Built to Sell Radio

Mark Ferrier built the marketing agency TRAFFIKGROUP to more than $2 million of EBITDA before it was acquired by the private equity group Onex in an eight-figure exit. In this first of a two-part interview, Mark shares the story of how he got started in the marketing agency world and how a rift with his former partners left him on the wrong end of a $2 million lawsuit.

When Jon Cross founded Pondera Solutions in 2011, his goal was to reduce fraud in U.S. government programs like Medicaid and Unemployment Insurance. By 2020, Cross and his partners had built Pondera to more than $9 million in annual recurring revenue when they received an offer from Thomson Reuters for a reported $124 million.

In 2017 Lloyed Lobo and his partner, Alex Popa, founded Boast, a software application designed to simplify the process of applying for research and development tax credits. The bootstrapped company struck a chord with customers that found the process of applying for R&D tax credits cumbersome. By 2020 Lobo and Popa had built Boast to more than $5 million in revenue when they agreed to a $23 million majority recapitalization from Radian Capital.

At the age of 41, Rob Walling sold Drip, an email marketing software for enough money that he "would never have to work again". His only problem? Figuring out what to do next. In this special edition of Built to Sell Radio, we explore how to re-define your purpose and find happiness and fulfillment after you exit your business

Sarah Dusek and her husband started Under Canvass, which offered large-scale tented hotels (think "glamping") outside national parks around the U.S. The business got off to a successful start, and within five years, Dusek had four locations, which were collectively generating $3 million in EBITDA. Rather than sit still, Dusek decided she wanted to grow much larger and raised $16 million of capital made up of a combination of equity and mezzanine debt at a rate of 13%, which Dusek personally guaranteed. The stress of having her entire net worth tied to her business eventually caught up to Dusek, and she decided to sell a majority stake of her business to a private equity group (KSL Capital). Dusek rolled 25% of her equity and stayed on as CEO. By the time she stepped down from her leadership role, Under Canvass was worth more than $100 million.

In 2015, Michia Rohrssen co-founded a SaaS business called Prodigy to help car dealerships sell online. He grew the company to $3.3M in annual revenue when he faced a difficult decision. Rohrssen thought he could sell Prodigy for around 4-6 times revenue, but after paying off his investors, there wouldn't be much left over for the founders. That's when he decided to make a risky pivot to his business model. The change meant a short-term drop in Prodigy's revenue, while also making it more attractive to strategic acquirers. Ultimately Rohrssen and his co-founder sold the smaller version of his company for a staggering $110 million, or around 65 times revenue.

Casey Cavell has plenty of party stories: he dropped out of college to become a professional poker player, tried his hand (successfully) at buying self-storage facilities and apartment complexes, and eventually found his way to the business of baseball. More specifically, a franchised baseball academy for 5-10 year olds that he grew to five locations. Cavell essentially managed two exits from his D-BAT Academy franchises, first selling 66% of the business at a value of $1.5 million and then unloading his remaining equity at a $10 million valuation.

In 2017, Amman Ahmed founded MusicForPets, which launched the YouTube channels "RelaxMyDog" and "RelaxMyCat." Th ese channels aim to alleviate pets' anxiety, whether due to stress or their owners' absence. Under Ahmed's leadership, the channels amassed over 2 million subscribers and generated a 7-figure profit, largely because of effective SEO. As the business saw a surge in paid monthly website subscribers, it garnered the interest of California-based hip-hop label, Create Music Group, which extended a lucrative 8-figure offer that Ahmed couldn't turn down.

In 2006, Chad Rubin built Skubana, a tool specifically designed to streamline the operation of his e-commerce store across diverse channels. Sensing the software's potential, Rubin decided to offer Skubana to other online store owners. The platform rapidly resonated with e-commerce entrepreneurs, accumulating $5 million in annual recurring revenue by 2021. The company's success drew the interest of prospective buyers, eventually culminating in an irresistible offer from 3PL Central, a premier provider of warehouse management software.

In 2014, Alex Macdonald co-founded Velocity Black, a global digital concierge service for affluent clients. Unlike the basic concierge services of some credit cards, Velocity Black leverages technology and expert knowledge to curate personalized services such as travel, entertainment, shopping, and dining, accessible directly from your phone. By 2022, the business had expanded to $30 million in net revenue, attracting attention from potential buyers including Capital One which acquired Velocity Black for a reported $297 million.

