Case Study #70: Read the Fine Print

Case Study #70: Read the Fine PrintJason Bagley sold his South-African-based cold email lead generation company, Firing Squad, to an American marketing agency but lived to regret the deal when he realized that the contract he signed didn’t give him what he expected.

Cold Emails

Most people don’t like writing cold emails. They know that it can work, but the stress and pain involved in writing them is enough to discourage them from pursuing it.

That’s where Jason and his team came in. Originally oriented as a web design firm, Firing Squad simply didn’t have enough recurring revenue and to dig them out of this hole Jason looked at his top recurring client and saw that it was an email newsletter business. He decided to pursue emails a bit more narrowly and almost in prophecy, wrote a number of cold emails to offer businesses help with a cold email service.

“How do we know this is going to work?” Many of the business owners unironically asked Jason when they had their appointment.

“You’re sitting here based on a cold email, right?”

Fair enough.

Secret Sauce

Jason was the top writer of these cold emails, but he knew that he had to pass on his knowledge to team members in order to scale. He did this through Looms or live video chats in which he would explain why something needed to be changed. An example he shared of a change he would frequently push was closing with a question.

Emails might end with “Let’s have a chat.”

“That’s not a question leading to action,” opines Jason. Go for a close, like “Can we chat?”

Little tweaks like these led to better success rates for his emails.

Apart from writing, Firing Squad’s secret sauce included how many emails to send and who should be targeted.

Challenges and Scaling

While Jason and his team were experiencing success, they still felt like they were on the same revenue treadmill that they were on when solely working on web design.

In the best cases, they created so much new business that the companies that hired them turned off the service because they couldn’t handle any more new leads.

In the worst cases, they only were able to get a few leads for the clients, making it not worth the client’s money or the team’s time.

Jason thought expanding into the US market might help him find a balance between these two types of clients and started having conversations with US-based businesses around referral partnerships. One of those conversations took a turn towards acquisition.

Jason knew that given how much he was still involved in writing the emails, he didn’t really have a business to sell as much as he could offer himself as a kind of acquisition. 

Looking for Upside

So Jason offered Firing Squad lock, stock, and barrel, in exchange for some base pay and some equity in the acquirer. After some negotiations, they agreed, but one of the deal points included significant price increases for the South-African-based clients. By significant, that meant tripling the prices.

Jason played the “we got acquired and the acquirer has forced us to do this” and after some grousing, a lot of the existing clients came along — which also offered an unexpected insight into how underpriced those services had been.

Jason was fine with working for the acquirer as long as he knew that at some point when he chose to leave he would be able to cash out what he had helped grow. Except that’s not the deal he signed.

Read the Fine Print

Jason had wanted actual equity, not shadow equity that evaporated when he left the company. The problem is that he got the latter and his lawyer hadn’t told him that he hadn’t received the former because he never clearly explained what he wanted to his lawyer.

Worse, the agreement was subject to US laws and Jason didn’t want to fly to the US to fight a court case. He chalked up the mistake to inexperience — avoidable inexperience — and went on to found another company.


Three key takeaways here:

  1. Clearly communicate with your lawyer. He/she is paid to review paperwork, but can only offer you good advice if you are crystal clear on the outcome you want.
  2. End prospecting emails with a clear question with a bias towards action, rather than a lukewarm suggestion.
  3. Recurring revenue is king

Need someone to help you read the fine print? We know good lawyers who can help. Give us a call.

Case Study #69: Know When It’s Time to Go

Case Study #68: Know When It's Time to GoSaaS businesses have developed a reputation in recent years for being all about the numbers as well as a relentless drive forward. Natalie Nagele and her team at Postmark had been in SaaS for many years and she went the other way, establishing a four day work week and confessed that before getting the business metrics in place for acquisition, she couldn’t tell you customer LTV. That didn’t stop her from getting acquired for a life-changing amount of money by Active Campaign earlier this year.

Built for Speed 

Ever had to reset a password? Or got a notice to retrieve an abandoned online shopping cart? Or clicked on a button that allowed you to send a link from a website or app to someone’s email? That’s transactional email, and most people don’t realize there are services operating that help deliver those emails.

Put another way, a transactional email contains information about an action the recipient has already taken. Broadcast email usually wants to nudge the recipient into taking an action. Particularly in the case of a sale, you want those transactional emails to go out as soon as possible, and Postmark built its reputation on speed.

When Is It a Bad Day vs When Is It Time to Sell?

All business owners have experienced a bad day or a bad week or a bad month. You could lose a key employee, have had to fire a bad one, or just not hit your numbers. You pick yourself up, dust yourself off, and handle what needs to be done. Sometimes you even feel refreshed and rejuvenated when you work through those challenges.

