Built to Sell Radio

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 get a deal done – proving once again, it often takes two offers to maximize the value of your business.

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.

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.

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 listening now.

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 listening now.

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 prefer to pay the entire amount contingent on future performance. Deals get done in the middle where some portion of your money is paid up front with another slice available if you meet your goals as a division of the acquiring company.

Traditional earn outs are typically tied to the profitability of your company as a division of your new owner and they are fraught with problems. Buyers may thwart you ability to hit your number in any number of ways. In this episode of Built to Sell Radio, you'll hear from Mac Lackey, a veteran entrepreneur who took an alternative approach to structuring his earn out which put up to 80% of the sale of his company, Kyck.com, at risk.

You'll learn the surprising approach Lackey took to structuring his earn out to maximize his shot at hitting his number.

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 prefer to pay the entire amount contingent on future performance. Deals get done in the middle where some portion of your money is paid up front with another slice available if you meet your goals as a division of the acquiring company.

Traditional earn outs are typically tied to the profitability of your company as a division of your new owner and they are fraught with problems. Buyers may thwart you ability to hit your number in any number of ways.  In this episode of Built to Sell Radio, you’ll hear from Mac Lackey, a veteran entrepreneur who took an alternative approach to structuring his earn out which put up to 80% of the sale of his company, Kyck.com, at risk.

You’ll learn the surprising approach Lackey took to structuring his earn out to maximize his shot at hitting his number.

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 ideas and how they impact your company's value.

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 ideas and how they impact your company’s value.

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 with a celebrity entrepreneur.

- Why you should never take an angel investment from a friend or family member.

- How to avoid a $250,000 legal bill when selling your company.