Ian Fraser, a former professional golfer from Scotland, turned his expertise in fitting golfers with the right clubs into a successful venture, Tour Experience Golf (TXG), in 2016. His aim was to bring PGA Tour quality club fitting to everyday golfers. As TXG began to flourish, Fraser realized he needed to expand his team and impart his unique skills to them. By devising an innovative hiring process and employing a creative teaching method, he was able to grow TXG to a team of 14 employees, a YouTube fan base of 150,000 subscribers, and revenue exceeding $2 million. TXG attracted the attention of Club Champion, the United States' largest club fitting company with more than 100 locations.

In 2017, Chris Mole, based in the UK, founded Molzi, a full-service digital marketing agency catering to Amazon sellers. As pioneers in the field, the company witnessed significant growth. By 2020, amidst the lockdown-fueled e-commerce boom, Molzi doubled its team size to over 70 employees and generated revenues exceeding £4.5 million. In 2021, their success caught the eye of Brainlabs, who acquired Molzi, paying 75% of the purchase price upfront and committing the remaining 25% to an earn-out agreement.

In 2013, Paul Johnson founded Lemonaid Health, one of the first digital healthcare platforms designed to offer virtual medical consultations and prescription services online. While the company got off to a slow start, the pandemic accelerated the adoption of online healthcare. By the end of 2021, Lemonaid had agreed to be acquired by the DNA testing outfit 23andMe, for $400 million of cash and stock.

In 2009, Steve Reardon sold Peldon Technologies, a company he founded which provided pharmacies and retailers with photo printers and multifunctional kiosks. Following his departure, Reardon developed a passion for running businesses, a path that ultimately led him to venture into acquisitions. Now, Reardon serves as the CEO of Alpine Software Group (ASG), a branch of Alpine Investors. ASG's main objective is to acquire companies that specialize in vertical Software as a Service (SaaS) solutions.

This week on Built to Sell Radio, we're excited to feature a special episode with clinical psychologist, speaker, and author, Dr. Sherry Walling. Dr. Walling is renowned for her work with entrepreneurs, aiding them in navigating the mental and emotional hurdles of building and exiting a company.

In 2014, Mark Wright, who won BBC's The Apprentice, used the $250,000 prize to co-found Climb Online, a digital marketing agency, in collaboration with business tycoon, Lord Sugar. Their collective reputation and expertise in the industry enabled the digital agency to flourish, eventually becoming one of the largest in the UK, with a workforce of 130 employees at its height. In 2022, Climb Online achieved a significant milestone as it was acquired by xDNA, a global digital agency group, for a value that amounted to 9.5 times its EBITDA. This acquisition marked the first successful business exit for a participant in The Apprentice.

After a 23-year journey building Non-Linear Creations into a marketing giant with more than 120 employees, Randy Woods sold it in 2017 to Valtech. Valtech is a distinguished digital agency offering marketing, digital technology, and business transformation consulting services. Post-sale, Woods now serves as the SVP of Strategic Growth Opportunity at Valtech, a role dedicated to identifying potential acquisitions for the business. In the latest installment of Built to Sell Radio's Inside the Mind of an Acquirer series, we sit down with Woods.

In 2011, Tyler Smith, one of the top three real estate agents in California, launched SkySlope, a software platform that enables real estate professionals to efficiently manage their transactions, documents, and communication in one centralized system. Smith successfully bootstrapped the company to around $12 million in annual recurring revenue by 2016, attracting significant attention from potential acquirers. Among the interested parties, Fidelity National Financial emerged as the ideal fit, acquiring 67% of SkySlope in a deal valuing the company at over $80 million.

In 2017, Miles Faulkner partnered with Martin Cleaver to establish Blended Perspectives, a reseller specializing in Atlassian products, which offer software solutions for large teams. To distinguish themselves from other resellers, Faulkner devised an innovative product that set them apart from other Atlassian resellers. By 2022, Blended Perspectives had achieved approximately $30 million in revenue. Recognizing an impending industry consolidation, Faulkner made the strategic decision to sell to Contegix, a competing Atlassian distributor, for a multiple far better than what a typical reseller usually fetches.

Josh Abramson has an impressive track record of building valuable companies. In 1999 Abramson started CollegeHumor.com and before he could even graduate, Abramson had received an offer of $9 million for the website. Abramson went on to start the popular video-sharing website Vimeo and apparel company BustedTees.com selling his collection of companies to Barry Diller's IAC/InterActiveCorp for a reported $20 million in 2006. After a short stint reporting to Diller, Abramson left IAC and started TeePublic, an innovative online marketplace that serves as a platform for artists and designers to showcase and sell their distinctive designs on a wide range of products, including t-shirts and hoodies. With Abramson at the helm, TeePublic grew to $41 million in revenue and $4.5 million in EBITDA before he decided to sell to RedBubble in a $41 million deal, $36 million of which was in cash.