Natalie says that the dividing line between those regular ups and downs and a signal it’s time to sell is the thought, “I can’t do this anymore.” She was nearing that point before the pandemic hit, which temporarily put everything on hold as she focused on making sure the company — and all its team members — were fine. 

She also found herself often dreaming of hotels (a future business venture) which she knew meant that her focus and energy weren’t being put in the company, which wasn’t fair to her team.

But once things stabilized she and her husband (also her business partner in the company) realized that it really was time to let go, and that if she stayed and the team could see that they didn’t really want to be there anymore, that the company would be harmed. The 22 years they had spent building the company came to a happy conclusion when, unsolicited, Active Campaign reached out to see if there could be a deal, and after outlining her “must-haves” to the Active Campaign team, all else in the transaction went smoothly.

Natalie’s Must-Haves

Natalie had quite a few conditions as part of the sale, but the three that really mattered to her were:

  1. No working for the new company. She felt like she had the income she wanted and as we noted above already, after she took time off she wanted to look at a hotel venture. She was happy to have a brief transition period but after that she wanted to head off to retirement.
  2. Four day work week had to be preserved. This was an important step Postmark had taken years earlier and she felt that her employees had built their lives around it and didn’t want a sudden disruption.
  3. Bonus plan. The employees were used to a regular bonus that was tied to performance and she wanted to make sure, at least in the first 12 months, that this was honored. She ended up doubling down on this by sharing 10% of the proceeds of the sale with the team, some of whom also received life-changing amounts of money.

If you’re feeling like it’s finally time to let someone else take your business to the next level, we’d love to help you! Give us a call.

Case Study #68: E-Learning Cash Out

Case Study #67: E-Learning Cash OutWhen Mike Winnet quit his job to start a new business, he really didn’t know what field he would be going into. He started searching for jobs and noticed that 90% of them were asking for effective time management, clear communication, and great team work. But there weren’t certifications for these skills. He thought about what he would do if he was looking to acquire a particular skill: look on YouTube. When he started to research the e-learning space he wasn’t too impressed. So, E-Learning Heroes was born.

Taking Down Your Own Industry

If you ask Mike about what was wrong with e-learning when he started building his company, he won’t be shy. He said that the big players were creating courses that were:

  • Too long 
  • Too boring
  • Designed by nerds for nerds
  • Expensive

Worse, a lot of these companies pitched e-learning as a be-all and end-all. But Mike and his partners disagreed. Real learning is experience, in the field, shadowing, etc. What e-learning could do very well is prepare people for experience or recap experiences. It could not possibly substitute for experience.

So not only did E-Learning Heroes seek to counter all these problems, they also engaged in digital marketing that actively made fun of these issues, leading with videos like “Here’s what’s wrong with e-learning.” Understandably, these videos got a lot of attention from potential customers and a lot of bad will with competitors, though they would eventually come around in their own way.

So, E-Learning made their videos:

  • Shorter. Instead of 1-2 hours, a “course” could easily be 5-6 minutes
  • Interesting. Instead of trying to cover a lot, often a course focused on 1-2 things.
  • Fun to watch. Instead of having nerds in a lab come up with courses, they really looked for compelling instructors.
  • Inexpensive. Instead of selling “per head,” which Mike reasoned would punish companies for growing, he charged per course.

In addition, he didn’t make companies sign lengthy contracts that were difficult to get rid of. His cheaper pricing also allowed companies that were unhappy with their current solutions to give E-Learning Heroes a “test drive” while finishing up an existing contract and that test drive often resulted in a company switching over to E-Learning Heroes completely when their contract was complete.

Being Intentional

Before Mike sold, he was doing $140k in Monthly Recurring Revenue (MRR) and an annual profit of $400,000. He didn’t have a particular passion for e-learning (he had just seen a hole in the marketplace), he didn’t want to create an ongoing brand in the e-learning space (he was happy to let others do that), and most importantly, he felt that if he was able to build such a business with no experience and no real financial resources, it would only be a matter of time before one of the big players came in. So, he was always open to an acquisition.

Turns out it would come from one of the partners that E-Learning Heroes developed along the way. As part of his intentionality, Mike made sure his courses were compatible with the platforms of existing big players so that a potential future acquisition would be easier. When partners demanded exclusivity Mike would always give the same answer: “Buy us.” It turns out that some of those partners did take him seriously and he ended up selling. The company eventually sold for roughly $10M just under three years from when Mike started it.

And those competitors that Mike made fun of in the early days? They changed their pricing and course models to emulate the path E-Learning Heroes paved.


