FGP 50: Expert Advice You’ll Need When Selling Your Business (Scottsdale Founders Forum)

[Speaker 1] (0:00 – 10:07)
Hi, I’m Armand Roman, host of the Founder’s Guidepost. You’ve built your business over decades, and now it’s time to think about that once-in-a-lifetime exit. You’ve come to the right place.

Here, you will hear business exit professionals talk about what you should know before exit. Besides hosting the Founder’s Guidepost, I’m CEO and founder of Axiom Founder’s Family Office, working with founders to help preserve their American success story. And it all begins with a founder stress test.

We also host the Scottsdale Founder’s Forum for the founders considering exiting in the next 36 months. Here’s to your hard work and to your American success story. Enjoy.

Beyond you, if you go through all the right planning steps ahead of time. And if you don’t, then you may be like the widow who calls me every once in a while where the husband suddenly died and now it’s a problem, a big problem. So the point of today is to talk about the eventuality that will happen to all of us.

Our bodies will at some point die. And before that happens, let’s make sure that you are well-armed, well-equipped to be able to plan for that well in advance so that your business, that company worth millions in many cases, is going to continue beyond you and that your family gets the benefit of all those years of hard work. So that’s what today is all about, is planning for that transition with your business.

So here’s what you’re going to know today. You will know when you need to start planning. And you’ll hear from the panelists here in just a bit.

You will know the anatomy of a sale. The attorney on the panel, Mike Patterson, will speak to those things that matter when it comes to writing up that contract in the sale of your business. You will know the pitfalls to avoid.

We all hear horror stories about mistakes and problems. You don’t want to be in that category. And by being here today, you will hear the different panelists and the expertise that they have that they will share with you today.

Here’s what you’re going to have. You will have an opportunity to hear these experts. You will also have the opportunity to ask them directly your own questions.

If you are not comfortable in this setting, asking a question out loud, you’ve got two choices. You can take that pad of paper in front of you and the pen, jot that question down, and get it to either me or to Miguel or Tom here on the sides. And they’ll get that over to me, and I’ll make sure that we get the question asked.

Or when social hour begins at five o’clock, then our panelists have agreed to stay. And you can then directly ask them questions in the privacy of a corner of this facility. But that’s why this facility made a lot of sense, so that you can do that.

And that’s why the social hour is part of today. And here’s what you will have, what you’re going to feel. You’re going to feel better that you have prepared for that eventuality.

And you will feel better knowing that you can confidently take those steps and continue forward to exit your business when that time is right. After the meeting today, we will follow up with you. And you’re not going to get pitched anything about life insurance, anything like that today.

It’s not going to happen, so you can relax. This is all about you. Because as founders of business, you may or may not know, but this whole American economy is driven by people like you.

People who weren’t afraid to step out and stick out their neck and start a business. And many of you have built some fantastic businesses that employ hundreds of people. And so you are the backbone of this American economy.

And for that, I am very grateful. And I think I could safely say that our American economy is very grateful as well. So a little bit about us.

The Scottsdale Founders Forum came about, we thought about this about six months ago. And we did it because the founders we were seeing in the valley here were getting approached by private equity firms and others from out of state who wanted to buy your companies. And if you spent 20 years building your company, and someone comes by and offers you a big fat check, it might seem very tempting, and you might take it.

But we had a client that actually did that last year, and we didn’t feel they took all the appropriate steps so that they could really maximize their exit and come out the best that their family could. So that was a shame, of course, when that happens. And you don’t want that to happen to you.

So that’s probably why you’re here and why you’re going to really enjoy hearing the panelists. Axiom Founders Family Office is a wealth management firm here in Scottsdale. It’s my firm that I started 22 years ago.

And what we do is we work with founders of businesses. We are not an ordinary investment advisor or financial advisor or wealth manager. I say we’re not ordinary because our focus is you.

It’s the founder of the business. And I’m going to spend about one minute just to show you the formula that you would be seeing and hearing from us as we help put things together so that we can make sure we look at all those things that matter for that business owner. So after the meeting today, we will follow up with you for two things.

Well, probably three, really. But the first thing is to get some feedback from you. And we will be planning other events like this.

So the feedback that you give us will help shape some of those events. And the other thing that we’ll be asking you about is just to get a little conversational dialogue with you to see if maybe we’re a good fit together. If so, great.

We’ll continue. If not, that’s okay, too. And there was a third part of that about our follow-up.

We are going to, as I mentioned, get video and audio of this. And so if you want that, once it goes through our compliance department, then we will release that to you as well. If you’d like that, make sure to let us know.

But this is our wealth management formula. I’m going to paint this picture for you so you can see what we’re looking at when we think about you and your business and your family. To us, wealth management is investment consulting plus advanced planning plus relationship management.

The investment consulting part is how do we invest your money? Because we do that. Let’s go to that second line, advanced planning.

Advanced planning is wealth enhancement. The biggest piece of that is really what Tom mentioned, taxes. To us, wealth enhancement is taxes, cash flow, and debt management.

All of those matter to enhance your wealth. Wealth transfer is WT. Wealth transfer is at what point does it make sense for you to begin transferring your assets to your heirs?

It might be today. It might be when you pass. Wealth protection is how is your overall net worth protected?

That’s the WT. We protect your net worth by working with our professional network to look at what types of trusts can make sense, what types of business entities can make sense, and what types of insurance should you have to help protect your overall net worth. The last piece on the second line there is CG.

That’s charitable giving. Many of you, if not all of you, are very charitably inclined. Part of what you would like to do is leave something to your church, your alma mater, or some other cause or entity that really tugs at your heart.

We want to make sure that you get the best strategies employed so that when you are charitably inclined, you get the biggest bang for the buck. That often involves some kind of a tax deduction or credit or something along the way. The third line of the formula is relationship management.

Relationship management is CRM, client relationship management. It’s all about you. When I say that, I mean what I’m talking about is what are your values?

What are your goals? Who in your life are the relationships that are most important to you? What assets do you have?

What advisors do you work with? What processes do you employ? What are your interests?

Because that drives everything in the wealth management process. The last piece of that is the professional network relationship management. What that means is what often happens as you start your business and grow and become much more, your wealth begins to grow because of the business, is you end up talking directly with your CPA, directly with your estate lawyer, directly with your tax person.

You have to suddenly know enough to talk with the insurance agent, with the financial advisor, with the investment, with the banking, and you get in the center of all those. What we do as your wealth management firm is we get in the middle there so that we, with our experience, we speak with your CPA and your attorney and your banker, et cetera, because we have that skill set and experience that allows us to work as your advocate in that role. So that’s the last I’ll talk about our wealth management formula, and now what I’ll do is we’ll take that down, and Dan, why don’t we go ahead, and there you are.

Thank you. So Dan, let’s get together. Thank you, Tom.

Let’s get together up here at the front, and I’d like to introduce you to Dan Schweiker. Dan Schweiker is the co-founder of China Misty. Dan, you and I are going to sit here at the front, and we’re going to have a conversation here at these chairs.

[Speaker 3] (10:07 – 14:07)
So I got in the tea business by going broke in the coffee business, and it was either start another company or get a real job. And no offense, Mike, but I used to be an attorney, and I didn’t want to do that anymore. I had three kinds of clients.

They were in jail, getting a divorce, or dead. After a while, you like the dead ones the best, because you knew you were going to get paid, and they never called in the middle of the night. So I didn’t want to go back and do that.

So I met somebody else who was going broke in the coffee business, different part of it, but still going broke, and we each scraped together $300 and bought 80 pounds of tea, and we just happened to be sitting under the apple tree when the apple fell, and we just happened to be wearing a catcher’s mitt. So timing was very lucky on our part. We started out working out of my partner’s garage, and we just thought that we could sell a little bit of tea to some local restaurants, and you know, enough to pay rent on our places, and do that.

And the business just grew, and we just kept growing along with it. But you know, we had it for 35 years, and after a while, a couple things happened. You know, no matter how long you do it, no matter how much you love it, you feel yourself starting to get a little bit stale, and I felt that.

You know, you’re doing the same thing day after day. You’re dodging the same bullets. I mean, I was a little iced tea company.

It was a great business out here. Loved it. But you know, there were people with names like Starbucks, Coke, Pepsi that could have stepped on us anywhere along the way.

A lot of those people acquired about us over the years, but we were always too small for what they were doing. And we did it until I started getting stale. I brought in some, I’m a firm believer that the first thing a CEO does is start finding their own replacement.

So I started grooming people, and we had a person who came to work for us. She used to work at Burger King, making hamburgers, and came to work for us, started delivering tea in the afternoon. And whatever that spark is you look for in an employee, they had it.

My partner and I kept tossing things to her to do. One day, we had a guy in the back room that would go out and do service calls, and he didn’t like to work that hard. And so she came in and said, hey, so-and-so in the back room won’t go do the service call.

And we just said, you know, take care of it, would you? So about five minutes later, she came back and said, okay, I fired him. Now hire somebody better.

So we thought, you know, this person’s got a spark. They’ve got to do it. So she was just wanting to earn enough money to move out of her house and move in with her loser boyfriend, and we said no.

So we paid for her college education and her master’s degree. She ended up taking over the business and becoming a CEO. I became chairman.

And six months later, she came down with cancer. And, I mean, it was tragic. It was the kind of cancer that affects males between the ages of 19 and 21, and she was a 41-year-old woman with a 7% chance of making it.

Knock on wood, many years later, she’s healthy as a horse, but she could never go back to work again. She went on permanent disability. So at the same time, a couple of my shareholders decided to get crosswise with each other, and we got that problem taken care of.