In 1998, Lori Morton founded AerieHub, a customizable mobile app that helps facility managers efficiently control building information and operations, including compliance records, blueprints, and employee training. Morton onboarded industry giants such as Netflix, Michelin Tires, GE, Bosch, and others reaching over $1 million in annual recurring revenue. Thanks to a rigorous onboarding process and exceptional customer service, Morton lost only two clients in 24 years. In 2022, JDM Technology Group acquired AerieHub in a lucrative 100% cash upfront deal.

In 2017, Gamal Codner established Fresh Heritage, an e-commerce company that created grooming products specifically for men of color. Codner grew Fresh Heritage quickly with Facebook ads and online reviews, but relying solely on paid customer acquisition almost bankrupted the company. Codner introduced a subscription program and turned one-time customers into automatic repeat purchasers, dramatically increasing the lifetime value of a customer. As a result, Fresh Heritage's revenue skyrocketed to over $4 million. In 2022, BRANDED, a leading global operator of digital-first consumer brands, acquired Fresh Heritage from Codner.

In 2008, Brandon Lazar started A+ Gutter & Window Cleaning, servicing homeowners in British Columbia, Canada. Lazar successfully bootstrapped the business, generating nearly $1.5 million in revenue before being approached by an acquirer. Lazar sold A+ Gutter & Window Cleaning to a private buyer in 2023 for approximately 3.5 times EBITDA, without an earn-out.

In 2016 Susanne Klepsch launched Meetfox, a scheduling and video calling solution that helps service professionals manage and monetize their time. By 2021 Meetfox had acquired a user base of 25,000. As Klepsch observed competitors being acquired by large software companies, she recognized the need to partner with a major player to compete effectively with Calendly. Consequently, she initiated a merger and acquisition process, reaching out to over a hundred companies, including the venture-backed, all-in-one marketing software Sendinblue. Eventually, Sendinblue made her an offer she couldn't refuse.

In his role as an acquirer, Kevin McArdle has purchased 45 businesses, including three from former Built to Sell Radio guests.

In 2013, Dan Reich and his partners founded TULA, a digitally native, probiotics-infused skincare line. Reich bootstrapped TULA to around $10 million in annual revenue when he realized he needed to replace himself as CEO. The company thrived under professional management, and by 2022, TULA had achieved revenue of over $100 million and received an acquisition offer from Procter & Gamble.

In 2016, Jeremy Parker co-founded Swag.com to offer branded promotional products for businesses. Parker and his team developed a powerful online platform that enables customers to order products through their unforgettable website. Thanks to Swag.com's innovative approach and memorable domain name, the company generated $30 million in revenue by 2020. However, when Parker began to explore acquisition offers, potential buyers viewed Swag.com as just a distribution company, which is typically valued in low single digits of EBITDA. Fortunately, Parker met the founder of Custom Ink, who recognized that Swag.com was more than just a traditional promotional products business - it was a technology company.

Microsoft's recent announcement about integrating OpenAI's features into Microsoft 365 serves as a prime example of how finding a strategic acquirer for your company can bring significant benefits. In this special edition of Built to Sell Radio, we will explore five reasons why larger businesses acquire smaller ones and provide tips on how to make your company more attractive to potential strategic acquirers.

In 2011, Tammer Kamel launched Quandl, a company that provided investors with data designed to give them a competitive trading edge. For example, Quandl offered subscriptions that let investors access private jet flight information for public companies as a predictor for M&A activity. By 2018, Quandl had grown to 75 employees. Kamel saw industry giants entering the space, but knowing the time and capital investment it would take to build a competitive offering, he believed they would prefer to acquire Quandl. Kamel began shopping the business around, and shortly after, Nasdaq acquired Quandl for a life-changing sum.

Kyle Scott launched Crossing Broad, a Philadelphia sports blog, in 2009. His irreverent and edgy writing style gained a significant following among Philly sports fans, resulting in thousands of daily readers. However, it wasn't until the 2018 Supreme Court ruling lifted the ban on sports betting in the US that the business flourished. To capitalize on the ruling, Scott merged Crossing Broad with Warwick Gaming into CBWG, which owned and operated several popular sports and gambling websites. The company instantly became the largest independently owned US sports betting affiliate marketing network, generating $5 million in annual revenue. In 2020, Ten months after joining forces, XLMedia acquired CBWG for $12 million in cash, $8 million worth of XLMedia shares, and the potential for another $9.5 million tied to a three-year earn-out.