Mike’s got such an awesome story: he helps remind us that there are businesses and ideas just waiting to be created. Here are three takeaways:

  1. When Mike first packaged his courses, he was aiming at job-seekers. He thought these skills would help them land jobs. Priced at around $50, he managed to sell zero. But when he took the exact same courses and pitched them to HR professionals and other similar decision-makers at companies, he sold 340…at $10,000 each. He had the right product, but was pitching the wrong people at the wrong price. Pivot and win.
  2. Mike loves guerilla marketing and one of the ways he got the attention of some of the top companies in the UK (where E-Learning Heroes was based) was sending a personalized animated video to each of them. Because it was such an unusual approach, and because he had taken the time to do something fun, Mike got a 50% close rate on this initial outreach.
  3. Another aspect of guerilla marketing was Mike’s time efficiency (he was living his courses!). He would make a list of the questions he was answering in sales calls and then do videos answering those questions. He’d then post them on LinkedIn and other relevant platforms. He did what so many business owners dream of doing but fail to do: multiply themselves.

We don’t have any e-learning courses for you yet, but will a podcast do? Check them out here.

Case Study #67: Cashing In By Helping Small Landlords

Case Study #66: Cashing In By Helping Small LandlordsMost landlords who own fewer than ten properties use pen, paper, and spreadsheets to manage their tenants. But in a digital age, aided by solid software, there had to be a better way. Or, so thought Ryan Coon, who built Avail and enjoyed an 8-figure exit to His story offers lessons for all business owners, even if they aren’t building a software company.

Freemium Model

Most people are familiar with the freemium software model, in which some basic features are offered and the more advanced ones are offered to those who are “power users.” Popular examples include Spotify and Dropbox. 90% of Avail’s users are on their free tier, and they often remark, “I can’t believe this is free.”

But it took a while to figure out the right balance of paid and free features. The team played with different landing pages for their Google ads and found that often customers were happy to pay a little something for software that met their needs. They often valued that payment more than software that was entirely free.

This led to discovering that their average customer LTV was $500, which happened over a four-year period. But since they were spending up to $100 for customer acquisition, that meant that they needed to get outside funding to fuel growth to gobble up market share. That meant they couldn’t bootstrap and so Ryan had to spend portions of his time on the road meeting potential investors.

Keep It Simple

A key part of branding your business is not making the business name difficult for your customers. While Ryan and his business partner thought that “Rentalution,” a combination of “Rental” and “Solution.”

Good theory. But reality refuted that theory daily.

Ryan’s desk was near customer service and on a daily basis he overheard his reps gently correcting callers who clearly spelled the company name wrong. Hilariously, when he announced the name change to investors, one said that he liked what he thought was the current name of the company…and went on to spell it incorrectly.

Point taken all around, and Rentalution went away and Avail emerged.

Ryan noted too that Avail was about helping both landlords and tenants whereas the old name sounded like a detached software brand.

Getting Acquired

Given that they raised their last round of funding only six months before the company sold, even the most casual observer can see that selling the company was not on Ryan’s mind. What happened, however, was a series of conversations that led to “let’s explore” with a financial services firm who thought that a curated list of landlords would be a good fit for some of the other products they were offering.

But the kickoff call revealed that this probably wasn’t going to be a good cultural fit. At the time Avail had 45 total employees and the would-be acquirers had 50 on the call, of whom 40 were lawyers!

But the Avail team didn’t want to give up immediately and made it pretty far down the road with them before both parties decided not to move forward. 

But that meant that they had a data room full of reports and that helped accelerate the process with who would be the eventual acquirer,

Lessons Learned

Three key lessons from this story:

  1. Branding — while functional brand names make sense, brand names should ultimately be easy to spell and remember. Make sure that your brand passes the “simple” test by asking people to repeat and spell your brand. 
  2. Know Your Numbers — if you don’t know your customer LTV (lifetime value) and CAC (customer acquisition cost) there’s no way for you to find out whether your marketing is making you any money or even how much you should be spending on marketing. Make it a priority to know these metrics asap if you don’t already.
  3. Cultural Fit Matters in a Transaction — while it isn’t the first thing that might occur to sellers, buyers should be a cultural fit for your organization, or an implosion might happen shortly after the sale. While Ryan and his team didn’t stop the transaction when he felt uneasy about a cultural mismatch, he did note later that he was better informed for future business transactions. Don’t be afraid to walk away from buyers who are not good cultural fits.

Looking for a business in the real estate sector? We have those! Give us a call today.

Case Study #66: Aging a Wine Bar for Sale

Aging a Wine Bar for SaleRunning a wine bar may sound like an amazing lifestyle business, but like any business, one day may be the right one to move on to other things. That happened around the 50th birthday of one of the owners of The Art of Wine in Sedona, Arizona and the sale of the business offers some helpful lessons for buyers and sellers.

A Winding Path

So few business owners will tell you that they knew they wanted to own such-a-such business “when they grew up.” So often winding career paths make them experts in fields they might not know existed before landing on something they loved, were passionate about, or were really good at.

