa with two employees helping him remotely. Within three years, Shankman was generating $1.5MM from selling simple text ads on his emai...
Feb 01, 2017•23 min
Bobby Albert took over the family moving business when his father died unexpectedly. Determined to succeed, he transformed his father’s five-person business into a fast growth company, eventually employing 150 people before The Albert Group of Companies was approached by a strategic acquirer. Rather than simply accept their first acquisition offer, Albert patiently negotiated the offer up by more than 100% before he agreed to be taken over. In this episode, you’ll learn: - The difference between...
Jan 25, 2017•55 min
Julie Pickens and her partner Mindee Hardin created Boogie Wipes, a moistened tissue Moms use so their sick kids can avoid a raw nose in cold season. They patented their formula and won orders from Rite Aid, Walmart and Target leading to annual revenue of $15 million. But all was not well in Boogie land—in fact, the partners’ relationship became strained when Hardin announced she wanted out, forcing Pickens to find a buyer for their company. The result would leave Pickens disappointed with her e...
Jan 11, 2017•52 min
Bert Martinez is a best-selling author and a national radio host who has sold a dozen businesses in his career. In this episode, you’ll hear the story of Accelerator, a supplements company he sold for just under $1.6MM in 2014. Accelerator’s main supplement was ephedra, a weight loss pill that was selling well despite a growing group of customers who were getting sick from misusing it. Martinez started to worry that ephedra could be banned so he put his business on the market, only to realize it...
Jan 04, 2017•36 min
Rajiv Kumar and Brad Weinberg started ShapeUp, a software company designed around getting people to improve their health. Instead of going direct to consumers, they decided to license the platform to large Fortune 500 companies looking to reduce their insurance expenses by getting employees to improve their health. The partners sold 20% of the company for $300,000 in start-up capital and went on to raise five more rounds of capital at increasing valuations. They got the business up to $20 millio...
Dec 28, 2016•50 min
In 1992 Stephanie Breedlove started a payroll company to make it easier for parents to pay their nannies. It began small and she self-funded their growth, which averaged 20% per year. By 2012 they had hit $9 million in annual sales when she got a call from Sheila Marcelo, the CEO of venture-backed Care.com. Marcelo wanted to buy Breedlove’s company and offered her almost $40 million—more than four times Breedlove’s revenue, an astronomical multiple that only serves to underscore Breedlove’s auda...
Dec 21, 2016•41 min
When you get an acquisition offer for your business, it is natural to focus on the offer price, but your employment contract can be a key element of your remuneration. I know, you don’t want to be an employee but, when you sell, you’ll likely have to sign on for a transition period or earn-out where you will officially be an employee again. The terms of this employment contract are a key element of any deal. Just ask Eric Sit. Sit’s company was acquired by Detection Technologies in 2013. Six mon...
Dec 14, 2016•39 min
Barry Hinckley founded Bullhorn with his two partners Art Papas and Roger Colvin. The software company built an application recruiters used to manage candidates and clients. Bullhorn raised three rounds of financing and went on to sell for $135MM in 2012. Hinckley and his team raised money from family, friends, and venture capitalists and have the scars to prove it. In this interview you’ll learn: what to do when a venture capitalist wants to fire the founders. the difference between raising mon...
Dec 07, 2016•43 min
The first book I ever read about entrepreneurship was The E-Myth by Michael Gerber. I loved it. Gerber’s knack for simplifying the complex art of starting and growing a company resonated with me immediately. Although I’ve never met Michael, I consider him to be one of my very first teachers. I have not read his more recent books so when his publicist contacted me last week to see if I would interview Michael on Built to Sell Radio , I was keen to hear what he had been up to since The E-Myth . In...
Nov 30, 2016•31 min
Frank Cottle led an investor group to buy Hi-Mark Software for 10 times EBITDA. Cottle then sold a chunk for 15 times and ultimately sold his last tranche of equity for more than 16 times EBITDA to Lufthansa. In this interview, you’ll get deep inside the mind of a private equity buyer and learn: three reasons acquisition deals fall apart. the difference between your reputation and your brand and which one acquires value most. the definition of “suicide by investor” and the dangers of getting int...
