00:06

Okay. Friends,

Okay. Friends,

00:07

family, people who like pink pop tarts, Welcome. This is another master class. My first master class was on raising money. It was about how to get create a killer pitch deck. That's the start of your journey. If you're an entrepreneur, you're trying to go raise money from investors to, to fund the company. This is now at the end of the company. How do you sell a company. And, Ben asked me to do a a master class. He's like, hey. Can you do a ma can you record a master class today? Your boy's lazy. So I'm repurposing a presentation I gave.

family, people who like pink pop tarts, Welcome. This is another master class. My first master class was on raising money. It was about how to get create a killer pitch deck. That's the start of your journey. If you're an entrepreneur, you're trying to go raise money from investors to, to fund the company. This is now at the end of the company. How do you sell a company. And, Ben asked me to do a a master class. He's like, hey. Can you do a ma can you record a master class today? Your boy's lazy. So I'm repurposing a presentation I gave.

00:36

Three, four years ago at hustle Fund. I went on Google Drive. I found an old presentation actually didn't even look through it. I'm just gonna do it live here, sort of in Prop style. But I remember. I remember being on stage and giving this talk about how to sell a company because I had just sold my first company. And I remember at the time being like,

Three, four years ago at hustle Fund. I went on Google Drive. I found an old presentation actually didn't even look through it. I'm just gonna do it live here, sort of in Prop style. But I remember. I remember being on stage and giving this talk about how to sell a company because I had just sold my first company. And I remember at the time being like,

00:53

I wish there was some more content about this because if you wanna learn how to manage people, you're gonna there's tons of book and you're gonna get practice every day. If you wanna learn how to grow revenue or sales, there's tons of books and you get practice every single day. When it comes to selling a company, There's very little content out there that that I thought was any good. And you get very few reps. You might sell a company once every four years, ten years. It's it's not a common thing that you do. And so,

I wish there was some more content about this because if you wanna learn how to manage people, you're gonna there's tons of book and you're gonna get practice every day. If you wanna learn how to grow revenue or sales, there's tons of books and you get practice every single day. When it comes to selling a company, There's very little content out there that that I thought was any good. And you get very few reps. You might sell a company once every four years, ten years. It's it's not a common thing that you do. And so,

01:19

we're not, you know, if you don't practice, you're not very good at anything. So

we're not, you know, if you don't practice, you're not very good at anything. So

01:22

I learned something,

I learned something,

01:24

some things during the process of selling my companies, I'm gonna share them with you today.

some things during the process of selling my companies, I'm gonna share them with you today.

01:29

So let's see what I was thinking four years ago. The only thing I did was I removed the banner at the bottom, and I put a new logo there because it said Healthicon twenty nineteen. I thought that would not look so great. So,

So let's see what I was thinking four years ago. The only thing I did was I removed the banner at the bottom, and I put a new logo there because it said Healthicon twenty nineteen. I thought that would not look so great. So,

01:40

let's jump in and

let's jump in and

01:41

hit the first slide.

hit the first slide.

01:43

Here we go.

Here we go.

01:45

Okay. Hey. That's me.

Okay. Hey. That's me.

01:48

Look a little different nowadays. Not too different. Here we go. I still got the headphones.

Look a little different nowadays. Not too different. Here we go. I still got the headphones.

01:52

We still got the headphones that we can rock.

We still got the headphones that we can rock.

01:55

I've sold two companies now. One to a big company. So when we sold a Twitch, Twitch owned by Amazon, selling company in Amazon was one way. And then milk road, we sold to two private buyers, just like, you know, two dudes who, were independently wealthy from their previous businesses, and it was a it was a totally different transaction. So I'm gonna share some lessons from each. When I made this presentation, I had only sold Bevo. So I added the milk road one just before I went live here.

I've sold two companies now. One to a big company. So when we sold a Twitch, Twitch owned by Amazon, selling company in Amazon was one way. And then milk road, we sold to two private buyers, just like, you know, two dudes who, were independently wealthy from their previous businesses, and it was a it was a totally different transaction. So I'm gonna share some lessons from each. When I made this presentation, I had only sold Bevo. So I added the milk road one just before I went live here.

02:20

But the rest of the presentation, I didn't add any lessons. So let's see if I've learned something the second time.

But the rest of the presentation, I didn't add any lessons. So let's see if I've learned something the second time.