In 2013 Mac Lackey licensed the FC Barcelona name to offer soccer camps and immersion trips to young athletes in the United States. Lackey grew the business to over $10 million in revenue before accepting a lucrative buyout offer that included various desirable benefits for sports fans.

In 2015, Brad Lorge founded Premonition, a technology company that offers logistics software to streamline a company's delivery operations. Rather than the traditional approach of financing their start-up through rounds of dilutive funding, Lorge asked his customers to pre-pay, allowing the founding team to retain 80% of the equity in their business. By March 2022, Premonition had grown to $3 million in Annual Contract Value (ACV) which is when it was acquired by Shippit for $20.5 million -- an implied valuation of just under 7 times ACV.

Rachel Elsts Downey is the founder of Share Your Genius, a podcast production company that has been helping businesses increase their brand visibility since 2017. Over the years, Share Your Genius has grown into a successful business, generating $500,000 in revenue by 2021. That's when Downey was approached by one of her clients with an offer to acquire her business. The client wanted to hire Downey and saw the acquisition of Share Your Genius as the best way to recruit her. After some deliberation, Downey accepted the offer and agreed to be "acquihired". This deal valued Share Your Genius in the mid-six figures and provided Downey with cash for her business, a secure salary, bonuses, and some equity in the acquiring company.

In 2003, Ron Holt founded Two Maids & a Mop, a residential cleaning business. Thanks to an innovative employee bonus plan, Holt was able to grow his business to 12 company-owned locations. That's when a random encounter with Fred DeLuca, the founder of Subway, changed Holt's life forever. Deluca gave Holt the inspiration and a roadmap for franchising his business which Holt used to grow Two Maids & a Mop from 12 to 91 locations across the United States and $40 million in revenue. In 2021, eager to pursue the next chapter in his life, Holt began exploring selling Two Maids & a Mop. A short time after, JM Family Enterprises acquired the business in a lucrative deal valued at well over ten times EBITDA.

Sam Parr founded the Hustle, a media company that delivers business and tech news to millennials in an engaging and relatable way, in 2015. The business was an instant hit with readers, generating millions of page views in only a few months. By 2020 Sam Parr had grown the Hustle to $15 million in revenue, attracting the attention of tech giant HubSpot. A few months later, the tech conglomerate acquired the Hustle in a lucrative eight-figure deal.

In 2016, Derek Morin founded Tabarnapp to create after-market sales applications for Shopify website owners. The company was an instant hit generating more than 1,000 paid customers in its first few months after launching on the Shopify platform. In 2020, Morin acquired one of his partners' stake in Tabarnapp, valuing the company at $400,000. Two years later, Morin sold Tabarnapp for a much higher price, implying a tenfold increase in the company's value.

In 2012, Spencer Thompson founded Sokanu, a career assessment platform aimed at replacing the outdated assessments that existed at the time. Sokanu's "Career Explorer" quickly became one of North America's most prominent assessment tools and was adopted by the U.S. Government and top colleges around the world. The assessments were a huge hit with job seekers, yet Thompson struggled to generate sales. Rather than fix his revenue model, Thompson looked for an acquirer who would value his enormous user base. Soon after, Sokanu received a lucrative acquisition offer from Penn Foster, an online educational institute.

In 2011, Perry Rosenbloom started the web development company, Brighter Vision. After a few years of jumping from project to project, Rosenbloom had a breakthrough. Instead of doing web design for everyone, he decided to focus on creating websites exclusively for therapists. His decision to niche down worked as revenue soared. By 2020, Rosenbloom had thousands of customers and millions in sales, which was when Evercommerce made an offer to acquire Brighter Vision for $17.5 million.

In 2016, Marc Lafleur started truLOCAL, a subscription business allowing people to buy locally-raised meats online. To ignite sales, Lafleur and his co-founder pitched the company on the popular Canadian TV show Dragon's Den (similar to Shark Tank). The presentation was a hit as they received an investment of $100,000 from Dragon's, Michele Romanow and Joe Mimran for 10% of the business. As a result of their new partners and the free marketing that came from the show, revenues soared. By 2020 truLOCAL had reached sales of eight figures when Lafleur began receiving interest from acquirers. A few months later, the company was acquired by EMERGE in a deal valued at $16.8 million.

