Case Study #54: Exit on Your Terms

Exit on Your TermsSaud Juman started PolicyMedical in his mother’s basement.  He took the mundane tasks that every hospital needed to accomplish, like the steps in disinfecting a scalpel after surgery or the proper way to mop a floor so that nobody slips and falls, and automated them using software.  From these humble beginnings Saud eventually grew the company to an exit worth over 7 times revenue.

Work the Phones

Saud had a partner early on in the business.  That partner worked on the technical side of things and Saud handled sales.  Back in the late 1990s, before the revolution the Internet would bring to every aspect of our lives, the main option available to him was smiling and dialing.  The Yellow Pages equivalent for hospitals listed every executive for each hospital.  Saud remembers 150+ call days.

The hospitals had regulatory compliance they needed to be aligned with, and once Saud was able to explain how PolicyMedical would make things easier for them, they often said yes. 

Change of Pace

About seven years after the founding, Saud’s partner wanted to move on to different opportunities.  The company was doing roughly $500k in annual revenue and they managed to negotiate an amicable buyout.  But Saud realized that with a new technical hire to replace his former co-founder, he was stuck at a lifestyle business level.  This wasn’t a bad thing, but it didn’t line up with what had inspired him to originally begin the business.  He wanted to make a significant impact in millions of patients’ lives every day, and he couldn’t do that unless he was building a high-growth, high-impact company.

The problem was, he didn’t know how to do that.  So he did the next best thing: find someone who did and asked for mentorship.

Leveling Up

Saud made a list of people in tech, healthcare specifically, who had built companies of at least $150M annual revenue.  There were only three people on the list, and he hoped that one might come to a rather casual regular networking event one weeknight in Silicon Valley (he had done research to find out that this person was often at these events).  Saud flew down there from Toronto for the event, hoping to meet him, or if not, someone who might help make an introduction to him.  His risk was rewarded when that gentleman came to the event.

While he was at first taken aback by Saud’s story, he tried to beg off, telling Saud that if he were local, he could give Saud some time.  Saud immediately responded that he would fly down any time that this person was available.  Even though this possible mentor had just sold a company and had planned to take a couple years off (and had told everyone so), Saud’s earnestness impressed him and a week later they were spending a couple days together, laying out the groundwork for the future of PolicyMedical.

In these many hours of conversation Saud found a partner, not a mentor, and after making him a formal offer of equity, they were off to the races, rebuilding the software from the ground up, and doing it in the cloud, many years before anyone knew what that was.  He also had to convince his current customer base to move to the new trend in software, which was no longer a one-time large payment followed by much smaller “maintenance” fees every year, but forever monthly payments.  

Once again Saud’s sales skills were put to use, as he had to explain that even though many of the customers would see a 3X increase in their pricing, they were still being grandfathered in at a lower rate than what was being offered in the marketplace, and if they chose to go elsewhere they were going to pay a lot more.  

Closing Time

After a successful relaunch of the software with a new partner, Saud found he had been at the helm for a total of 15 years and wasn’t having fun anymore.  We find that many people exit at this time, but Saud did something quite rare: he stayed, using sheer will power, for another three years, to get the company ready to sell or ready to hire his replacement.

In that time he:

  • Built a data room with all the reports and paperwork a buyer could dream of
  • Reviewed the status of all existing clients
  • Reaffirmed all existing contracts
  • Got audited financials

He was so prepared, in fact, that he didn’t pay his investment banker the regular retainer that is paid in order to prep the business for sale.  The business was sale-ready, and the proof was the 37 offers to buy that he received.  Many of them were far below what Saud had wanted, which was an eight or nine figure exit, equivalent to more than 7X revenue.  But instead of moping about the “low” offers, he picked the top two offers, which were close to 4X and played them off each other.

He wrote down three dealbreakers to help guide him as the process moved towards a possible final buyer:

  1. All cash (there would be no earnouts or holdbacks)
  2. Fast transition (he would be gone in under six months)
  3. Keep the engineering team (most had relocated from Brazil and were in the naturalization process, and he wanted a guarantee that would not be interrupted)

By sticking to his guns, Saud got the deal that he wanted.


There are so many great lessons from this case study, but we will focus on three:

  • Be in touch with what it is you want from a sale.  Saud knew that it was time to go, but he also knew he wouldn’t be happy with the sale of the company as it was, so he was willing to put in the work to get to the next level.  Have the self-awareness to know whether you can keep going or whether you have to sell now.
  • Ask for help.  Saud took seeking mentorship to a whole new level by being willing to fly from Toronto to Silicon Valley to find an industry-specific mentor.  While he ended up finding a partner instead of a mentor, the process still worked.  If you don’t know how to get to the next level, find someone who does and ask for help.
  • Have a desirable offering.  37 offers should tell you everything you need to know about how great Saud’s company was.  While those offers weren’t all at the price he wanted, the fact that so many companies were interested meant that Saud had done his homework, and if you do the same, you will have the luxury and price premium that comes with multiple buyers chasing a desirable business.

Do you think it might be time to step down from your business?  We can help you evaluate the best time and way to do that.  Give us a call!