Nov 23, 2016•47 min
Most of our Built to Sell Radio episodes have been success stories but this week’s show is a cautionary tale of what happens when you don’t plan ahead. It features Dan Bradbury, a young entrepreneur who was growing a successful business right up until the day he had a cycling accident and ended up in a coma. Bradbury made a full recovery after seven months, but his business didn’t make out as well. It suffered in his absence, and instead of committing to build it back up upon his recovery, Bradb...
Nov 16, 2016•49 min
Mark Stephenson and his partners grew their conference business, Media Edge Communications, to north of $10 million in annual revenue when they were approached by an acquirer. They agreed to a deal that was just shy of eight times EBITDA—85% of the deal was in cash with 15% in an earn-out. If Stephenson had the deal to do over again, he would change his earn-out structure to avoid leaving money on the table. You’ll learn about Stephenson’s earn-out mistake along with: - The emotional impact of s...
Nov 09, 2016•43 min
Steve Huey bought The Learning House, a company that creates online courses on behalf of colleges, for $2.7MM in 2007 because he saw the opportunity to professionalize the sales and account management of the business. Five years later, Huey sold the business to Weld North, a private equity company for $27.5 MM earning his shareholders an 8 to 1 return. In this episode, you’ll hear Huey’s advice on: how to raise a $4MM angel round in 7 days an inexpensive way to figure out what your business is w...
Nov 02, 2016•48 min
Joe Saul Sehy is the host of Stacking Benjamins , a popular personal finance podcast on which he has interviewed everyone from Jean Chatzky to David Bach. Sehy’s journey to becoming a podcasting sensation was a little unusual: he started as a financial advisor, building a firm with $65 million in assets under management. Then, on his 40th birthday, Sehy received a letter from a friend which was the trigger that made him want to sell his business. His friend’s letter became a catalyst for him to ...
Oct 26, 2016•48 min
Doug Chapiewsky built CenterPoint Solutions Inc. into an Inc. 500 company with $5 million in revenue and more than $3 million in EBITDA before he sold it to Israeli-based Nice Systems. In this episode of Built to Sell Radio , Chapiewsky describes how to: scrutinize the various currencies used by acquirers (cash vs. stock vs. options). dress up your company to sell it. use an office manager to increase the perception—and ultimately the value—of your company. stimulate an unsolicited offer for you...
Oct 19, 2016•37 min
Manny Fernandez started HomeBuyingCenter.com in 2007, just as the real estate market started to wobble in the United States. As it turned out, his timing was perfect as his site helped underwater homeowners unload their real estate. In fact, Fernandez was generating so many opportunities for one real estate brokerage, that he received an unsolicited offer from them to purchase his business. He took their offer and parlayed it into a competing offer that helped provide the competitive tension to ...
Oct 12, 2016•34 min
Of course you want an all-cash offer at a beefy multiple with no strings attached, but what do you really need from the sale of your company? That’s a question Dr. Frank Gibson thought a lot about. He had a successful healthcare business but had stumbled on a new opportunity in a related field. He wanted to sell his company to fund the new idea and, at the same time, needed to retain the rights to some intellectual capital in his old business.
Oct 05, 2016•42 min
James Garvey and his partner grew Objective Loyalty from a standing start in 2005 to $2.5 million in EBITDA before they decided to sell their email marketing platform. Garvey’s investment banker spent six months shopping the deal without a single offer. Then Garvey decided to switch tactics and approach the strategic partners who already knew the company well. Garvey got an offer and was able to double it quickly through some shrewd negotiation. Find out how Garvey 2X'd his original offer by lis...
Sep 28, 2016•39 min
An earn out is a way to bridge the gap between what you want for your business and what a buyer is willing to pay. In an earn out, a portion of the sale price of your business is set aside for payment in the future if you reach certain goals the acquirer sets for your business. You’ll need to stay on for a few years as an employee of the acquiring company to lead your team to hit the earn out goals. Most owners would prefer all of their cash the day they sell their business and most buyers would...