Laura Gisborne, one of the owners of The Art of Wine, took one of these paths. She married into a family business in her early twenties, exited after a period of time with her husband and got into real estate, which exposed them to retail businesses, which they also ventured into. During this time they moved to Sedona, Arizona, where they decided to open a wine bar to cater to the 3-4 million annual tourists that Sedona sees.

This would be the 9th business that Laura was involved with.

Runaway Success

The business took off and before too long they had added a wine subscription business to their events and tastings. They shipped a box once a quarter and made an effort to curate the box around the tasting preferences of subscribers instead of just using it as a place to dump overstock or clearance inventory.

The quarterly shipments depended on a year-long original commitment, after which time they often saw churn around 30%, but since they had a solid stream of new subscribers through their retail location, that core continued to build up.

Laura’s first job was at McDonald’s and she very much took to heart the lesson of creating written manuals that would enable people of high school age and intelligence to run key business functions. While high schoolers obviously couldn’t help with a wine bar, she kept the same principles in place and advocates for every single role in a business to be clearly articulated in written form. It’s short-term “pain” with lasting value.

She believes that everyone in the business has to be replaceable, not just for running a business, but for eventually selling it, something she always considers when creating a new venture.

“It’s Time”

Often the end can come suddenly. A business owner can wake up one day and realize he/she is mentally done and needs to sell. Less ideally, people can go through a personal crisis and be forced to sell. In this particular case it was more of the former: Laura’s husband hit his 50th birthday and realized he didn’t want to work at a wine bar anymore, even at the 15-20 hours a week he was working.

For her part, Laura had started to get more speaking requests around entrepreneurship and leadership and realized she would like an exit that would allow her to pursue that as well.

After experience selling more than half a dozen businesses, they opted to list the business on BizBuySell and had three different serious interactions in which she required not just an NDA but the unusual additional requirement of a noncompete, as the market in Sedona had significantly changed since they were the first mover in the space back in 2005.

Last Call

One of the potential buyers made it far enough into the process for a site visit, and Laura and her husband discovered that there was a lifestyle motivation as well: the couple looking to purchase lived in Washington State, with hundreds of rain days a year, and were looking to move to sunny Arizona anyway.

The Art of Wine had been sliced up into different business lines, primarily to give Laura a bit of negotiating. She knew the inventory would be worthless to them once they sold, so she held it as a bargaining chip should they need to push the deal over the line (they could “throw in” the inventory).

However, they discovered that the nonexistent regulation when the company was started in 2005 had developed at the same pace as the burgeoning Arizona wine industry. That meant the new owners would need a liquor license, something Laura and her husband never needed because they were grandfathered in.

That meant telling the buyers that they needed to spend $20k to acquire a license before the sale closed. For their part, Laura and her husband simply deducted that $20,000 from the selling price to make sure they were offering a like-for-like scenario: the business would have been on a completely different footing if they couldn’t serve wine at events.

Thankfully all went well and The Art of Wine was successfully handed off to new owners grateful to change their climate in addition to their income stream.


As always, there are lots of lessons here, but we will focus on three:

  1. What might new owners need? When they went to sell, they found out a buyer would need a liquor license and thankfully there was one available for sale, but if there hadn’t been, the deal would have been substantially altered or possibly dead in the water. Keep track of changes that you personally might not need to be compliant with but a buyer would. 
  2. Add a subscription line of revenue. While subscription businesses are second-nature now, they weren’t when The Art of Wine first got started. How might you add on subscription revenue to your existing business or one you are looking to acquire?
  3. Don’t wait. When you are “done” with a business, your team members will notice soon enough. Don’t wait to put an action plan in motion…a plan that you come up with long before you find you’re “done.”

Want to buy a wine bar or some other hospitality business? We’ve got options for you. Call us!

Case Study #65: Smoke ’em While You Can

Case Study #64: Smoke 'em While You CanIn 2015, Lorenzo de Plano and three other business partners started a business in the janitor’s closet of a Los Angeles parking garage. By late 2018 their business was doing $1-2M a month in topline revenue with a 40% margin. Not long after that, they exited for a cool $15M. Their business? Solace Vapor, which “specializes in the production, manufacturing, and distribution of unique nicotine supplements to replace conventional combustible cigarette usage.” Lorenzo helped build a vaping company.

Bootstrapped in a Wild West Marketplace

Vaping was already well underway by 2015, so Solace wasn’t trying to take over the marketplace. Instead, they took advantage of the research already done by Big Tobacco, which had filed numerous patents over the years around adjusting the pH levels of tobacco. By focusing on adjusting the pH levels of the liquid (often referred to as “juice” in the vaping community) as well as the size of the cartridge, Solace focused on serving a particular niche of the vaping market.