We paid an attorney downtown $400,000 to solve a problem, where at the end of it, everybody ended up exactly where they started. And for me, that just took the spark out of it. So, you know, for decades, I’ve been getting phone calls from people.

[Speaker 1] (14:07 – 14:09)
So is that when you knew?

[Speaker 3] (14:09 – 14:34)
That’s when I knew. That’s when I, you know, I’ve gotten phone calls for years, and I just said, no, thank you, no, thank you. Finally, shortly after that, I got a phone call that sounded legitimate, and I said, okay, it’s time.

And that’s when I knew. You know, it just, everything, like you said, life comes, life starts, life ends. You got to figure out at some point, you’re not going to be doing this forever.

And I wanted to do it on my timing.

[Speaker 1] (14:36 – 14:46)
So you told me before that you hired an investment banker. So how did that, you also said that your partner, he wasn’t exactly on board to sell.

[Speaker 8] (14:47 – 14:53)
He was not. So the investment banker, somehow you chose one. Yes.

How and why?

[Speaker 1] (14:53 – 14:54)
How did that work?

[Speaker 3] (14:55 – 17:09)
Well, again, Mike, one of the things I first learned in law school was that a lawyer who represents himself as a fool for a client. So I knew enough to know that I wasn’t smart enough to sell the business myself. Because, I mean, I could have done it easily.

I know how to write contracts and things like that. But I would have left too much on the table. There were things I didn’t know.

So I thought it was important to find people that did know how to do that. And it took a while. Once my partner realized that I was dead set on selling it, and I was the one really running the company.

So, you know, he came along and got behind it a hundred percent. But I also got my advisory board together who are much brighter than I am. I would always get these really good people by just saying, look, I’m a little company.

I need help. You know, one of them had been the president of Sara Lee Coffee and Tea. People that were just much more versed and much brighter than I was.

I brought them together, picked out three different investment banking firms, kind of boutique ones, and kind of thought we knew which one we’re going to hire. And we did the interview process. And this little boutique firm out of Chicago just blew everybody away.

It was just amazing. And it was somebody, you talk about relationships with your clients, this was somebody who talked a lot about selling businesses at different coffee and tea conferences. I’d seen him for probably 15 years at different things.

We’d say, hi, have a cup of coffee. And his in-laws lived down here. So he was down here periodically.

So we’d grab a cup of coffee. But I didn’t let that play into anything. He was not my favorite going into the process.

Turned out to be absolutely perfect. And actually, after all these years, I actually found the old pitch book that he put together for us. So I brought it with me tonight if anybody wants to look at it afterwards, because it was interesting.

Hi, Jody. A lot of old friends here. So that’s what we did.

And we did an interview process. And then we engaged that one firm. And then the fun began.

[Speaker 1] (17:10 – 17:27)
So, Dan, given what you went through, the people you’re looking at, most have not gone through that before themselves. What advice would you have for them as they’re thinking about following the same path or similar path that you did?

[Speaker 3] (17:28 – 18:57)
Well, I was telling Armando when we were talking the other day, well, at Chinamist, we’re kind of pack rats when it came to our accounting materials. Like when we sold the company five years ago, we still had our original accounting papers from 1982 when they were printed out on that green and white computer paper, you know, with the little sticker things. We still had those.

That was very important. I mean, having all your financials nailed down tight. Now, we were never big enough to have audited financials.

We just used reviewed financials. But we’re always very conservative on our financials. Of all the things that bothered me in business, I didn’t want to wake up knowing that I cheated somebody one time by the name of IRS and it was going to come back and haunt me.

But we had very good financial records. We had a strategic vision of the company. We knew who we were.

I’m sure a lot of you have read Jim Collins’ book, Good to Great. If you haven’t, I still, even though I’m out of business, I still reread Good to Great periodically because I think it reflects on life as well as business. But, you know, we knew what our driving motivator was.

We knew where our profits were. And so we had that very well articulated. And a good investment bankers, you’ll hear from people later on, they’ll help you put all that into the right words and the right pictures.

[Speaker 1] (18:59 – 19:12)
Good. And so Dan, you mentioned you wish you’d started earlier in the process or before the sale, maybe started earlier. How much earlier before the sale would have been ideal?

[Speaker 3] (19:13 – 20:04)
You know, I almost think as you’re doing a business, and I’m not a believer in going into business just to make money and make an exit. I think that’s the wrong reason. I think I was in there to create a product and to create jobs and keep things going.

But I think almost from day one, you have to look at the end game and see what that’s going to look like. Because if you know if you’re going to pass it on to family, if you’re going to go public, if you’re going to go do an ESOP, if you’re going to do an I, go public, if you’re going to just go out and sell it, you know, all those end games have different objectives and you structure a company differently. So I think you probably don’t know at the beginning which one you’re going to do.

But I think you need to narrow it down to a few of them and start planning the company so it will look right when the time comes.

[Speaker 1] (20:05 – 20:12)
Good. Well, Dan, thank you so much for sharing. What you don’t know is everyone, every table has a box of your tea on it.

[Speaker 3] (20:12 – 20:14)
With that horrible picture on the back?

[Speaker 1] (20:15 – 20:17)
I don’t get paid for that picture, by the way.

[Speaker 3] (20:17 – 20:40)
Someone grab the tea, just hold it up so Dan can see his tea on your table, please. But I will tell you one last thing that a mentor told me in the very beginning. It was true.

When you do sell your business, whatever you get down up front, be satisfied with it because chances are that’s all you’re going to get.

[Speaker 1] (20:40 – 20:51)
So, Dan, thank you. We need to give that box of tea to somebody at the table. I was thinking maybe the person who’s had their company the most number of years, how do you think they should figure out who gets the tea?

[Speaker 8] (20:52 – 21:01)
Who likes to drink tea? If you’re a coffee drinker? Good.

Well, Dan, thank you so much. Thank you.

[Speaker 1] (21:06 – 21:26)
So I will introduce the panelists and I will ask them to expand on the introduction because they know themselves a lot better than I do and they can tell you why it’s more relevant that they be here in front of you. So we have at this first table, these are two investment bankers, John Carr here on my left and then Jim over here as well.

[Speaker 8] (21:26 – 21:29)
And the middle is Mike Patterson. Mike is an attorney.

[Speaker 1] (21:29 – 22:27)
His role is to draft that sales contract and help represent the seller or the buyer. And when I spoke with Jim, sorry, with Mike a couple of months ago about what he does, he was like the fire hose coming out of me. So what I’ll do first is talk with this panel and then we’ll go to the second.

But so that you’re aware of who’s at the second, the Tyler here is with a private equity firm called the Pivotal Group that is owned by Francis DeJoffe here locally, a businessman that many of you whose name you may have heard of. And Tyler’s role is to look at companies to buy. So he is a prospective buyer of companies.

Next to him is John Ciancio. John is an exit planner. His role is to help a business owner understand how you can exit your business.

And then, of course, we’re going to have the CEO founder perspective as well on this table.

[Speaker 8] (22:27 – 22:39)
So I’ll begin here with the first three next to me, closest to me. And this is a question really for Jim and for John. I’ll ask John first.

How is value determined of a business?

[Speaker 1] (22:39 – 22:52)
I spoke with the business owner a few months ago and they told me that they had been approached to sell. And the first thing the person said is, how do I know what my company is worth? How do you determine value?

[Speaker 6] (22:55 – 23:48)
It’s a pretty broad question. The banker’s response is through an auction process, correct? You know what you’re worth after you run an auction, irrespective of what you might think your intrinsic value is.

That’s the theoretical value. No one cares about that when you go out to market to 200, 300 people. They all say you’re worth $10.

You’re worth $10 at that point. If you don’t want to sell and you feel like you’re worth more because you’re going to go through some activities in the next few years to grow, then just wait. But there are a number of theoretical ways to value the business.

But from our perspective, in a city like this, where you see so many $50 million companies selling for $35, because people don’t know that difference, right? They don’t know what they’re worth. They’re great entrepreneurs, but they have no idea what financial investors are strategically for them.

We believe you should always run an auction to ensure that you get that best value.

[Speaker 8] (23:49 – 23:51)
And then Jim, did you touch on that as well?

[Speaker 7] (23:52 – 24:32)
I would agree with everything John said. I would say that there is a baseline value of a business and that is some multiple of earnings. People always talk about multiples.

So we recast financial statements. We come up with a number called EBITDA, earning before interest, taxes, depreciation, and amortization. And each industry is going to have a range of multiples for that.

But you often get more than what the comps or multiples show based upon a synergistic buyer, based upon running an auction process. And we’ll have some examples of that, I’m sure, later.

[Speaker 1] (24:32 – 24:49)
Great. Thank you. And Mike, let me ask you if you could talk about when it’s time to sell and you’re the attorney that’s been engaged to help that seller sell, what is the anatomy of what you’re doing for them as the attorney who’s hired to do your role?

[Speaker 4] (24:49 – 27:38)
Thanks. And by the way, I’m a big proponent. When they say auction, I say to the client, reinterpreting that, they’re running a process and that auction is basically a process that they control where they go out and get hopefully multiple offers for you and bid it up to get you the maximum out of that.

What is the anatomy of a sale? You have some preparation that you do that you could even start now. And I would say tie up, make sure your IP is tied up, clean up a lot of things.

Your core business, focus on your core business. If you’ve got three or four divisions that just really aren’t making much money and you’ve got a lot of extraneous activity, think about consolidating and getting the revenue up and really focusing on what you do best. Get your books and records in order because someone will be looking at them.