Sep 21, 2016•48 min
Peach New Media was launched in 2001 by Dave Will, who carried the title “Chief Peach” until he sold the business in 2015. Will had built his learning-management software company up to 40 employees when he received an offer from the private equity group Accel-KKR that he simply could not refuse. In this interview, Will shares his wisdom on: - How to create a company acquirers will want to buy. - How to figure out when to sell. - How to look at your business as an investor would. - Cup-holder ide...
Sep 14, 2016•42 min
Jim Beach sold American Computer Experience for $200 million, which sounds like a fantastic exit, but when I asked Beach if he had any regrets I was surprised by how long a list of lessons he had to share including: How creating new divisions can help grow revenue but reduce the overall value of your company. - The dangers of raising venture capital. - Why growing faster than your cash flow may end up costing you more equity in your business than you want to give up. - The perils of partnering w...
Sep 07, 2016•47 min
In 1999, Andrew Weinreich sold Six Degrees, a social networking site based on the same idea that sparked the likes of LinkedIn and Facebook, for $125 million. In the following years, he went on to sell three other companies including one to IBM and another to Match.com. Most founders are lucky to have one successful exit, but Weinreich has already had four. In this interview, you’ll learn: The common denominator among all four of Weinreich’s exits. Where to find the company with the highest prob...
Aug 24, 2016•1 hr 7 min
Intellectually, you know you need recurring revenue, but how do you build an annuity stream in an industry where subscription billing is not the standard? Take a look at the example of Laura Steward, the founder of Guardian Angel Computer Services. She was in the business of fixing her clients’ computer problems when a valuation specialist told her that Guardian Angel was worth less than 50% of one year’s revenue. Determined to get more for her business, she underwent a makeover focusing on her ...
Aug 17, 2016•42 min
Rod Drury is the founder and CEO of Xero, a cloud-based accounting platform that competes head on with Intuit’s QuickBooks. Started in 2006, Xero now boasts 700,000 subscribers and a market capitalization of almost $3 billion. Xero was picked by Forbes as the World’s Most Innovative Growth Company in 2014 and 2015. Drury got the capital to start Xero from selling another software company, AfterMail, for $15 million plus another $30 million in a potential earn-out—not bad for a company with a lit...
Aug 10, 2016•46 min
Have you ever stayed in a fancy hotel and wondered how much they pay Aveda for those little bottles of shampoo? Turns out, there is a company called Pacific Direct that acts as a middleman between the hotel chain and the company supplying the shampoo. U.K.-based Pacific Direct was earning £3.3 million when founder Lara Morgan decided to sell. She got multiple offers for her company and ultimately sold it to a private equity group for £20 million. During our interview, Morgan shared her wisdom on...
Aug 03, 2016•56 min
A direct competitor can often be the most likely buyer for your business. A competitor already knows your industry and may see your company as a way to consolidate market share and gain more pricing control. They may also be able to buy your business and eliminate redundancies in your back office, meaning your business is worth more in their hands than in those of many other potential buyers. The challenge with negotiating the sale of your business to a competitor is, if the deal falls through, ...
Jul 27, 2016•51 min
Part of building to sell is knowing who you are going to sell to. If you don’t start thinking about your potential buyers list early, you may end up growing an entire appendage of your business that an acquirer will neither want nor value. Take Northern Lights as an example: Michael Glauser started Northern Lights to offer low-fat frozen yogurt through a growing wholesale distribution network of stores selling his desserts. At the same time, he built up a network of 60 company-owned stores under...
Jul 20, 2016•39 min
If you run a service, my guess is you’ve dreamt of owning a product business instead. Service businesses are such a mess – demanding clients, scope creep, and more often than not, slow growth. Which leads many service company founders yearning for a product. They tinker with a product on the side, often sucking cash and other resources out of the service business to fund the development of a product, which can compromise the health of the service business. But there is an alternative: why not se...
Jul 13, 2016•41 min