This community was 35 and older and weren’t interested in making the big, obnoxious smoke clouds delivered by the large devices. They wanted something smaller and discreet. Less of a “statement” and more something to enjoy. They took their ideas to the manufacturers to help create smaller devices and they had a couple takers.

Their first year they burned through all their cash (they each put in $5k) and went into credit card debt. But before too long they were off to the races.

When the government doesn’t regulate something, it’s often a “wild west” scenario, and to some extent, the vaping/e-cigarette market in the United States still is. This is due to the fact that many saw this as a gold rush of sorts and hence did not file paperwork with the FDA, thinking that when it came time for regulation they would just shut down and declare bankruptcy. In the meantime, they planned to “smoke ‘em while they could,” and make as much as possible.

Those who took the time to actually put together applications with the FDA ended up with the most severe financial penalties (that story, and thoughts on why those who try to follow the rules get punished, are for another time).

Regulatory Event

Just as insurance providers prepared for the regulatory event of what was then called Obamacare, those in the e-cigarette and vaping space were considering their next moves as it became clear that there would be some regulatory action from the federal government.

Lorenzo and his partners (now just three, as they had already bought one out some time before) knew that this regulatory event would compress the company’s valuation, but they thought their venture would make more sense inside the portfolio of a larger company that had the pockets and the stomach for a regulatory fight.

They took the business to market and engaged with four serious buyers, got LOIs from three, and went the full way on due diligence with two of them.

They ended up taking the slightly lower offer that gave them a chance to grow within the structure of another company rather than simply being paid off and dismissed. In this case, only three years into the business, they weren’t sick of something they wanted to get rid of, they simply wanted help, and wanted to take some money off the table in the process.

The payday? $15.25M, $8.25M which was upfront in cash, with the rest in restricted stock. They had to divest or sunset any assets of the business that dealt with cannabis or CBD as the acquiring company did not want to have that part of the business.


Lorenzo’s story from startup to sale is not a long one, but it’s full of helpful lessons:

  • Be flexible about partnership. As we noted, the company started with each founder taking 25% and giving equal amounts of capital to start the business, but they agreed that those percentages could change based on life events or changes in who was contributing what. Because they had worked out a way to value the business, when it came time to buy out a partner who had to move on with some other personal needs in his life, the transaction was seamless.
  • Be clear on the type of exit you want. Lorenzo turned down a higher offer because he didn’t want a “walk away” transaction. He was hungry to keep building the business, but he wanted to do it with help, so he took an offer that was lower at the outset, but with the chance to grow the business, could end up being a much more lucrative one in the long-term.
  • Think well on regulatory events. Lorenzo saw this problem coming in 2018, but the federal government, slow as it was, didn’t start making big moves until years later, with some of their biggest moves, removing JUUL e-cigarettes from the US market, didn’t come until 2022. Don’t wait for regulation to happen to your business. Be proactive and engage with someone who has a vision for what to do within the context of future regulation.

While we may not have a vaping business to sell you, we do have plenty of other smoking-hot deals here at Apex. Give us a call and we can share them with you!

Case Study #64: Turning Down Shark Tank Money

Turning Down Shark Tank MoneyIn 2013 Kate Field was living in Washington, D.C. working for a nonprofit when she discovered kombucha. Five years later she was pitching a home kit kombucha company on Shark Tank and two years after that she sold the company she bootstrapped, The Kombucha Shop, for just under $2M. Her sale of the business during the pandemic and her refusal to take on Shark Tank money are only two of the interesting twists in this fascinating story.

The Home Brew Niche

When Kate discovered kombucha it had not gotten popular or scaled yet so bottles were often $4 a pop. Friends tipped her off to brewing her own at home, which only involves the cost of tea, sugar, water, and the bacteria starter, called a scobie (think of the “starter” in a sourdough loaf), and often you can get a scobie free from a friend. Once she had gotten set up she offered to help out a friend who had asked about it, but the friend had already “bought a kit online.” 

Intrigued, Kate searched online and found some hippy-marketed kits, but nothing with the clean and trendy branding that her own millennial segment would be drawn to. There was an opening!

With $800 she bought glass jars, sugar, tea, PH strips, and a logo courtesy of a student designer and made 20 kits. She launched a Squarespace website just before Christmas and sold out those 20 kits just on word-of-mouth marketing. She took the profits and washed, rinsed, repeated. Before too long she had a business on her hands.

Shark Tank Calls

That regular word-of-mouth marketing is what Kate and her team stuck with and the company started to see hockey-stick growth, with $800k in sales in 2016, and $1.2M in 2017. Shark Tank came calling in 2018 and after three months of preparation and a lot of nervousness, she pitched.