In 2009 Simon Penson founded Zazzle Media, one of the first content marketing agencies in the U.K. Although the company was successful, Penson had difficulties winning large customer contracts due to the size of his agency. To enhance his credibility, in 2015 he decided to merge Zazzle Media with Stickyeyes, which, at the time, formed the largest content marketing agency in the U.K. Penson's decision proved to be savvy.

This week on Built to Sell Radio, we highlight the top strategies from the 10 most popular shows of 2022.

In 2006 Kelby Zorgdrager started DevelopIntelligence, an outsourced training provider that helps programmers develop new skills and adapt to ever-changing technologies. The business snowballed as Zorgdrager onboarded most Fortune 500 giants in his space. However, Zorgdrager had a problem. The company was too dependent on him. To ensure the business could succeed without him, Zorgdrager implemented a four-step system to replace himself as the rainmaker of his company. The strategy worked. By 2020 Zorgdrager had grown the business to $12.1 million in revenue, which piqued the interest of some acquirers. A year later, Zorgdrager signed an acquisition offer from Pluralsight in a deal valued at $48.9 million.

In 2016 Trevr Smithlin and Dave Hanley founded AdvertiseCast, a marketplace connecting podcasters with advertisers. The company experienced tremendous growth, doubling revenue year-over-year until 2020. That's when the uncertainty triggered by the COVID-19 pandemic caused Smithlin and Hanley to consider their strategic options. In March 2021, Smithlin and Hanley signed an acquisition agreement from Libsyn for $30 million.

In 2016 Channing Allen and his brother Courtland founded Indie Hackers, a blog and forum that encourages founders to transparently share their ideas and stories. After only eight months, the brothers had grown the business to $8,000 in revenue when they received an unexpected email from Patrick Collison (co-founder and CEO of Stripe), who was looking to acquire the company. Although tempted to keep building, Stripe's offer was too good to refuse. The brothers agreed to be acquired by Stripe in March 2017.

In 2012, Jaclyn Johnson founded Create & Cultivate, a media company that educates and inspires women to succeed in business. By 2018, Johnson had grown Create & Cultivate to eight employees when an acquirer offered her a staggering $40 million. Unfortunately, the deal was too good to be true. When the acquirer discovered her hands-on management style, they pulled out. Learning from her mistakes, Johnson implemented a collection of strategies to ensure Create & Cultivate could thrive without her. By the end of 2019, Johnson had grown to $14 million in revenue ($4 million EBITDA) when acquirers came knocking again. This time she was ready. Create & Cultivate was acquired by Corridor Capital in a deal valued at $22 million.

In 2002 Chuck Crumpton started Medpoint to help businesses bring medical devices and pharmaceuticals to market. The company quickly took off after Crumpton landed a prominent blue-chip client. It was a blessing and a curse. At one point, the blue-chip customer made up 83% of Medpoint's revenue. Determined to reduce his customer concentration, Crumpton implemented a clever strategy to minimize his dependency. The strategy worked as Crumpton successfully reduced his reliance below 50%, allowing him to sell Medpoint in 2020 for around five times EBITDA.

In 2009 Natalie Nagele and her husband, Chris, launched Postmark to help businesses deliver emails to their customers quickly. A decade in, Nagele had grown the company to around 40 employees, which was when she began feeling burned out. The pull to explore new interests was the catalyst to accepting a life-changing acquisition offer from Active Campaign in 2022.

In 2020 veterinarian Dr. Joseph Marchell started Old Brown Dog Veterinary Partners (OBDVP) after identifying a unique opportunity to do a rollup of family-owned animal hospitals. Marchell acquired three practices for around ten times EBITDA. He then implemented a streamlined operational strategy that resulted in the sale of OBDVP less than two years later for almost three times the purchase price.

In 2015 Nick Santora founded Curricula, a cyber security awareness training program that helps companies defend themselves against hackers. Santora created fun, cartoon training videos in contrast to the dull content that existed at the time. Companies happily embraced Santora's approach. By 2021 he had grown Curricula to just over $2 million in annual recurring revenue when he accepted an acquisition offer from the cyber security giant Huntress for $22 million.

In 2008, Gavin Hammar started Sendible, a platform that allows companies to manage all their social media accounts from one place. The company grew steadily until 2016, when Hammar hit a sales plateau. Challenged to combat a high churn rate, Hammar took several unique steps to humanize his business. Becoming a more approachable brand worked. Sales increased by 30% year-over-year and by 2021, Sendible had 47 employees when they were approached by ASG with an acquisition offer Hammar couldn't refuse.