Built to Sell Radio

Built to Sell Radio is a weekly podcast for business owners. Each week, we ask a recently cashed out entrepreneur why they decided to sell, what they did right and what mistakes they made through the process of exiting their business. Built to Sell Radio is the ultimate insider's guide to approaching the most important financial transaction of your life.
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May 24, 2017

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

May 17, 2017

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.

May 10, 2017

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.

May 3, 2017

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.

Apr 26, 2017

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.

Apr 19, 2017

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.

Apr 12, 2017

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.

Apr 5, 2017

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.
Mar 29, 2017

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.
Mar 8, 2017

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 your potential acquirer
  • What terms and conditions to include in an earn-out contract 
  • How to vet a potential buyer when an earn-out is involved
Mar 1, 2017

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
Feb 22, 2017

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 contract with an acquirer
Feb 15, 2017

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 when venture capitalists insist on preferred shares
Feb 8, 2017

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 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
Feb 1, 2017

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
Jan 25, 2017

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.

Jan 11, 2017

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.

Jan 4, 2017

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.

Dec 28, 2016

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 with a liquidity horizon.
Dec 21, 2016

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 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.
Dec 14, 2016

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 months later, Detection was acquired and Sit lived to regret the employment contract he had signed.

Dec 7, 2016

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 money in good and bad markets.
  • the tricks venture capitalists use to try and dilute your equity.
  • the tactic some venture capitalists use to wipe out the equity of investors of a family and friends round.
  • what re-trading is and how to stop it.
Nov 30, 2016

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 this interview, you’ll get a summary of his new book, Beyond The E-Myth including:

  • Why every company should be built as a product to sell.
  • The four stages of building a sellable company.
  • How to engage “the beginner’s mind”.
  • The four rolls of every founder.
  • The hierarchy of growth.

For the better part of 40 years, Michael Gerber has been encouraging business owners to work “on, not in” your business. That’s exactly what we do with owners that leverage The Value Builder System™. Each month, you’ll get focused time with one of our Certified Value Builders to help you build your company as if it were a product to sell. Get started by completing your Value Builder questionnaire.

Nov 23, 2016

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 into bed with a private equity group.
  • how stock clawbacks can dilute your position to zero in the company you started.
  • how a stock re-capitalization works.
  • one key decision every entrepreneur must make in growing their company.
  • why cross-selling as an investment thesis is flawed.
Nov 16, 2016

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, Bradbury decided to sell it, reasoning he needed to safeguard his family’s finances should anything bad happen again. After a long search, Bradbury found a buyer but the offer he received revealed his weakened negotiating position.You’ll hear Bradbury's cautionary tale along with:

  • How to build leverage into your negotiations.
  • Why you need a BATANA (Best Alternative To A Negotiated Agreement) when exiting your business.
  • How you can you-proof your business.
  • How you can use accretive value to your advantage.
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