Inc. ranked it as the second-best pitch of that season, and she consistently got praise from Mark Cuban during the pitch, but ended up doing a full-valuation deal with Sara Blakely and Barbara Corcoran. That deal valued the company at $3.5M, almost triple her trailing 12 months revenue at that time, but all the advice she had going in was to go high as the Sharks would inevitably try to take bites out of whatever number she came up with.

As it turns out, the deal didn’t end up being a fit (over 50% of the deals that “close” on the show never make it to the finish line) for various reasons, and all the parties were okay with not moving forward, but the entire diligence process only pushed Kate towards selling, as she was starting to feel that solopreneur burnout.

One Week From Closing

Getting on Shark Tank will get you a fair amount of interest when you take your business to market, and Kate met with 5-6 buyers before settling on a buyer who had grown some businesses in the past, wanted to give Kate a board seat, and give her an earnout over seven years that could lead to $2.7M in total earnings, but he only wanted to give her $1.5M upfront. She got along well with the buyer and despite some reservations about the earnout timeline, she decided to move forward.

One week before closing, on March 13th, 2020, she got a call from the buyer. He told her that there was going to be a global pandemic that would shut down supply chains for years and that he just couldn’t go through with the deal. Though she understood conditions were unprecedented, Kate was distraught and her husband suggested that they take a bike ride out to clear her mind.

But instead of clearing her mind, Kate got into a serious bike accident. Yet this only made her even more eager to sell: life is short, your health can be tenuous. 

Her broker got on the phone to people who were hoping the deal wouldn’t happen so they would have a chance and as she was going into surgery she gave a verbal okay for an LOI with one of those buyers. He had his own reservations about the international state of affairs (it was March 2020, keep in mind!) and so he shaved some of the value off Kate’s desired price of $2M to mitigate his risk: they ended up agreeing at $1.85M.


There are so many wonderful lessons from this first-time entrepreneur pulling off a 7-figure exit in the middle of a global pandemic, but we’ll focus on three:

  1. Build a better mousetrap. Kate didn’t hit on a world-changing idea. It was simple, and in fact, there were already players in the space. They just weren’t marketing to people like Kate, and she jumped on that opportunity.
  2. So what if you “don’t know.” Kate didn’t know how to build a business, she just went for it. She did a test run, sold out, then just iterated from there. So many businesses would never have been built if the owner had let “I don’t know how to do that” stop them.
  3. Turn down money sometimes. While it’s definitely easy to get star-struck by the idea of working with Sharks, there’s no point in taking money if you don’t need the money. Venture money always comes with strings, and sometimes those strings pull you right out of your own company.

We helped shepherd many transactions during the pandemic and have continued to do so as the panic from that time period has subsided. We’d love to work with you. Give us a call.

Case Study #63: A 10X Missed Opportunity

Case Study #62: A 10X Missed Opportunity

Courtesy of SAM_4973 on Flickr (

Rand Fishkin started an SEO blog in 2003.  His work became so popular that he was asked to speak and consult and before too long he realized there was a business to be had and by 2006 Moz was up and running.  He then went on a venture-backed journey that led to some great highs for his team, but many missed opportunities and mistakes as well.  Rand’s book Lost and Founder captures much of what went right and wrong during his Moz journey.

Mom & Son Founders

Rand dropped out of college to help his mother with the digital size of her marketing business.  Despite helping their customers, they managed to get into sizable debt which only got taken care of as Moz, a totally separate venture, took off.  

To deliver important SEO data to its customers, Moz had created internal software.  As Rand made his way around the speaking circuit people kept asking about it and he decided to make it available to the public for a recurring monthly fee: $39.99.  After six months that revenue stream alone was worth the same amount to the company as the consulting.  The Moz team realized the future was in software and pivoted accordingly.

That’s also when VCs came calling and one particular group funded Moz to build a new version of the software that would reintroduce some key data that used to be publicly available for free from Google, but which the search engine had removed for various reasons.

While the new software launched in October 2008, around when Bear Stearns blew up, before too long the new version of Moz was doing very well, leading to 100% growth year on year for several years.

More Money

Rand went on to pitch 150 firms, almost all of whom said no, but one invested $18M, which ended up being a mistake, Rand claims.

This is due in part to the mystique around venture capital, in part driven by the Shark Tank phenomenon.  Rand asserts that 99% of companies should not take VC money.  His own large VC cash infusion led Moz to take their eyes off the SEO ball and chase down other shiny objects.  From 2012-2014 as they spent this cash infusion their market share of the SEO software market was ceded to their competitors.  Instead of the 60-70% of the market they had in 2012, seven years later, they had around 14%.

A 5X Offer

Still, at the time, Moz was an attractive proposition for a company looking to make a strategic acquisition, and Hubspot was just such a company.  They offered Moz 5X their revenue, which at the time was a $25M cash and stock offer.