Look at your team. Tie down those key people that you want them to be your executive team. You want them to be there when a buyer comes looking.

They are part of the value. And then in terms of what the anatomy would be, once they get some buyers or we have someone who you think you’re going to dance with, we will do a letter of intent. What’s in that document?

We’re going to nail down the due diligence. We’re going to talk about an exclusivity period. And you as the seller want to keep that short.

They want to push that longer. But it’s basically that you can’t talk to anybody else while we’re dancing is the idea. But you want them to fish and cut bait.

And one of the big things why I like them running a process is you have leverage and you’re in control. It’s not just the price. When there are multiple buyers out there wanting to make an offer on your business, it helps me as an attorney get you the best terms and negotiate harder for you.

And then that LOI will probably be a range of terms of what they expect to pay and confidentiality. Then we do something called definitive or definitive agreements. And in that period, we’re going to draft the document that everybody has been talking about that is the actual sale agreement, purchase and sale agreement or asset purchase agreement if it’s an asset sale.

And then there will be a period maybe where there’s some due diligence, then we’re going to close it. That’s the anatomy of what I would say. And I would just add to that, there’s a lot of terms we’re going to talk about in a moment more, but that’s generally the process.

[Speaker 1] (27:39 – 27:49)
Great. And then, Mike, a follow-up as well. What about a time frame?

What is a normal time frame as you’re doing your work and start to finish? What is a normal time frame in all that?

[Speaker 4] (27:50 – 28:46)
Yeah, when I got engaged, I asked my friends, what’s the right time frame to get my fiance to get married? I said, if you’ve got a week, it’ll take a week. If you’ve got a year, it’ll take a year.

But I’m joking there. But I think you would want to see someone, it depends on the type of your business, how complex it is. But if a business is simple, we would want to push for within a period of months.

But I don’t know if these guys want to talk about that too. It depends on how it’s going to be financed and how much due diligence there has to be. I did a couple of health care deals last year where three or four due diligence teams coming in doing some hefty looking.

And so it will depend a little bit.

[Speaker 1] (28:48 – 29:10)
Okay. So thank you. This is a question, let me ask this question for John.

John, how does an investment banker, excuse me, how does an investment banker help that first time seller? If they’ve not gone through the process, they might not really understand what it is that you do. So maybe you could speak about what you’re actually doing for them as you represent them in that sale.

[Speaker 6] (29:11 – 31:54)
Sure. There’s a list, certainly. I think the primary buckets are preparation, coaching and education, auction running.

And I think perhaps two components to that one is just the labor component of the owner has a day job. We do not. So we put four people on every deal.

So the actual labor associated with that, but also changing the dynamic of a sale. If you do not run an auction and you don’t have a banker, you’re sitting there running your business, you get approached by that large strategic who says, hey, I want to buy you for $40 million. If you engage in that one-on-one negotiation, you’re effectively already lost.

Our goal is to run a process, the right materials, position the business, go out and get you as many as possible, right? But what is typical is that we get five to 10 offers that are good. And at that moment, you now have negotiating leverage.

You can typically extract greater value than you ever could on your own. So how long do you want me to talk about that? In the preparation category, a lot of it does have to do with positioning.

We talked about that earlier. We talked to a business. I’ll be a little bit coy, but a call center business, as we got to know them, realized they’ve got 55% of the dollar margins.

You know, the typical industry is like a third of that. Realized, okay, why do you have such margins? Well, they have technology that they developed in-house and dramatically improves the efficiency of employees.

Suddenly, we realized we’re not looking at a call center, which is typically a pretty modest multiple business. We’re looking at a tech-enabled services business with technology that can be utilized for strategics. If you imagine a business four times as large buying this company, suddenly the strategic value of this and the software value of this is worth substantially more than the cash flow.

So positioning, understanding the business and understanding how to market it specifically to the investors that they would like to sell to based on how their goals are. Do they want a full exit? Do they want a partial exit?

Preparation is critical. I also think the education comes in where we’re helping you understand what’s about to happen, helping you understand what to say and what not to say. You all are good engineers or people who know product market fit or whatever it is you do, but many of you are not typically sitting across the table from institutional investors every day and accustomed to speaking their language.

So I think it’s a matter of ensuring that your messaging is appropriate for your goals. Maybe I haven’t talked enough on that.

[Speaker 1] (31:54 – 32:29)
No, that’s great. Thank you. Jim, let me ask you a question.

A lot of times when people have not, when they haven’t been through the process before, the closest thing they might know is a realtor. They might think of a realtor who’s bought a home, shopped a home, helped clean it up maybe and get it ready for sale. And so that, you do a lot more than that, I understand.

But you’ve got a really good story about a bread maker. Could you maybe talk about the bread maker and how you did your role, different from a realtor, to help that bread maker have a successful exit on his business?

[Speaker 7] (32:30 – 35:26)
Okay, well I pulled him onto the story before and I’ll lead off by saying this is my best story in 35 years of doing this. So I’m not going to tell you my failures. There was one, I think.

No, okay there wasn’t. But my best story, and I can, what we do is very confidential. A lot of times we can’t talk about our clients.

This is one that I can talk about because it was purchased by a public company and the information was public. So a gentleman came to me who had a company called Alpine Valley Bread and it was non-GMO organic breads. It was at a time in the market where white bread sales were declining 10% a year.

Organics were growing drastically. And he said, can you get 20 million dollars for me? And we said, no, not today.

But if you take some time to get the business ready to sell and you do these things, I think we can do better than that. So we spent almost two years and the business kept growing and growing and he did everything that people talk about to get it ready for sale. So we went to market and as John has talked about, we go to market and we run a process and that process is going to market without a price.

So we sat down with our client in a room and said, okay, well, what do you think we’re going to get? And another one of the gentlemen that worked with me and I play this little game often and we wrote on a piece of paper, what do you think we’re going to get for this? And then we turned him over and compared.

And he had written down 45 million and I wrote down 48 million. And the seller who two years before wanted 20 million was really happy with that number. So we went to market.

We got multiple bidders and one of the bidders we had was a company called Flowers Foods. They’re the second largest baker in the United States. And they were one of about 10 different prospective buyers we had.

So we said, here’s our process. Here’s our deadline. Part of a process is setting a time schedule and forcing people to your schedule rather than theirs.

So we said, here’s the deadline for your indication of interest. And they said, oh, well, I don’t think we can make that deadline. You’ll wait for us.

We’re Flowers Foods. We said, no, you’re not involved. That’s fine.

We’ve got plenty of other people. That’s a deadline. Be there or don’t.

And they said, well, all right, if we got to hurry up, we’ll do that. But I’m going to tell you right now, we know what Rudy’s Organics sold for. 65 million.

And we’d never pay you a penny more than that. And I kept a straight face.

[Speaker 10] (35:27 – 35:27)
Okay.

[Speaker 7] (35:29 – 37:40)
So we go to market. We go through our letter of intent. We go through the process, our deadlines.

Come back and say, here’s the final deadline. And Flowers came to us and said, so is Bimbo bidding against us? Bimbo was the number one baker in the United States.

They were number two. And we said, we can’t tell you if Bimbo is bidding against you. And if Bimbo asks us if you’re bidding against them, we wouldn’t tell them that either.

It’s all confidential. So you better make it your best deal. And they said, okay.

Now, this is a case where they were concerned about a competitor buying them. They were looking for an answer to Organics that they were failing at. This was not a multiple of earnings sale.

This is the synergy that we thought. So Flowers came back and said, a hundred million cash. That was the company that said never pay a penny over 65 million.

And the owner said, my God, I’ll never spend a hundred million dollars in my life. He says, what do we do now? When do we sign?

And I said, Doug, do you trust me? And he said, what? I said, I need you to trust me.

He said, okay, what are you going to do? I said, I’m going to tell them it isn’t enough money. He said, what?

So we went back and said we really liked them, but they were just going to have to do a little better. They paid 120 million dollars in cash for that business. Now, that’s my best story ever, but that’s a company that we thought was worth 45 to 50 million.

But because of other reasons besides earnings, the buyer paid substantially more and I got a new airplane.

[Speaker 3] (37:43 – 37:48)
What was the sales for a year?

[Speaker 9] (37:50 – 37:52)
That I can’t tell you.

[Speaker 1] (37:52 – 38:19)
Are you wondering if you’ve missed anything in your planning? We hear that a lot from very smart, very successful people. And that’s why you may want to know more about our founder’s stress test.

If so, go to axiomcorp.com. Thank you, Joe. That is a great story.

Thank you for sharing that. And it sounds like that owner would have been satisfied with a lot less than 120 million. He just didn’t know that he could get it.

[Speaker 7] (38:20 – 38:34)
Yes. He said if I had not hired an investment banker, I would have taken the 65 million they offered and been very happy. With 120, he was very, very happy.

[Speaker 1] (38:37 – 38:57)
Good. So let me ask then, what is the market like today? You three are in this space.

You see what’s coming across your desk. You know what deals are closing. You know what’s happening.

What is the market looking like right now today? John, I’ll ask you.

[Speaker 6] (38:59 – 41:24)
Sure. We’re all about how markets are trading down in the large public markets, large publicly traded businesses that this town is not dominated by. So when I talk about what our market is, I mean lower middle market.

We help company owners typically between 200 million to 200 million, 300 million enterprise value. So that market is really being fed by lower middle market private equity, which is just bribed with cash. Stale number.

I remember last year I looked it up. There’s about $465 million in dry powder for lower middle market private equity. Dry powder means available equity dollars to spend.