02:26

I always start with this when it comes to selling a company. This is a this is a picture of a foot and a dog, and it is the first picture ever posted on Instagram.

I always start with this when it comes to selling a company. This is a this is a picture of a foot and a dog, and it is the first picture ever posted on Instagram.

02:34

Kevin Sistrom, the founder of Instagram. He posted this,

Kevin Sistrom, the founder of Instagram. He posted this,

02:37

right when Instagram went live. And,

right when Instagram went live. And,

02:40

you know, today, it's just, like, iconic picture of, like, you know, This is how it all started.

you know, today, it's just, like, iconic picture of, like, you know, This is how it all started.

02:45

And, you know, here's the guy himself. Kevin Cistrom looks great. You know, power pose. Got the white sneaks.

And, you know, here's the guy himself. Kevin Cistrom looks great. You know, power pose. Got the white sneaks.

02:51

And,

And,

02:52

if you're Kevin Cistrom, know, you got a dozen employees.

if you're Kevin Cistrom, know, you got a dozen employees.

02:55

You make a billion dollars. Everybody loves you. Right? Because

You make a billion dollars. Everybody loves you. Right? Because

02:58

you've built the hot thing

you've built the hot thing

03:00

everybody comes knocking at you go. Right? If you ask Kevin System, how do you sell your company? He'd say, well, you gotta create, you know, sensational product, and then people will just come and offer you a billion dollars. Right? Like, that would be his experience. My experience was very different. We had built a good, not great business.

everybody comes knocking at you go. Right? If you ask Kevin System, how do you sell your company? He'd say, well, you gotta create, you know, sensational product, and then people will just come and offer you a billion dollars. Right? Like, that would be his experience. My experience was very different. We had built a good, not great business.

03:15

We had built a good, but early business, and we were trying to sell. And so here's,

We had built a good, but early business, and we were trying to sell. And so here's,

03:20

what we experienced. So if you're if you're reading this or if you're watching this,

what we experienced. So if you're if you're reading this or if you're watching this,

03:24

you are not Instagram. And I think my talk will be maybe a little bit more applicable to you than than what, you might hear from the people that are on the Forbes list because they're they were in a totally different position of leverage and bargaining power than most people are when they go to sell their business.

you are not Instagram. And I think my talk will be maybe a little bit more applicable to you than than what, you might hear from the people that are on the Forbes list because they're they were in a totally different position of leverage and bargaining power than most people are when they go to sell their business.

03:39

This is you. You've tried. You've pivoted. You've hustled. It's not working or it's kinda working or it's working, but you're just tired. Are you ready to move on? And this is a very common thing entrepreneurs get to.

This is you. You've tried. You've pivoted. You've hustled. It's not working or it's kinda working or it's working, but you're just tired. Are you ready to move on? And this is a very common thing entrepreneurs get to.

03:51

And, when you're here, it's okay to think

And, when you're here, it's okay to think

03:54

you know, where where should I go? I've been there. I felt it myself.

you know, where where should I go? I've been there. I felt it myself.

03:57

And this advice I heard all the time was great companies are bought,

And this advice I heard all the time was great companies are bought,

04:02

not sold.

not sold.

04:03

That sounds pretty cool. It's a nice little fortune cookie. But remember, you're not Instagram. And so

That sounds pretty cool. It's a nice little fortune cookie. But remember, you're not Instagram. And so

04:09

great companies are bought not sold. I think that's true. But most companies are sold not bought. That's my my contention at least. And that was my experience. We sold the companies more so than we just immediately got bought because we were just crushing it beyond belief, like you would, like you see when, you know, whatever. Huge companies get acquired.

great companies are bought not sold. I think that's true. But most companies are sold not bought. That's my my contention at least. And that was my experience. We sold the companies more so than we just immediately got bought because we were just crushing it beyond belief, like you would, like you see when, you know, whatever. Huge companies get acquired.

04:30

Here's a headline from when we got bought. This number is incorrect.

Here's a headline from when we got bought. This number is incorrect.

04:33

Which just shows you don't read don't believe everything you read in the media.

Which just shows you don't read don't believe everything you read in the media.

