Shawn Flynn started his career in Beijing, China, by founding, scaling, and successfully exiting a company. He is now the Principal of a premier middle market investment bank specializing in mergers and acquisitions, capital markets, financial restructuring, and valuation. In this episode of Unlearn, he and Barry O’Reilly talk about acquisitions and exiting.
Intro to investment banking
Unlike most people in the profession, Shawn did not have an undergrad economics degree, MBA, or a jam-packed resume. He was overseas for roughly 8 years after graduating from college with a mechanical engineering degree, seizing the opportunity to travel to Costa Rica, China, Europe, and back to China, where he started a few companies. One of them did well, and the others were learning experiences. After returning to the States in 2013, he got a job as an account executive for a company that unfortunately folded, but through that experience, he was able to meet and network with many angel investors and one group who eventually took him under their wing. He became the investment director for the second oldest angel group in Silicon Valley.
Debunking misconceptions
The real work in investment banking is client-facing - keeping conversations and engagement going, making people feel comfortable, and asking the necessary questions so there’s no skeletons in the closet about the company. “The people skill is so huge in this line of work and I had no idea going into it,” Shawn confesses. “I thought if you were good at Excel, you’re a good investment banker, but in reality anyone can do that. The real skill is finding the deals, being able to build that rapport and keep everyone engaged through the entire process.”
Open door policies
When planning an exit, you actually want employees to not have heard from you or contact you with urgent news in months. That’s a sign that things can and are operating smoothly without you - exactly what you need when exiting. Everyone knows their KPIs, the systems they’re running and how to get there, and what they’re doing every quarter. You want the people at the top to be able to go for vacation any time they want and not have the company destroy itself.
Time is of the essence
Time kills all deals, Barry says. At Nobody Studios, they value getting things done in a timely fashion. The number one deal killer is time. Stall too long, and you are very likely to lose the deal altogether. Anything can happen, Shawn comments, so when you’re in the marketing phase, the prime time for closing a deal is while all parties, (the buyer and the seller) are still excited.
An emotional process
Having an outside advisor during the selling process is invaluable because they prepare you for everything - and preparation is something you will need, as exiting tends to be quite emotional. Building a company can consume much of your life, and letting go can get complicated, even when selling has been the plan all along. When potential acquirers come asking questions and trying to understand some of the decisions you’ve made, it’s easy to feel like they’re attacking you. Then, when it’s time to go out to market and you get no response after a few days, it’s disheartening.
Looking forward
Shawn is looking forward to resuming in-person events, like the half-day summit he held recently. He’s also excited about collaborating with foreign companies interested in setting up operations in the US. “People have had all these dreams built up for the last 2 years, and now they’re sharing them with the world and saying ‘I gotta catch up on 2 years of stuff, let’s move fast,’” he adds.
Please visit BarryO'Reilly.com for full show notes.
Resources
Shawn Flynn at Twitter | LinkedIn
The Silicon Valley Podcast
Exits and Acquisitions with Shawn Flynn | Unlearn podcast - Listen or read transcript on Metacast