However, Rand was confident in Moz’s growth curve and countered with 4X what he projected next year’s revenue to be, $40M.  Hubspot refused and a few years later, they went public.  Rand estimates that the $25M could then easily have been worth $200M, to say nothing of what he and his team could have learned working with a brand like Hubspot for a few years after the first exit.

The Gift of Humility

Rand has recently left Moz and has gone on to found SparkToro, which is aiming to be a search engine for audience intelligence, helping businesses find the best places for them to be in front of their clients. Apart from collecting the lessons of the journey in the book we mentioned above, he says his biggest gift from this missed opportunity was the gift of humility, something he thinks all founders need a good dose of, whether they want it or not!


Rand didn’t lose his shirt and did eventually profitably exit the company he founded, but his story offers so many lessons.  Let’s focus on three:

  1. Don’t disdain an opportunity to exit.  Casper infamously turned down a $900M acquisition offer from Target because it wasn’t a $1B offer.  While Rand was optimistic about the future, he missed an opportunity to take money off the table right away and let some of it ride with a company that was on its way to going public. 
  2. Don’t glorify VC.  As Rand says, most businesses don’t need venture capital.  Look at ways you can bootstrap or internally fund your growth.
  3. Don’t lose focus on your core competency.  The large cash infusion Moz got distracted them from what made them a profitable business in the first place, SEO.  Beware of shiny object syndrome.

Worried you’ll miss a good offer when it comes your way?  That’s what a solid business advisor is there to help you navigate. Put one of us on your team.

Case Study #62: Exiting Near the Top

Case Study #61: Exiting Near the TopAnna Maste didn’t originally set out to build a business.  Her mom had already created some travel guides for the RV community that were selling well when a discussion between the two of them led to Anna pitching the idea of using that customer base to build a website.  Anna then spent a lot of her maternity leave (with free babysitting from mom) using her computer engineering background to create a basic website that allowed people who wanted to allow RVs to spend the night free on their property to advertise (and allowed those looking for free stays to connect with hosts).  Boondockers Welcome was born.  At first more of a monetized hobby than a business, the website took 7 years to grow to $100k in Annual Recurring Revenue (ARR) but thanks to an offer that made her reconsider everything, two years later Anna and her mom built the business up to $500k in ARR, leading to a healthy mid-seven figure exit.

What Changed?

Anna and her mom had been happy as 50/50 partners (despite the challenges that can exist in family businesses).  But at some point Anna’s mom wanted to enjoy her retirement a bit more, not just in less time spent on the business, but in a possible liquidity event that would allow her to splurge a bit more on some trips.

Anna used a broker to take the business to market informally and found an offer with a respectable 3.9X multiple on her ARR.  But at a conference where she shared the idea of an exit with some people, she found support and encouragement to build a bit more and get a bigger exit.  The big changes she made when she came back from the conference included:

  • Hiring a replacement for her mom, dealing with one of the issues that her mom had a challenge with
  • Taking a salary for herself, potentially improving valuation
  • Overcoming imposter syndrome, in which she told herself that she was an employee-type and “didn’t know how to manage people”
  • Raising prices, while grandfathering in all current customers, as long as they kept renewing
  • Hiring a customer service person from the membership (she got over 200 applicants for that role!)
  • Adding a weekly newsletter that highlighted new hosts 

The loyal following they already had kept spreading the word and unsurprisingly, the business grew.

The Exit

The pandemic crippled many businesses, but not those catering to RVs.  Many people started to realize there were alternative ways to live, and not having a permanent residence was one of them.  While Anna maintains that the “lifespan” of an active RVer is roughly two years (after which they feel like they’ve “seen everything” and are ready to be off the road), there was a massive influx of people willing to try it, and the host community of former RVers only grew exponentially from these new inputs.

Anna looked at the remarkable growth over the two year period, powered by a pandemic but also by smart changes she and her mother made.  Two concerns plagued her:

  1. What if this is peak RV?  The last thing Anna wanted to be was the last person in the casino, not knowing to cash out when the getting was good.
  2. This is my Mom’s nest egg.  Her mom had now pledged nine years of her time and treasure into this business and was getting on in years.  It would be a good time to reward her investment.

The buyer who ended up acquiring Anna’s business was Harvest Hosts, which partnered with wineries to bring in extra income and awareness among the TRV community.  Anna was promised that her brand would stay separate but would be part of a community of brands that Harvest Hosts used to promote RV hospitality and partnerships.  She got her exit, only having to stay on as a consultant for six months.


Three lessons to take away from this story:

  • Your side hustle can become a real business.  Often the missing ingredients are what Anna experienced: limiting beliefs, intentionality, and paying real salaries. 
  • Manage family with care.  While she had a decent offer originally, and even considered buying out her mom, she realized that it wouldn’t go down too well if she had a massive exit a few years after paying her mom a fraction of that price.  Manage family relationships in business with care.
  • Know when to get out.  While RVs and #vanlife are still very much a thing, Anna didn’t try to keep riding a rising tide: she put in the work and got out with a major upgrade from a previous offer only a couple years before.