04:36

I don't know where they got that exactly, but,

I don't know where they got that exactly, but,

04:40

yeah. We we sold. We sold for, you know, eight figures, but not, not like that. You know, once you and and sales, it's weird when people come up with these numbers too because it's, like, you get cash up front, then we got these signing bonus. You get stock. Then the stock price changes, you know, it's all there's all kinds of ways to to sort of, like, manipulate,

yeah. We we sold. We sold for, you know, eight figures, but not, not like that. You know, once you and and sales, it's weird when people come up with these numbers too because it's, like, you get cash up front, then we got these signing bonus. You get stock. Then the stock price changes, you know, it's all there's all kinds of ways to to sort of, like, manipulate,

04:57

sales numbers. But,

sales numbers. But,

05:00

When you get I I let me let me go back here. When you got started,

When you get I I let me let me go back here. When you got started,

05:05

you thought this is gonna work. And this will be big if it works. And I can do this, and I wanna do this more than anything else. That's typically the mindset of an entrepreneur

you thought this is gonna work. And this will be big if it works. And I can do this, and I wanna do this more than anything else. That's typically the mindset of an entrepreneur

05:15

when you start. And the reason I say this is because the first thing when it comes to selling your companies figure out, do you even want to sell? That's why I started here. Do you even want to sell? Because when you're in this state of mind,

when you start. And the reason I say this is because the first thing when it comes to selling your companies figure out, do you even want to sell? That's why I started here. Do you even want to sell? Because when you're in this state of mind,

05:26

no way you would sell. Why would you sell? This is gonna work. It's gonna be huge. I could do this, and I wanna do this more than anything else. That's how you should feel when you start a company.

no way you would sell. Why would you sell? This is gonna work. It's gonna be huge. I could do this, and I wanna do this more than anything else. That's how you should feel when you start a company.

05:34

And then you have to check-in and say, alright.

And then you have to check-in and say, alright.

05:37

You're seven. And try not to check-in on your most frustrated day, but you wanna say,

You're seven. And try not to check-in on your most frustrated day, but you wanna say,

05:42

Do I still believe this is gonna work? Do I still believe this will be big if it works? Do I still believe I can do this? And do I still wanna do this more than anything else? When we sold our first company, we had hit this, you know, all of them kind of are true except for

Do I still believe this is gonna work? Do I still believe this will be big if it works? Do I still believe I can do this? And do I still wanna do this more than anything else? When we sold our first company, we had hit this, you know, all of them kind of are true except for

05:55

this will be big if it works. I thought we might have a medium sized eggs the first time. And that's why I decided, well, let's sell now versus

this will be big if it works. I thought we might have a medium sized eggs the first time. And that's why I decided, well, let's sell now versus

06:02

play this out for four years,

play this out for four years,

06:04

four more years. And,

four more years. And,

06:06

hit a medium sized exit. Yeah. It'll be multiples more than where we're at today, but,

hit a medium sized exit. Yeah. It'll be multiples more than where we're at today, but,

06:11

it still requires four more years and time is so precious.

it still requires four more years and time is so precious.

06:14

With Milk Road, it was more of the last one. I wanna do this more than anything else. It was actually working, and I thought it could be big. But,

With Milk Road, it was more of the last one. I wanna do this more than anything else. It was actually working, and I thought it could be big. But,

06:21

my brain was wandering to new ideas, new things, and I was loving doing the podcast so much. I just is this the one thing I wanna wake up and do every day and focus on with laser focus? Yes or no. So these these are the questions you gotta ask yourself, say, are these more true today? Less true today or at the same as when I started?

my brain was wandering to new ideas, new things, and I was loving doing the podcast so much. I just is this the one thing I wanna wake up and do every day and focus on with laser focus? Yes or no. So these these are the questions you gotta ask yourself, say, are these more true today? Less true today or at the same as when I started?

06:38

And that gives you this takes to this point, right, when should yourself. So if you get a great offer, cool. Consider it. If you don't believe in the business anymore, well, maybe sell the assets.

And that gives you this takes to this point, right, when should yourself. So if you get a great offer, cool. Consider it. If you don't believe in the business anymore, well, maybe sell the assets.

06:49

Because if you don't believe, you're not gonna really take massive action. You don't take massive action. You're not gonna get any and then you'll just reinforce your belief. Like, see, I I knew it. I knew it wouldn't work. Right? So belief is really, really key.

Because if you don't believe, you're not gonna really take massive action. You don't take massive action. You're not gonna get any and then you'll just reinforce your belief. Like, see, I I knew it. I knew it wouldn't work. Right? So belief is really, really key.

07:00

And lastly, the, you know, common cases, you just don't wanna run the business anymore. You prefer to exit versus hire an operator and you just you're ready to move on and do other things. So three moments where you might sell.