So that isn’t changing. Obviously, huge rate hikes that drip into deal lending. Many of these buyers are leveraged by our funds who need that debt capital to finance their purchases.

An increase in rates of 150 basis points is not going to keep them away. But if you’ve seen just extraordinary behaviors in the market around rates, it could affect buyer demand. You could see a disruption in the BDCs, business development corporations, which everybody in Phoenix knows REITs.

It’s kind of like a corporate equivalent of a REIT, where they are publicly traded lenders who lend a lot to the lower middle market private equity deals. If you see those guys stumble the way they did in 2008, that could affect our market. But for the most part, we see significant demand.

It has not changed at all, despite what you’re reading over the last two months. Our pipeline is great. What we have on our plate is great.

And in terms of peace trading, I think you’ve got the haves and the have-nots right now. Technology doing well, CPG doing well, particularly health and wellness brands, or anybody making that transition right. We’re all changing how we eat.

Anybody benefiting from that is doing particularly well. Some of the old line businesses, businesses tied exclusively to retail, are not doing as well. So it’s very hard to generalize and suggest that everyone is doing great and healthy right now.

But you do see, on average, really nice transaction volumes. But we do analysis for both Arizona and Utah more holistically than other areas. Both of those states had such extraordinary volume for 2021.

It was unbelievable. And in the midst of COVID as well, that’s pretty exciting.

[Speaker 7] (41:28 – 42:38)
I would say the national market for lower mid-market is hot. And I would say in Arizona, it’s white hot. We have one of the best growth markets in the country.

And as John said, depends on the market segment. If you’re in retail, that’s not going to do very well in today’s market. But people that wanted to retire at the beginning of 2020 when COVID came along, and their gross revenue was down 40%, their net profit was down 40%.

The only thing that wasn’t down was their expectation of value. So we told a lot of people, you got to wait until your numbers come back. So I think there’s pent up demand with sellers that waited because of COVID.

And there is a huge capital overhang. There’s lots and lots of money out there. There is more money than there are good deals.

We’re seeing five to 10 offers on every deal we have. And John, that’s probably similar to you, I would guess. So the market is, depending on your market segment, is very hot.

[Speaker 1] (42:38 – 42:40)
And is that driving prices up of the companies?

[Speaker 7] (42:41 – 42:47)
Yes, competition drives prices up. And the more competitors you have, the more the price goes up.

[Speaker 4] (42:49 – 42:52)
I think John wants to correct one number.

[Speaker 6] (42:53 – 42:54)
Mike caught me.

[Speaker 4] (43:06 – 43:10)
That’s a lot of dry powder waiting to buy your business.

[Speaker 1] (43:10 – 43:28)
So that’s where they’re getting the big fat checks from, from the billions that they just mentioned. Mike, why don’t you talk about your work a little bit? How does the seller walk away clean and not have to worry about things that are in that sales contract that might come back to bite them after the sale?

How do you help them do that?

[Speaker 4] (43:30 – 47:22)
One thing that I’m going to try to help on is those reps and warranties in that document. Qualify them so that we’re not saying more nothing there to bite you. You know, if it’s to your knowledge or we’re going to limit it to a knowledge qualifier and things like that on those.

So all those reps and warranties that are in that document, that’s where there’s risk for the seller. There’s also something that we’ve seen, and I don’t know if these guys comment too, but there’s, it was new in the market a decade ago, reps and warranties insurance for the seller. It started out being only for the big deals and then it kept coming down and coming down and the rep and warranty insurance becoming more and more accessible for deals.

And so I would encourage you to consider it. If you really want to walk away and sleep, you know, have a lawyer work over your reps and warranties, but then consider buying some insurance on some things that you might not expect. Post-closing obligations in the document, we really want to limit those.

The indemnification sections of the document, what’s your total cap? And we want to put a cap on it. You know, I will indemnify you for any of the breaches of reps and warranties, but I’m going to, as you’re on the sell side attorney, I’m going to try to put a cap on that.

And then I’m also going to try to put something called a basket, meaning they can’t sue you for $5,000. They have to wait until they have a basket of enough that reaches this number before it’s material. So they’re not bothering you as you’re out there playing golf in Hawaii.

And then we want to talk, Dan made a comment earlier, be happy with whatever you got up front. Well, there’s something called, you know, your upfront money, your cash that these guys are going to try to negotiate to get as much up front as they can. And then there’s often an earn out, a portion that they want to see the business continue to do well for a period.

Some things may be actually, some monies may be held in an escrow where it’s not so much dependent upon hitting milestones, but it’s there for a time to be sure that nothing pops up that was really bad in the business. That’s a differentiating between straight earn out based on milestones and an escrow based type of clause as well. And then if you do have, we’re also going to look at and negotiate for you as the seller.

You may be asked to stay on with the business, work for a period of time. If you want to keep that short, we’ll work at that. And then also there may be a non-compete.

And we’re going to look at how limiting that is in conjunction with what you are planning to do next. And again, one thing, resolve issues now. If there are issues that, you know, keep you up at night, let’s think about, let’s fix those before you go sell the business.

So that’s one way to walk away with a clean forehead. A problem competitor, a supplier, a customer, any litigation lingering, that kind of thing. If there is an earn out, you may want to have enough control or influence of the business residually, even though you sold it to a new seller.

You want enough so that you can influence those numbers, the sales, etc. to hit that earn out in that period afterwards. And that may be a negotiation item as well.

[Speaker 1] (47:23 – 47:24)
Great, thank you. Jim?

[Speaker 7] (47:26 – 48:12)
One thing I would add to that in protection is making sure you have the right team to begin with from the start. You know, we’ll ask a potential client, do you have a good M&A attorney? They go, oh yes, I’ve got a great attorney.

You know, he handled my DWI and both my divorces. And they say, that’s not the right guy to handle this kind of deal. So make sure that you get someone like Mike who knows what they’re talking about, knows what they are doing.

That’s probably the first place to start. Same with an accountant. Same with a financial advisor.

Get your team together way before you start. That’ll help.

[Speaker 1] (48:15 – 48:25)
Jim, I do want to ask you, you said that Breadmaker spent about two years doing what he should do to increase the value of his business. What did he do?

[Speaker 7] (48:26 – 49:33)
Well, talk about financial statements. You know, we knew that this was a public company, and so I explained, most people in the audience will know this, but I’ll give you my explanation. There’s three types of financial statements.

There’s audited, which everybody likes. There’s reviewed, and then there’s cow piled. Now, that’s about what that statement is worth when you’re selling to a public company.

A public company needs to have audited statements. So we got audited statements done. Their accountant thought we were very smart for suggesting that.

Didn’t argue with us a bit. But everything that you would do that your attorney is going to tell you, do you have non-compete agreements with your employees, with your key managers? What kind of supply contracts do you have?

Put yourself in the shoes of a buyer and look at your business through the buyer’s eyes and say, what would I want here? And then do it. And I bet John can add to that.

[Speaker 1] (49:34 – 49:43)
And John, I do want to ask you, you’ve mentioned institutional buyers before. Maybe this is a good time to mention that or bring that in as well. What they’re looking for when they’re buying a company?

[Speaker 6] (49:46 – 52:14)
Sure. Buyers are all the same to the extent they’re trying to minimize risk and get good value. Institutional buyers are a little bit more standardized and perhaps more stringent in some of those demands and needs.

But as Jim said, we call it dressing up the asset every day. You can start now. You don’t have to know when you want to sell.

You can say to yourself, I want to sell in 10 years. You can do a lot of this now. Preparing for sale is a lot.

Just having generally what we call good corporate hygiene. If I ask you to print out your total revenue by customer, how long does it take you to do that? Do you have to go create a spreadsheet or do you go back to your desk and you hit print?

Does the number that it comes up with tie to your CRM? There are things like that that you can be working on now. You have some really critical contracts.

Are they all signed? Because they renew every three years. Did you get the new signed one?

That’s pretty important to you. It’s scary to investors because they think you just lost it if you can’t prove it. Do you have a lawsuit?

Do you have a really fun picture from New Orleans where you’re doing something you shouldn’t? Post it on your Facebook account. Things like that.

You can get rid of those. Settle lawsuits. Resolve that employee dispute, shareholder dispute.

Every company has problems. Every one of them, except yours I’m sure. But if you have any start now and you want to go into market, it’s the marathon analogy of you succeed by trading months in advance, not by what you do that day.

That’s particularly critical with selling your business. You can sell your business with all these problems, right? You just can’t optimize the sale of your business.

It can cost, is it 20%? 40%? If you have those major problems that cause investors to say, I don’t know.

I just don’t like how organized you guys are. I feel like you can’t really articulate solutions to these problems and therefore I still like you, but I’m going to take 20% off, 30% off. I’m not talking about the success of getting a deal done.

Your goal is not to finish the race, okay? Your goal is not to sell your business. It’s to sell optimally, right?

That’s why you bring in folks like us. You can sell your business yourself. The question is, can you optimize that exit?

[Speaker 1] (52:16 – 52:17)
And then Mike, anything to add to that?

[Speaker 4] (52:20 – 54:30)
I would say this just, what best planning for, I’m sorry, to add to that, not in particular, but- So I guess on your end, when you’re drafting documents and negotiations and the deal falls through, some of that is making deals fall through? That’s true. Some of those big surprises can cause deals to fall through.

One thing he commented on, which I think is critical, if you have three or four really important contracts, or one or two that are the contracts for your business, I think it would be worth it for you to look down in those, or have an attorney or have somebody look down for the assignment clauses, or if there’s a clause that says, if ownership and equity in the business changes by more than, let’s say, 30, 40 percent, then let’s say it was Honeywell, then you need Honeywell’s consent to assign this contract, or this contract is not assignable without Intel’s consent, or whatever that happens to be. If that is a key contract, you need to know that as you’re planning on how would I structure this?