Are you looking at getting out of your business in a two year window?  Follow Anna’s lead and start planning now.  We can help.

Case Study #61: Turning Tragedy Into Triumph

Feed CompanyThe top two reasons that business owners start moving towards a sale are:

  1. An unsolicited offer
  2. A major health issue

The second reason is what confronted Sandy Hansen Wolff in 2003 when her husband was diagnosed with leukemia.  He owned a business called AgVenture Feed and Seed that sold to regional dairy and beef farms.  It had great customers and solid employees, but had already begun to suffer from the health problems which took him away from his business before the diagnosis.

A Perfect Storm

The fear turned into a reality when Sandy’s husband passed away, leaving her as a 30 year-old widow in charge of a company with $1M in annual revenue but no documented systems or procedures, in a field that is male-dominated and which she had no expertise or experience in.

Additionally, the business had recently taken on debt to buy out a partner, which included a $500,000 loan (secured against Sandy’s home) as well as a 7-year payout.

Not only were there no policies and procedures written down, but employees didn’t even know what the margins were, or what they should be in comparison to the marketplace.

Sandy realized that her hope of restoring the business and getting it ready to sell in a few months, which was what her husband’s advice had been, was not reasonable.  She was going to have to get in with both feet.

Making Changes

From the pressure of the debt and with a desire to do something different in a fairly traditional industry, Sandy started moving in the direction of the “gig economy” long before that was a phrase anyone knew.  Instead of keeping functions and processes and staff in-house, wherever she could, she subbed out work to contractors.  A lot of skeptics scoffed at her, particularly because of her lack of expertise, but not only did the move stabilize finances for the company, it began to be imitated by other players in the business.

She slowly grew the business to a high of $8M in 2018, founding another business along the way, New Heritage Feed Co.  It was a chicken feed business that was using the infrastructure and relationships of the existing parent company to grow and thrive.

A Sale?

But, even as she got more and more excited and engaged in New Heritage, Sandy found herself slowing down with AgVenture, and taking a cue from books she’s read before about running businesses, she knew it might indicate it was time to sell.  She’d long since gone beyond rescuing the business to creating something that provided an ongoing and serious livelihood for her and her team.

There were also some discouraging changes in the marketplace.  Many farms were becoming corporate and some of the smaller farmers who didn’t sell out just sold up and left their farms.

She had had some discussions before with one of the feed manufacturers but the discussions had always ended with, “we don’t buy our retail partners.”  They were singing a different tune when Sandy called this time, in part because New Heritage was selling its own products that were starting to cut into the orders of this manufacturer.

Getting Serious

A first meeting led to a second in which an NDA was signed and they started to move towards a sale.  Sandy had seen that other similar businesses tended to get 4-5X EBITDA and along with this expectation she set out three conditions of the sale:

  • She wanted her employees treated well
  • She wanted the process to be amiable
  • She didn’t want to know the plans for the business after she left

Unfortunately, the first offer was unacceptable, with one of the members of the buying team clearly designated to play “bad cop” in the negotiation process.  It was refused but the second offer was also unacceptable, with an even more insulting offer for New Heritage, which was not part of the original deal, it being a separate entity.  

Sandy thought that at such a price she could just continue to run the business herself and walked.

Five minutes later, as she was driving away from the buyer’s corporate headquarters, their broker called, insisting that they wanted to do a deal.  Sandy pointed out that she had too, but the lowball tactics and manipulation had to go.

The buyer realized that their tactics were not working and came to something that everyone was agreeable to, which included an all cash upfront deal for Sandy, along with a 1% bonus on all gross sales for all customers that stayed with the new owners.

The best part, when Sandy signed the papers she was free to go: no earnout, no transition period, in part because she did what her late husband had not done: empowered her staff with processes and procedures so that they could run the company without her.

Lessons Learned

Sandy has an inspiring story, and offers some worthwhile takeaways:

  • Don’t be afraid to innovate, even in a traditional industry — by seeing the savings that could accrue with subcontractors Sandy took a risk that ended up paying off.  What cost-cutting measures might make sense for you that you’ve never considered?
  • Document, document, document — even though she took over a $1M business, it was one that couldn’t be sold.  By taking the time to create procedures, she created a company that could be sold.
  • Stand your ground — Sandy remembered a key rule of negotiation: always be willing to walk away.  This led the buyer to realize she was not going to be fooled by lowball tactics and brought the deal to a happy conclusion for everyone.

Have you had a health scare that has made you uncertain about your business?  We’ve worked with many similar situations before and would love to help.  Give us a call.