Built To Sell Radio

SnapSaves was created by Toronto-based company Buytopia, which has a deal-of-the-day business model similar to that of Groupon.

In the early 2000s, Carl Gould gained notoriety in New Jersey for building upscale modular and log homes under the banner Outdoor Imaging. Gould invested heavily in growing his reputation in the New Jersey market. When Gould went to sell his business, the buyer wanted his hard assets and for Gould to sign over the development contracts he had commitments on, but the buyer did not want to take Gould’s company name.

Adam Glickman started hawking “Jumbo Brand Condoms” from his Tuft’s dorm room in 1989 under the moniker “a safe jumbo is a happy jumbo.” His brand grew across campus and, upon graduation, Glickman started America’s first retail condom shop in New York City. Based on the success of the Manhattan store, Glickman expanded to Los Angeles and in 1996 became an e-commerce pioneer.

Melbourne-based David Trewern grew DT, a digital advertising agency, to $10 million in annual revenue before he sold it to STW Group in 2007 for almost 10 times profit after tax. Trewern was able to get maximum value for his business and preferred terms because he started to look at the world through the eyes of his would-be acquirer.

Lois Melbourne and her husband started Acquire Solutions, a software business that helped large companies manage their employees.  After 18 years, the self-funded business had grown to 85 people and the Melbournes received an offer from a private equity firm rolling up software companies in the human resources field.

Acquirers are a secretive bunch.  They typically operate behind confidentiality agreements with their motives and tactics disguised from the public. That’s one reason I enjoyed my interview with Rocky Romanella so much.

Anthony Amos and his brother started HydroDog, an Australian company offering a mobile dog washing and grooming service. For $10, the Amos brothers would show up at your door with a giant dog bath on the back of their trailer and wash your dog.

How many people will you have to approach about buying your business before you end up getting an offer? In this week’s episode, you’ll hear from John Arnott who gives you a breakdown of the statistics on how many people he approached, the conversion rate of those approached to those who signed a Non-Disclosure Agreement (NDA), what proportion of people under NDA requested a face-to-face meeting and, of the people he met with, how many offers he received. It’s the first time that we at Built to Sell Radio have received such specific conversion rate statistics on a single deal. Arnott’s story is treasure trove of hard-fought wisdom, including: How to figure out “your number.” How to time your exit. A detailed breakdown of what’s included in an Offering Memorandum (OM). How to prepare for a face-to-face meeting with a potential acquirer.

Dan Lok packaged a set of table tennis video tutorials into a membership website and charged a subscription fee to join. Over eight years, Lok managed to build a five-figure recurring revenue stream from subscribers to Table Tennis Master. Table Tennis Master was one of 20 businesses Lok was developing simultaneously when tragedy struck his family. That’s when he decided to simplify his life and sell off some of his business interests. In Lok’s case, speed and ease of transaction were more important than maximizing his financial take, so in this episode you’ll hear the story behind the sale of Table Tennis Master and learn some unconventional tactics, such as: How to sell your business in a few weeks. A sure-fire way to tell if you should keep or sell your business. How to identify and engage friendly acquirers who can make a quick offer. How to structure your deal when speed and efficiency are more important than value.

The Mortgage Reports publishes information about mortgages for home owners. Site founder Dan Green, capitalized on the internet traffic they generated by selling leads to mortgage lenders. Within three years, Green crested a million dollars a year in annual revenue. That’s when he began to worry about new regulations and compliance as his business went from being a hobby to a major player in the mortgage leads industry. Green decided to sell and quickly got three offers from the companies he was selling leads to. The first offer was mostly cash. The second was for half cash and the other half “at risk” in an earn-out tied to meeting lead volume goals in the future. The third offer included a small payment up front with a rich potential earn-out if Green was able to send the acquirer enough quality leads. You may be surprised to learn which of the three offers Green picked. In this episode, you’ll learn: The difference between being a core product and an add-on feature The importance of breaking bread with yo

Laura Gisborne has started nine companies and sold six of them, including The Art of Wine, the subject of this week’s episode. The Art of Wine is a tasting room with a subscription-based wine club division. With a little more than $1MM in annual revenue, The Art of Wine was still a relatively small business, but when the lease came up for renewal Gisborne reasoned it was the perfect time to look for a new owner. Gisborne channeled her experience from six exits into the sale of The Art of Wine, and in this episode you’ll learn how to: Attract a steady flow of inbound offers for your business Pick your number (hint: it may be lower than you think) Ensure a competitor does not get their hands on your private information while marketing your business Use your location to attract a buyer Use the buyer’s ego to your advantage Build systems to you-proof your company

Most sellers want to be paid all of their money up front, and most buyers want to avoid paying anything up front. Deals usually get done somewhere in the middle, where the seller agrees to accept some cash and to be paid some of their proceeds over time.  Eric Weiner, for example, started All Occasion Transportation in college and by the time he turned 35, his company was grossing more than $3MM a year. That’s when Weiner decided he wanted out. Weiner found a buyer and agreed to accept half of his money in a five-year consulting contract, which sounded great in theory but ended up becoming hard to enforce. In this cautionary episode, you’ll learn: How to structure a vendor take back How to market your business for sale without competitors finding out How to create sticks and carrots to ensure your deal is honored The definition of recourse and why you need some in any non-cash offer How to pick a walk-away number and use it to accelerate your negotiation The biggest blooper in structuring a consulting contra

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 the company—and the CEO title—to scale up, so in this episode of Built to Sell Radio we ask the age-old question: 'Is it better to own a big chunk of a small company or a small slice of a big company?' You may be surprised by Seet’s response.  You’ll also learn: How to handle the customer who wants exclusivity The biggest mistake most engineers make when building a company The benefits of a “Super Angel” Who the “Goose Society” is and why you might want them as investors How to avoid the dilution of common shareholders w

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 to seek out a second bidder. In this episode, you’ll learn: the dangers of a proprietary deal what to do when you get a low-ball offer why a BATNA is critical to every deal how to time your exit strategic stalling and how to do it why 90% of earn-outs fail

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 email blasts. That’s when Shankman’s largest advertiser approached him to buy HARO. In the episode you’ll learn: the remarkable relationship between ADHD and entrepreneurship the surprising upside of selling instead of scaling your business the truth about who is most likely to buy your business the best way to find a strategic buyer for your company

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 an abundance and a scarcity mindset. - What distinguishes your company’s core values from the founder’s core values. - How to 5X your revenue. - The secret to getting discretionary effort from your employees. - The difference between a values-driven company that gets results and a results-driven company that has values. - Why aspirational values kill a company’s culture. - How to more than double your next acquisition offer.

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 exit while partner Hardin had to file for bankruptcy. What follows is a cautionary tale of what happens when partners decide to go their separate ways.

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 was worth a lot less than he thought.

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 million in recurring revenue when they got a call from Richard Branson-backed Virgin Pulse.  Kumar was able to gin up Virgin’s initial offer by 50% based on some savvy negotiation skills. In the episode, you’ll learn: The definition of fixed cost leverage. Why you should start with pitching your worst investor first. What "escape velocity" means and how it impacts your company’s valuation. How optionality gives you negotiating leverage. When companies are bought vs. sold. The difference between an evergreen fund and one wi

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 audacity when she turned it down. Breedlove wanted more and ultimately settled on a price of $55 million for her $9 million business. In this episode, you’ll learn: how to strategically walk away from an offer. what to do when you reach a negotiation impasse. three criteria every owner should consider when selling. the pros and cons of accepting stock as compensation.