Would this be an equity purchase rather than an asset sale? Because probably the last thing you want to do is have to go ask on that sweetheart long-term contract that you have that’s at four percent. You’re buying at four percent, you have to go ask for consent.

Yeah, we’ll consent. Now it’s eight percent on your great contract. That’s some things like that.

Or you may have some licenses, or if you’re in aerospace or another regulated field, you may have some important licenses or federal government contracts that may force the buyer of your business not to do an asset purchase, which they prefer, but to do an equity purchase. That’s one area.

[Speaker 8] (54:30 – 54:44)
Great, thank you. So I’ll ask each for the last 30 seconds here for this panel. John, if you’ve got 30 seconds, if you’ve got a first-time founder out here who’s thinking of selling and you want to give him or her some advice, you’ve got 30 seconds to do it, what would you tell them?

[Speaker 6] (54:46 – 55:27)
Prepare now. Have humility. Look at yourself with a critical eye and say, what can I fix now?

Okay, there’s a lot that you cannot do once you’re in market that you can do now. Find the right team, as everyone said, right? Wealth manager, attorney, banker, CPA.

I don’t want to write that check. I know that’s what you’re thinking. These people are supposed to pay for themselves.

There’s a reason why these industries exist. Bankers, if you’re good, tend to pay for themselves. 5x over.

But mostly what they’re trying to do is take the work off your plate and make sure you’re doing it right. So a lot of it really comes down to planning and positioning.

[Speaker 4] (55:30 – 56:37)
Plan ahead. Get started now. We can give you a due diligence checklist if you want to look at a checklist to look for these things.

But also think about your own tax planning, trust and estate planning. Are you ready? Do you have all this?

What are you going to do with this and your family? Are there ways to deal with that? But then also, I think as in the bread case, the person who got $100 million more than they were thinking, they need an Armando to think about where we’re going to put this.

You are now not diversified because most of your value of your assets is in this business. So once you get the cash out of that, you need to be thinking about diversifying that with some real help. And then I just would say on a personal level, I’ve seen many of my clients over the years sell the business and they had a great idea.

They were going to play golf or something. And then after about six weeks, their wife picked them out and said, go do something else. And now they’re trying to figure out how to buy something else.

So give a little thought to what you’re going to do next.

[Speaker 7] (56:40 – 56:44)
I would just say ditto to what Mike and John said, and I’ll save 25 seconds for later.

[Speaker 1] (56:46 – 57:39)
Great. Well, thank you panel number one. We’re going to move on to panel number two now, and then we’ll have everyone together.

So again, I’ll just remind you who’s at that table. Tyler is someone who is looking to buy companies. He’s looking through a buyer’s lens.

Next to him is John, and John is helping you figure out what those options are and helping you decide how to choose which way to exit and what’s going to be best for you. And then of course, Dan, the founder of China Mist, who has already gone through the process. He had an investment banker on board and now he’s…

I’m not sure what you’re doing now, Dan, but thank you for being here. So let me get to some questions here. John, this is a question for you.

It’s been said there are 50 ways to lead your lover. How many ways are there to exit your business?

[Speaker 2] (57:39 – 59:59)
Yeah, good question. There really are seven fundamental ways you can get out of your business. There are variations of each, depending on financing or not and other issues, but you can wind it down.

You can keep it and just cash flow it and get out of operations, or maybe you just want to take some chips off the table and get rid of some risk so you can recapitalize, or you can do a generational transfer to family or transfer internal to management. You can do a third-party sale, as we’ve been talking about, or you can do some version of an ESOP. And those are the seven fundamental ways you can really lead your business.

And I think one of the things that we see a lot in our practice is, tragically, owners many times don’t understand all their options and really go down the path where they’re making the best choices because of that. It’s really funny, but I mean, if we were going to go, any of us in this room, we’re going to go spend 50 or 60 grand on a new pickup truck and you had a buddy that said, hey, go buy a Chevy, man, they’re the best. I mean, but would any of us just go out and buy a Chevy?

We would go look at the Dodges and the Fords and the other offerings, but unfortunately it happens every day with people selling their businesses where they go down one path and don’t understand all their options and sometimes they regret it and it’s just not the best choice for them. So it’s very important to us that we come to them in a very agnostic way and make sure they understand all of the options they have. And our lens, we all at the table have a different lens we look through.

Our lens is all about achieving seller outcomes with that operating business asset. You’ve talked about how much of your life you trade to build a business and at the end it really doesn’t make sense to do anything but understand all your options, have your goals very, very clear in your mind about what you’re trying to achieve in terms of outcomes for yourself, your family, and not only you and your family, but other people who are in your business who you really love and care about, whose lives will be affected by your exit choices.

Understand what’s important to them as foundational elements to planning that exit, analyzing those options, and figuring out which way should I go with this asset to achieve these outcomes that are so important to me.

[Speaker 1] (1:00:00 – 1:00:10)
Thank you, John. So Tyler, let me ask you a question. We haven’t heard from you yet, but you’re on the buyer side.

You look at- I’m your shopper, yeah. We’ll give you a card.

[Speaker 5] (1:00:11 – 1:00:14)
Do you see a red bow on them right now?

[Speaker 1] (1:00:14 – 1:00:14)
Yeah.

[Speaker 5] (1:00:15 – 1:00:17)
They’re taking investments, so that’s probably the best chance.

[Speaker 1] (1:00:17 – 1:00:40)
So Tyler, when you’re looking at a company, is there some things that you see that immediately kill it in your eyes that you want nothing to do with them? And some you see and you think, wow, this looks really great. As you’re evaluating from the buyer’s perspective that company, what are those things that you’re looking at, looking for?

What is attractive to you? What is scary for you? Sure.

[Speaker 5] (1:00:40 – 1:03:09)
This is going to be different for each buyer, so maybe I’ll just give you all context. My background, about a decade in financial services. I’ve been in the past five years at Pivotal Group.

I joined on the private equity team, and now I lead both private equity and venture capital. So the smallest businesses for us are maybe around 50 million revenue. My largest portfolio company just did over a billion last year.

So we have a wide range of things that we look at, and I think universally there’s always things that are going to be a challenge. That’s going to be anything that would be a binary outcome or a risk. The job of a buyer, and really taking a step back, the difference between what an entrepreneur does and what an investor does, at least in my view.

Entrepreneurs tend to be oriented around cash flow. How do we increase cash flow? How do we get cash flow?

How do we get cash? The difference, and it’s not usually exclusive or the opposite, but it’s not the same, investors think about value. And that could be very, very different than what drives cash flow, certainly today, tomorrow, in the years to come.

And that can drive a lot of different behavior. And one great example to get to something that would be risk, looked at a business recently, and we actually just put an offer in, but 80% of its revenue is with one customer. And that makes great sense as the entrepreneur, because they have a wonderful relationship, they make a ton of money on it, and it helps pay for the infrastructure to do all kinds of other things and provide a great lifestyle.

As the investor, it has very, very little value, and almost none from that revenue standpoint, because it’s not necessarily repeatable, it’s a huge risk to the business. But other things that would go in the category, anything that is binary, if this happens, someone wins an election, or a law is passed, or those kinds of risks, people generally don’t like. A big issue that we run into a lot is someone decides that they’re now in a retirement age and wants to sell their business.

They tend to hire folks similar to their age or maybe a few years younger who are also going towards retirement, which doesn’t exactly leave a lot of people to run the business. And if I was any good at running a business, I wouldn’t be doing this. So that’s probably our biggest challenges.

And then the things that get us excited, I think universally people are excited when you do something that adds value to multiple constituents, when you have recurring or reoccurring revenue, something I can predict and I don’t have to work on to keep realizing, and always the higher the margin is always more attractive. We probably talk about other elements as well, things like ESG, when I mention constituents, if you do things that also help the environment or help improve social causes or equity in the country, there’s all kinds of pools of capital that you can access that make your business more of a synergy opportunity for somebody that you call.

[Speaker 1] (1:03:13 – 1:03:28)
So Dan, you’ve heard an attorney speaking and two investment bankers and a private equity purchaser and exit planner. Having gone through all this, what thoughts would you like to share that come to mind?

[Speaker 3] (1:03:28 – 1:04:20)
So I just made a few notes while this was going on. First of all, I was in the most low-tech business you could get. I was in the tea business, right?

That product hasn’t changed for 3,000 years. I paid more in intellectual property attorney fees than I did the rest of my attorney fees put together because you just have to protect trademarks. Some of you older guys in the audience still remember Monty Python.

I owned the trademark to T-shirts, T-E-A shirts. They were selling them on the internet. We made Monty Python quit selling T-shirts.

We tried to get them to license it, but they wouldn’t go for it. One of the other things I heard, and I know it’s in the back of everybody’s mind, an investment banker has to be costing me money. Well, I think you said they pay, what, 5x?

[Speaker 6] (1:04:20 – 1:04:21)
They sure should.

[Speaker 3] (1:04:21 – 1:08:29)
They don’t always. They sure should. But in our particular circumstance, they made one little tweak that we had never even thought of that more than paid for their salary.

So that was well, well worthwhile. Armando, you were talking earlier about people wanting to do charitable giving and things like that. I met Armando when we were both on a non-profit board together, Friends of Public Radio Arizona.

That’s how you meet people. I met Mike through Global Ties Arizona. So being out in the community is where you meet a lot of these people.