And lastly, the, you know, common cases, you just don't wanna run the business anymore. You prefer to exit versus hire an operator and you just you're ready to move on and do other things. So three moments where you might sell.

07:10

Do you discuss with? I just wanna put this up here for a second. So, you know, talk about it with yourself and maybe you're some mentors, but then yourself and your partners, yourself and your co founders, it's really a a lot of conversations in your own head, which is why managing your own psychology

Do you discuss with? I just wanna put this up here for a second. So, you know, talk about it with yourself and maybe you're some mentors, but then yourself and your partners, yourself and your co founders, it's really a a lot of conversations in your own head, which is why managing your own psychology

07:24

during a sales process is the number one most important thing.

during a sales process is the number one most important thing.

07:28

It's what helps you be good in negotiation. It's what helps you, get people across the line. It's what helps you, you know, stand up and operate every day while you're also trying to sell the company. It's very difficult to do that. So managerial psychology is really important. And then there's a note about your investors and your team. There is a finesse you wanna do with this. Some people believe Don't tell anybody until the deals are done.

It's what helps you be good in negotiation. It's what helps you, get people across the line. It's what helps you, you know, stand up and operate every day while you're also trying to sell the company. It's very difficult to do that. So managerial psychology is really important. And then there's a note about your investors and your team. There is a finesse you wanna do with this. Some people believe Don't tell anybody until the deals are done.

07:51

Some people say, well, no. I wanna be transparent with my team. For me, I've always been on the be transparent with your team. It does have drawbacks. People start to work a little bit differently when they realize, oh, we're gonna try to sell this thing. What does that mean for me? Should I be looking for a job? Is this what happens if we don't sell? Will I be rich? What's gonna happen? And so

Some people say, well, no. I wanna be transparent with my team. For me, I've always been on the be transparent with your team. It does have drawbacks. People start to work a little bit differently when they realize, oh, we're gonna try to sell this thing. What does that mean for me? Should I be looking for a job? Is this what happens if we don't sell? Will I be rich? What's gonna happen? And so

08:06

I think discussing it with your investors or your team is something to be very careful about. I probably aired too much on the transparency side. I if I would gonna go pay play it back now, I would only discuss with my co founders and I would not talk to the team until the deal is done.

I think discussing it with your investors or your team is something to be very careful about. I probably aired too much on the transparency side. I if I would gonna go pay play it back now, I would only discuss with my co founders and I would not talk to the team until the deal is done.

08:24

And so you wanna create a little, like, communication table. So your co founders, you wanna tell them ASAP. You know, Hey, it's time to explore options. I'm gonna do x. You can help me by doing y.

And so you wanna create a little, like, communication table. So your co founders, you wanna tell them ASAP. You know, Hey, it's time to explore options. I'm gonna do x. You can help me by doing y.

08:34

Investors, you wanna tell them and say, hey, we're gonna explore a sale. Here's what I think would look like. Employees, you might say, hey, we've been approached. We're considering it blah, blah, blah, here's the good news. What it means for you? I wrote, you know, you can put ASAP. You can say this, we're gonna do this when the deal closes. You can say that we're gonna do this when the deals getting close to closing. You know, you you wanna decide your timelines and create your communication table.

Investors, you wanna tell them and say, hey, we're gonna explore a sale. Here's what I think would look like. Employees, you might say, hey, we've been approached. We're considering it blah, blah, blah, here's the good news. What it means for you? I wrote, you know, you can put ASAP. You can say this, we're gonna do this when the deal closes. You can say that we're gonna do this when the deals getting close to closing. You know, you you wanna decide your timelines and create your communication table.

08:56

Okay. Now the fun parts, how do you actually sell the damn thing? So who's who might buy you? You wanna break it up into buckets of potential buyers because you're really gonna run a sales process. No matter who you are, you become a salesman when it comes time, to do this. So I would say there's four potential buyers. There's the unicorn. So

Okay. Now the fun parts, how do you actually sell the damn thing? So who's who might buy you? You wanna break it up into buckets of potential buyers because you're really gonna run a sales process. No matter who you are, you become a salesman when it comes time, to do this. So I would say there's four potential buyers. There's the unicorn. So

09:12

high growth companies that might wanna buy you,

high growth companies that might wanna buy you,

09:15

to accelerate their growth.

to accelerate their growth.