I think that’s very important. There was also a mention earlier about earnouts. There was an earnout part of our sale, and we sold to a public company.

I sold to Farmer Brothers Coffee. There was an earnout part. We never paid any attention to that because we realized that once the sale closed, we would have zero impact on whether or not we could hit that earnout.

So we didn’t even count that as part of the sales price. We also have long non-compete, which I was willing to give them to trade off for some other things. I gave them a five-year non-compete because I never thought I’d go back in the tea business.

My non-compete ended up six months ago. I think I’m about to get back in the tea business. I’ve had three people contact me in the last month wanting me to do tea for them.

But this is something nobody touched on. We sold our company five years ago. Shortly after that, they fired the CEO who bought our company because he overpaid for it.

I’d be the first to admit that. After they fired him, that was a couple of years later, I emailed the CEO and said, just an uninterested observer of your company, let me tell you what I saw wrong with the company from somebody who sold a business to him. The CEO called me up afterwards.

He was a former CEO of Pete’s Coffee out in San Francisco. We’d never met each other. We knew a million people in common.

The end of the conversation was, Dan, when we bought China Mist, we thought we could pivot our company. Not going to happen. You want to buy it back?

So I was that close to buying it back for 40 cents on the dollar. We were going to close December 27th of 2019. At the last minute, their attorney called up and said, we hired a new CEO.

We want to give them 90 days before we close to get their feet wet. I said, okay. 90 days later, COVID hit.

95% of our sales were to restaurants and hotels. They went from selling millions of dollars of tea a month to $28,000. Now, I also have to point out my wife was opposed to me buying it back.

So I will never hear the end of this. But I can strengthen everything that these people say. Get your records in order early.

Keep good records. You know, those customer contracts, boy, Farmer Brothers went through those with a fine tooth comb. They will go through everything.

So just make sure you have all of that. But there was also a conference like this. It was written up in last week’s Business Journal.

I hope I don’t hurt anybody’s feelings up here. But one kind of cute thing came out of it. One of the panelists was saying that somebody asked him the difference between a strategic buyer and private equity.

And he said, a strategic buyer is somebody who comes in and they love you. They love what you do. They think they can leverage it with their customers.

And it’s valuable to them. A private equity person comes in and says, why would anybody pay you anything for what you do? And you have to prove it to them all over again.

So you end up with the same point. But it’s just a different path you take to get there.

[Speaker 1] (1:08:31 – 1:08:51)
Thank you, Dan. So John, as you are working with people and helping them understand the options, it seems like you would really have to know what they’re trying to get to. How do you help them?

And sometimes they might not know. How do you help them understand and really evaluate those options so they end up in the right place?

[Speaker 2] (1:08:51 – 1:10:21)
It’s a really good question, Armando. I don’t know that there’s a cookie cutter answer for it. I can just tell you that 14 years and 150 plus family groups are doing what we’re doing and honing our processing.

This is all we do. We don’t, as you know, manage money or sell anything. We just help people around exit to get the outcomes they want with that asset.

You just learn to, in the beginning of our process, which is a very deep discovery process with the sellers, that’s a huge focus of it, is to really drill down on what do they want in life going forward post-business, because that business was a huge part of their lives. It provided them an incredible amount of not just money, but satisfaction and reward other than money. And if they don’t understand what they’re going to replace those things that are important to life with, then that’s the reason for the poor statistics that we’ve heard about people post-sale, which they hadn’t sold.

So we just have a process of taking them through some questions and not taking surface answers and drilling down and really challenging them on those goals, playing one against the other, and say, what if you can’t get both? Which one will win? And help them really go through a mental process to clarify in their own minds, okay, and you can see the light go off when they finally get it and they’re convicted to it, rather than just kind of throw stuff out there that’s logical and makes sense.

So it’s just a process honed over the years to help them really figure out those drivers that are going to influence and drive their decision making.

[Speaker 1] (1:10:23 – 1:10:49)
Okay, thank you. And then, Tyler, a question for you. It seems like you’d be It seems like I’m evil according to Dan.

He said it with love. So it seems like you’re competing with other buyers to buy the same company sometimes. Why are they choosing you versus the other company?

What is that?

[Speaker 5] (1:10:50 – 1:14:04)
Sure, well, I think first, maybe I view the value of Jim and John to be different than what they said. I think it’s relatively obvious and easy to measure if you get a higher sales price, and you have to pay them a percentage of the overall transaction that they got you a bigger fee or bigger cash upfront or a bigger overall value. Makes a lot of sense.

The value that I think people fail to realize by creating competition by getting you ready is that the deal actually closes. So what happened last year is, as everyone realized that rates are going to be coming up, that there might be a tax change, everyone decided to sell anything that wasn’t nailed to the ground. Volumes went through the roof.

You couldn’t hire an attorney, a QOV expert, an analyst to do anything to save your life. The result was the throughput of deals dropped from maybe a 50-50 type ratio to less than 10% for a brief period of time. And you see the throughput of term sheets and everything else just plummeting.

And there’s a real cost to an entrepreneur, to the family, to the management team, of the distraction of even thinking through these things. The actual nominal cost to engage these folks is immaterial in the grand scheme of things, but there’s a true distraction element. And then if it takes six months of work and diligence and meetings and reviewing documents only to not close, I think that can be really, really difficult for people.

And that is the risk that you run by not having this kind of dynamic. But at this point I completely forgot what the question was, in terms of different types of buyers. So on the financial side, I would bifurcate what we do in private equity, and I’m here to absolutely preach private equity.

There’s two types. The historical type, which I belong to, which is very entrepreneurial. I work for Francis Najafi.

Our check size is anywhere from $5 million to maybe $250 million or more with certain partners. We’re able to do that from a balance sheet. There’s three of us on investment committee.

It’s very direct. And our approach doesn’t have a time mechanism. We don’t have to sell a business at any particular time.

We’re very long-term oriented. We look at the world through changes in technology, demographic, and psychographics versus buying a business in 5 to 15 and even top. So that’s a very different thought process and approach from what has become the financial services side of private equity.

They do great work. They build incredible businesses. But to John’s point, when I first looked at joining this industry, there was maybe $150 to $200 billion a year worth of transactions in my profession.

That started getting to north of $500 billion last year. And the total overhang, I think that’s just the private equity overhang, but the total capital overhang is I think $1.5 trillion at the start of the year, which is 10 times of the total value when I first joined the industry. It’s kind of crazy to think about.

But that side of it, you recruit from banks. They work like financial firms. It’s a very different kind of process and they will often pay the most.

Strategics are always attractive, but they’re hard to come by. Private equity has to compete with that because the only way a professional manager makes money is to actually invest in your business. So there’s a huge incentive for them to deploy the capital, but your business has to be picture perfect.

You have to go through all of the planning elements, all of the process improvements, all of the documentation. It’d be like trying to sell a car on the internet, but you have to have a receipt for every time you change to rotate the tires. The level of detail is very, very important, but that’s one of the ways you can maximize value.

[Speaker 3] (1:14:08 – 1:14:15)
So I’m the good brand advocate, I was going to tell you. No, they all end up at the same place. It’s just a different path you go through to get to it, right?

[Speaker 1] (1:14:16 – 1:14:36)
So Dan, a question back to you. You sold, of course, and you went through an investment banker. You sold to a public company.

John mentioned lots of ways that you could exit a company. Did you only look at going through that sale or were there other choices, other options that you looked at before you decided to engage the investment banker itself?

[Speaker 3] (1:14:37 – 1:15:19)
I mean, early on, we wanted to go public and we realized we weren’t nearly the size to go public. Way, way, way, way too small for that. We just very briefly toyed with employee stock option plan, but we just really didn’t have the employees that we thought would be able to be successful taking it over long term.

So really selling it was by far the best way for us to go. But we explored a lot of different things. You know, you have a lot of time where you sit around and have a glass of tea or a glass of wine and you talk about what ifs and you have to play around with those things.

But I don’t think there’s any one size that fits everybody.

[Speaker 1] (1:15:19 – 1:15:34)
Okay, thank you. So John, a question for you. When you’re going through your process, what are some of the aha moments that the founder has that they just never thought of?

They didn’t even know was there until you made it obvious to them and you pointed out.

[Speaker 2] (1:15:34 – 1:21:37)
That’s a really good question. And there are a lot of them. I would say the first one is in the area of your first question, their options.

They don’t realize how an ESOP may serve multiple outcomes that they’re trying to achieve, not only for themselves and their family, but for the employees who are key to the business that are probably very close with maybe even family members who will remain with the business and how that tool can be applied to achieve the outcomes they’re looking for for the people that are important to them. So a lot of a lot of aha moments around those options. They didn’t realize, wow, my management might be able to buy this business from me even though they don’t have the money.

I had no idea. So they never considered that option. They didn’t realize that, wow, maybe I did just begin to hate operations and I don’t mind owning it and wanting the cash flow from it, but I just had to get out of the daily grind and I could hire a hired gun like Gerhardt back there in his cohort and help people run the business successfully, just remaining in a strategic and a visionary role, which they love.

That option maybe didn’t occur to them. Maybe they didn’t realize that what they really truly wanted was just to get rid of some risk and there are multiple ways to recapitalize the business and take a bunch of chips off the table and keep doing what they love without feeling that risk every day because they have all those things in that one basket and they just don’t know how it’s going to turn out, you know, that sort of thing. So a lot of aha moments around the options in the beginning and then I think the second area is around complexity.

You know, owners, as people have talked about here on the panel, they’re all focused on money and finance and profitability and revenues and so forth and they’re grinding away at growth and how great this business and that’s their focus. They don’t understand that when the lens turns to exit and what do I need to do with this asset going forward in the last phase of it to really accomplish the outcomes I’m trying to achieve, it’s ultra complex, it’s multidisciplinary. Obviously we’ve talked about legal, we’ve talked about tax, we’ve talked about investment banking strategies, about the enemy, no I’m kidding, and all the complexity around how to get what you want and need and deserve out of this asset you have traded a huge chunk of your life for and so the complexity kind of blows them away and along with that the lead, the runway, the lead time required.

Everybody on this panel has talked about waking up late in the game and how detrimental it is to getting best outcomes and I believe that the truth of the matter is that the sooner you truly understand what it takes to get exit right, it will change the way you operate your business on a daily basis starting tomorrow because the things you need to do that everyone has been talking about to improve your business, to maximize its transferable value, to get it to do what you need it to do to serve the outcomes you’re shooting for, the longer the runway you have to achieve those things, the more options will be available to you to do those things, the more powerful those options will be and the less disruptive it will be to operating your business and achieving your business plan.

The longer you wait, the more challenging it gets, the more distracting it gets and it just all starts to go the wrong way. So that lead time required to deal with the complexity of getting exit right is always a wake-up call and once they understand that, you know darn well how important it is to them and if they understood it before, they would have been doing something by now. So that’s always a big aha moment and then the last big one we see a lot is around relational things.

I think one of the unique things of our process that we’ve developed over the years is to include not just the financial and operational issues around the business that need to be looked at and understood and improved relative to exit, but the people and personal and personnel issues, whether it be family or just normal relationship stuff in the business that is not the best that it could be and understanding how the people that are involved in their business who are important to them, that they love and care about and been with them for a long time and will remain with the business after the transition and how those relational issues really impact decision making. We all think the money and the number and all that and it’s obviously far up on the list, but actually seldom is it the top thing on the list.

They’re more interested in how the consequences of their decisions will impact the people they love, including themselves and their family and the other people they care about that I call chosen family, maybe not blood family, but chosen family who are attached to their business. So those relational issues are absolutely foundational to developing good exit planning going forward and until you understand them you’re really putting your plan, your process, your outcomes at risk because eventually those will probably emerge and derail your process and I think the investment bankers and mine can certainly speak to the fact that sometimes when those things pop up late in the game they ruin the deal and the statistics are rotten around exit. We know the statistics and they’re really tragic. So for us it’s very important not just to be agnostic about options and make sure that they’re all understood before any decisions are being asked to be made about direction and so forth and then about starting as soon as possible and then about really including the people in the process and giving them a voice so they really understand what’s important to them, those people that will influence your decision making and include that as foundational elements to the planning you put in place.

[Speaker 1] (1:21:38 – 1:21:40)
All right, thank you. Dan, you want to add something to that?

[Speaker 3] (1:21:40 – 1:22:21)
Yeah, just something that came up earlier which goes back to the value of Mike and the investment bankers. There’s no way that you can sell your company and run your business at the same time. There aren’t enough hours in the day.

These guys put four people on every project, right? If you focus and you’re doing it all yourself, if you focus on selling your business, your business is going to go to hell in the meantime. So you really, whatever you pay these people is well worth it because it’s an either or.

You can’t do both of them. There’s just not enough time in the day. Right.

[Speaker 2] (1:22:21 – 1:23:11)
I’ll add one quick thing. I think everybody’s mentioned process, process, process. There is a process to taking an asset like an operating business and getting outcomes intentionally out of it and I could not agree more with what Dan just said.

Everybody knows how busy a business owner is just trying to achieve the business plan and exit and all of the things that you need to do if you only have a year to get them done. It’s a bigger load. So not that they can’t be done, but you do need to work with the team who does it every day, who can do all that heavy lifting for you, who can bring you into that process for meetings of 30, 45, or 60 minutes to either educate, to discuss, or to make decisions so you can go back to doing what you do so well, running your business on a daily basis.

[Speaker 1] (1:23:11 – 1:23:39)
Thank you. I need to defend Tyler a little bit. Now, Tyler, when I was putting the panel together, I thought, do we really want to invite private equity to the table?

But when you and I had a conversation, you completely changed my mind. And part of what you said is that you’re really, you’re different from most private equity firms. You’re not buying to then turn things over and resell in three years.

That’s not your goal. Your goal is different. Could you speak to how you are different as a private equity firm?

[Speaker 5] (1:23:40 – 1:26:23)
Sure. I think even maybe starting personally. So my approach is very much just to help first.

And over time, it’s amazing how productive that could be in terms of when you need a CFO to help join a business or a board member, maybe someone in the audience who can help me advise them through certain things. I think that’s also core to how we approach it. Since we have permanent capital, there’s not necessarily a need or desire to flip a business in a period of time.

And everything that we do comes from a place of alignment of interest economically with the team and the founders and all the people involved, but also vision in terms of what you want your business to be and ultimately a strategy. And the result of that is we do hopefully one deal a year versus other shops that are going to do 5, 10, 15, 20. And they’re just very different approaches.

I wouldn’t say one is necessarily wrong or right, but we tend to be a fit for people who need a flexible partner going forward. And oftentimes that could be a minority interest, could be a majority interest. A lot of the challenges that people have going to one of your prior questions is family in the business.

And how do you manage that? They may or may not want to take over the business. They may or may not be ready to take over the business.

Or you may want to have a partner and have a liquidity event, but also would like your children to be able to realize their dreams of building out whatever division they’re in charge of. And those are very complex things to try and balance. But I think the universal message I want to send to them is get ready.

And my analogy is agreeing to go skydiving. You don’t start thinking about the parachute after you jump. But the organic way that this tends to happen for folks is you’re running a business minding, you know, their daily lives.

And then all of a sudden you grab drinks with someone like me and you’re like, well, he said it was worth this. That’s a lot of money. Maybe we should talk.

And all of a sudden you’ve jumped out of the plane. The more events you can strap yourself to someone who’s done this before, just like skydiving, the human natural instinct isn’t to be calm, count, think through the process and pull the ripcord. So they strap you to somebody who does, right?

I think that earlier that you do that to with the folks on, not in the literal sense, don’t insult anyone, but in a corporate sense to help be aligned with what’s actually getting you to where you want to go. The other advice I would have, having gone through it personally from my family selling the business earlier this year, is it’s not a bad idea that in conjunction of getting all of your corporate advisors in line and your personal financial advisors in line, but also whether it’s a therapist or anyone else, it’s amazing the family dynamics that come out as people start thinking through the reality of, I’m sure everyone in this room is here because they were ambitious at some point and this is something they’re proud of. And those things start to rear their head as you think through what you really want and what you really want to do and how it affects people around you in ways you may or may not have otherwise realized.

[Speaker 1] (1:26:24 – 1:26:48)
Good. Thank you, Tyler. So, John, there are about half a dozen father-son, father-daughter combos in the room here.

And some have fully transitioned to where son is now fully in charge of that company and it’s been successful. Others are just getting started. Others are planning.

Others are somewhere along the way. How would your process help them as they’re going through that to navigate?

[Speaker 2] (1:26:48 – 1:30:17)
Man, that’s a great question. So, of the 150 plus or so family groups we’ve helped over the years, about 60 percent of them have been family transfers, internal buyouts, generational transfers, and so forth. They are, the relational issues in those are a mountain compared to a molehill many times of businesses where a family isn’t involved and they are extremely challenging.

And you just have to be very real. You have to have a certain kind of relationship, I think, to get through that successfully. You need to be able to throw things on the table that are difficult and talk through them and make good decisions with the proper kind of feedback and analysis and so forth.

And part of what we’ve done to try to help with those issues, which we’ve been really successful at, is to develop some proprietary modeling technology where we put the business financials in there and personal financials as well. No one gets to see anybody else’s, of course, but it’s all numerically integrated and we can turn knobs on the business and watch the needles on everyone’s personal financials and how they’re impacted by a potential decision. What if this family buyout occurs?

This sibling buys out that one. What if the business takes on nine million dollars of leverage to be able to achieve these family buyouts and that will create harmony going forward with the business. And we can model all those things and upside and downside and all the information that entrepreneurs need to really make confident, comfortable decisions.

I mean, these people manage risk every day. It’s what we do as entrepreneurs and they don’t want to be sold some rosy picture through a transactional process and think life’s going to be perfect after that. It’s just not going to work.

And so unless you can help them truly understand the ripple effects of their decisions and the unintended consequences of the decisions you’re asking them to make, particularly around family, and then be able to analyze best of times and worst of times and really give them a full set of information to understand those consequences on the people, it really is difficult to get over those things. And I think Mike and other attorneys and other types of professionals who try to help around generational transfers can attest to the fact that the success rate is not very good because eventually those relational issues don’t get resolved and progress can’t be made and loggerheads are established and the process fails. So as far as our process and our tools, it’s all about outcomes and making excellent decisions and giving them the information they need to be able to do that.

And then it really helps accommodate everybody understanding that, hey, this business is the goose laying the golden eggs that we are all going to benefit from. We’re all on this same ship. If the ship goes down, we’re all going down.

So let’s figure out how to preserve the business and the cash flow from it for all of us and get these decisions made well to get everybody the outcomes they’re looking for. And it’s just a hard thing you’ve got to dive into with the proper kind of relationship with the right types of people who are willing to do that. And you can get through that stuff.

But it’s tough. It’s always tough.

[Speaker 1] (1:30:19 – 1:30:21)
Yeah, good. Thank you. Dan, any thoughts on that?

[Speaker 3] (1:30:23 – 1:31:12)
No, I really agree with that. My sister and her husband had a company and they had one relative running it and then they brought in another relative and the first relative didn’t measure up and so they had to replace him with the other one and then they sold the company and the one who came in to run it, by the way, sold to private equity and made a killing. Stayed with it for five years, sold to private equity again.

That nephew’s worth more than the rest of us put together now and he’s still with the company. But there were residual hard feelings in the family with their relationship with one of the siblings is not what it used to be. But, you know, sometimes you just have to make those tough decisions.

They used a therapist. They talked with everybody. But, you know, sometimes it’s tough.

[Speaker 2] (1:31:13 – 1:31:58)
Yeah, it is. It’s always tough. And I think when you can get through that stuff, though, it’s so satisfying to create those impacts on that family.

And I mean, I think many times Gen 1 wants Gen 2 to have it. Gen 2 may have other ideas, may be capable, may not be capable. If they’re interested and they’re not capable, they need some professional growth curriculum to build them into the executives or players they need to be so the business goes on successfully.

That takes time, often years. So once you understand all the issues that are required to make a family transfer successful, it has a lot better chance of getting there. And that’s, again, why Runway is so important.

[Speaker 3] (1:32:01 – 1:32:04)
We’ve all seen the rags to riches to rags scenario, right?

[Speaker 2] (1:32:04 – 1:33:25)
The statistics are absolutely abysmal when it comes to family transfers. I mean, Gen 1 to Gen 2, 70% failure rate. To Gen 3, 88% failure rate.

3% make it through the third transition. And to me, those are some of the most tragic statistics out there because it’s not like a sale that just got them less than they could have gotten. Many times those businesses go down and they just go away when they could have created generational wealth for a very long time.

And also with generational transfers, they’re challenging financially as well because if mom and dad started it and they had four kids, and now you want the business to support four families instead of one, and then the third generation has two kids each and now there are eight or 16 or 20 or whatever the number is, if the business revenues, profits don’t grow as fast or faster than the family, then it’s not going to be able to support it. And so part of our early work in a generational transfer is when we model that business and we make projections, we can be realistic and say, is the business, does it have the capacity to do what the owners would like it to do?

And better to figure that out now and come up with plan B before we’re halfway down that road than to get down the road and go, oh geez, now what are we going to do?

[Speaker 5] (1:33:26 – 1:33:31)
And what’s fair for the other kids, right? Not every kid’s going to work in the business and it’s not fair for those who do.

[Speaker 2] (1:33:32 – 1:34:28)
And comprehensive exit succession planning almost always requires realignment of the estate planning because much of estate planning is premature death oriented and we’re planning for them to live a long time and get a huge chunk of money out of this business and if that’s not what the planning was designed for in the first place, it almost always has to be realigned. And the issues Tyler mentions about what is the definition of fair for these kids who are inactive and don’t want any part of the business versus these that have helped grow it and build it and how do you figure out those fairness definitions and do what’s most appropriate for each person. I mean if you’re not active in the business and you don’t have control over it, you want a bunch of equity in there, just being a minority shareholder, you might rather have the money to apply to your family right now and have other assets that are more liquid or whatever.

[Speaker 1] (1:34:28 – 1:35:00)
And that gets to the point earlier of having the whole team talking together so that everyone’s working with an overarching strategy for the benefit of the business for the family so that it’s the best outcome possible. So we need about to wrap it up here. So in 30 seconds or less, if I can just ask Tyler, what would your last 30 seconds of advice be for these founders of businesses who are thinking at some point, realizing at some point with the eventuality they will need to exit their business?

[Speaker 5] (1:35:02 – 1:35:46)
So I’m from Arizona, I love Arizona, but the number one failure I see is this with most local businesses and most businesses just overall. If the owner cannot be separated from the business, the business doesn’t really have value. The business is just an extension of the owner.

And that tends to be at the core of the failure of most processes, of most scaling of a business. And it happens in actual sizes, 1 million, 5 million, 10, 50, 100. But that’s probably the biggest issue to work on, is how does your business work without you?

Not that you don’t add value. I mean, you understanding the language of your customers, you driving strategy value relationships, all these things are valuable. But in order for someone like me or a strategic anyone else to see value in it, it has to work without me.

[Speaker 2] (1:35:49 – 1:36:43)
My 30 seconds would be to first commend all of you who are in this room, because the biggest thing is education about exit. The best time to educate yourself about exit, if you haven’t done it already, is now. Because it will change the way you operate your business on a daily basis going forward to optimize that exit.

So that would be the first thing. The second thing I would say is absolutely positively understand all your options before you go down any one path and get invested in that path in time, energy, money, distraction, whatever. It’s just extremely important to make great decisions at the end, after decades of work.

And the way to do it is first of all to educate yourself so you know what it takes and then get a plan together going forward and starting right away, even if exit’s 10 years down the road.

[Speaker 3] (1:36:45 – 1:37:12)
And I want to second what Tyler was saying. I always wanted a business that if I stepped in front of a bus and got run over that the business would continue going, because if you can’t be replaced, to me it’s not a real business. You know, it’s a great income stream, it’s a great living, but it’s not a business that has value to other people.

So I would look down the road and say, how do I replace myself so it can keep going?

[Speaker 5] (1:37:13 – 1:37:26)
Well that’s actually probably the most, one of the most impressive things I think Dan did was identify someone quickly that he could delegate to and was willing to start doing that. Because it takes time to build up that trust and for the person you’re delegating to, to build up the confidence and the confidence as well.

[Speaker 3] (1:37:26 – 1:37:31)
I might have just been lazy Tyler. I’m a big fan, big big fan either way.

[Speaker 1] (1:37:33 – 1:42:15)
So let’s just recap a little bit here. As you can see, we probably go on for a long time, but let me just recap a few things that we have heard up at this point. We’ve had on my immediate left here a couple of investment bankers, intermediaries.

Their job is to represent you and your business, take that through their process, and then take that to an auction process to get bidders to bid up the value of your company and the price. And that’s what both John and Jim over here, that’s their roles, that’s what you heard from them. In the middle there, Mike, as the attorney, his role is to protect you and look at those reps and warranties in the contract so that when it’s all done, you’re in the best position possible.

And when you sign on that dotted line, they aren’t going to come back for you for something that maybe happened after you sold the business. So Mike is there as your advocate to protect you in that sales contract and help give you advice and guidance as you go through that process. Tyler on the other table, the private equity person, he’s on the other end of the fence, but he’s looking to buy.

And as he said, you’ve got to be in perfect condition to be in a certain category. And perfect meaning the financials have to be there, the people, the contracts, all that has to be nice and neat and perfect in order to fit in a certain category. But as a private equity firm and him as a potential buyer, he’s evaluating your companies to see, as Dan said, if you get hit by a bus, is your company still going to function the next day?

So that’s part of his perspective. John next to Tyler mentioned to you that there are many ways to exit your company, not just one, but many ways to exit your company. And the way that makes the most sense for you really depends on you and what objectives you are trying to get to.

And so his role is to help you understand what those exit options are and to help you navigate that so that in the end of the day, you’ve really made the right decision and you feel good about it once it’s all done. And we also heard from Dan, whose tea you have on your table, China Mist Tea. After 30 something years, he and his partner decided to sell that company, which they successfully did.

He’s mentioned some things along the way about the investment banker that he thought was well worth his money. As Dan said, the investment banker made one little tweak and it paid for himself. So whatever that tweak was, it was valuable to the seller of that business, to the founder.

So it was also said up here that trying to sell your business and trying to run it at the same time, that probably isn’t the best idea. If your business requires all of your time, all your devotion, and now you’re trying to sell it as well. No, I think it was Dan who said that these guys, the investment bankers are going to put four guys on your company to help get that company ready for sale and to get it to market.

So it’s a big task. And John mentioned before as well, maybe not here, but previously to me, that when you are coming to exit your company, that if you approach it as a project, it’s much more than that. It may take years to really prepare your business for sale to get the maximum value.

And if you spent 20, 30 years to build the value of that business, it’s probably in your family’s best interest to really take that extra step, six months, a year, two or three, to increase that value because that will help you get to where you want to be and where you want to get to with your family. So as you can see, there’s a lot here, a lot of expertise up on the panel, and we could certainly go a lot longer, which is why I mentioned earlier, we’ll be having more of these going forward because there’s a lot. And if you’re interested, I did an hour-long recorded Zoom interview with both John Farr, with Jim Affinovich, with Mike Patterson, and with John Ciancio.

As we wrap up the Scottsdale Founders Forum, I’m going to ask you to just imagine. Imagine it’s the day after you sold your business, and you’re waking up that very first day, and you feel fantastic. And the reason you feel fantastic is because you listened, and you heard, and you implemented some of the ideas and concepts that you heard from the panelists today.

And when you signed that sales contract, you knew the buyer was not going to come after you if the business went under that next day. You no longer have payroll issues, cash flow, budgeting, leases, contracts. You have none of that. It’s done. And you got full value out of your company, and then sell, because you took your time, you planned well in advance, and you took all those appropriate steps. So when you signed and you woke up next day, life was good. That’s what is possible when you implement your thought, ideas and concepts that is today from panelists.

Right. Hope you enjoyed this episode of the Founder’s Guidepost. Whether exit is on your immediate horizon or maybe 10 years down the road, there’s something here for you.

Wondering if you’ve missed anything in your planning? Schedule your 30-minute founder’s strategy call at axiomcorp.com. And congratulations on your business success.

You are the American success story.