09:17

There's dying dinosaur. So, you know, incumbents that might need to get fresh blood, fresh tech, fresh, you know, fresh energy, fresh cash flow, whatever it may be.

There's dying dinosaur. So, you know, incumbents that might need to get fresh blood, fresh tech, fresh, you know, fresh energy, fresh cash flow, whatever it may be.

09:27

There's your adjacent companies, your adjacent alligators,

There's your adjacent companies, your adjacent alligators,

09:30

this is like, what's that game? Legends of the Hidden Head and Temple. So, yeah, you got the adjacent alligators. They're they're next to you. They might be peers or, competitors that you merge with. And the last one is Talent Farms. This is just go sell it to Google and, they just want Talent. So they they don't care about your company or your market, but they've they just want engineers.

this is like, what's that game? Legends of the Hidden Head and Temple. So, yeah, you got the adjacent alligators. They're they're next to you. They might be peers or, competitors that you merge with. And the last one is Talent Farms. This is just go sell it to Google and, they just want Talent. So they they don't care about your company or your market, but they've they just want engineers.

09:50

You have to also know the different roles. Who are you gonna be talking to? So when you get bought,

You have to also know the different roles. Who are you gonna be talking to? So when you get bought,

09:56

the other side is gonna have an exec champion. So who's the one person

the other side is gonna have an exec champion. So who's the one person

09:59

that really wants this deal to happen. If you can't identify that person, ain't no deal gonna happen. You should always know who is the person that is pounding the table on that side saying we gotta do this deal. Or, hey, come on. Let's figure out a solution to that problem. Or do just let's bridge the gap. Let's come up a little bit. Right? You need to know who is the champion on the other side. Identify them and you're gonna nurture that relationship. You gotta know who's the company router. Who's the person in the middle that can get you to the different people that need buy in? Usually, in big companies, it'll be corp dev. But in smaller companies, you might know who else it is. Maybe there's a a admin person or assistant, just who are you gonna be able to reliably get information from and to That's not necessarily the key decision maker. And then you got your deal, Dula. So, this is using,

that really wants this deal to happen. If you can't identify that person, ain't no deal gonna happen. You should always know who is the person that is pounding the table on that side saying we gotta do this deal. Or, hey, come on. Let's figure out a solution to that problem. Or do just let's bridge the gap. Let's come up a little bit. Right? You need to know who is the champion on the other side. Identify them and you're gonna nurture that relationship. You gotta know who's the company router. Who's the person in the middle that can get you to the different people that need buy in? Usually, in big companies, it'll be corp dev. But in smaller companies, you might know who else it is. Maybe there's a a admin person or assistant, just who are you gonna be able to reliably get information from and to That's not necessarily the key decision maker. And then you got your deal, Dula. So, this is using,

10:42

childbirth metaphor.

childbirth metaphor.

10:44

So if you're trying to burp this baby, you know, a do look who helps you, you know, remember to breathe. Think about this.

So if you're trying to burp this baby, you know, a do look who helps you, you know, remember to breathe. Think about this.

10:51

You know, let's move to this position. It's gonna help. Hey, we need to get water here. You know, your doula is the one helping you through this often, you know,

You know, let's move to this position. It's gonna help. Hey, we need to get water here. You know, your doula is the one helping you through this often, you know,

10:59

Painful, but wonderful, you know,

Painful, but wonderful, you know,

11:02

process.

process.

11:03

And so I like to find my deal doodle. These are one or two people who have done M and A before.

And so I like to find my deal doodle. These are one or two people who have done M and A before.

11:08

In my, you know, they're they're in my corner. I can trust them that they'll be keep everything confidential, and I'm gonna bug the hell out of them. I'm gonna, you know, these are people that I texting and saying,

In my, you know, they're they're in my corner. I can trust them that they'll be keep everything confidential, and I'm gonna bug the hell out of them. I'm gonna, you know, these are people that I texting and saying,

11:18

hey, I'm gonna say this back here. Is that too desperate? No. No. Okay. Let me, you know, wordsmithing it. Like, I'm a, you know, seventh grade girl trying to figure out Did they like me? Do they not like me? How do I phrase this in a way that demonstrates strength without pushing too far? Your deal duelist will help with that.

hey, I'm gonna say this back here. Is that too desperate? No. No. Okay. Let me, you know, wordsmithing it. Like, I'm a, you know, seventh grade girl trying to figure out Did they like me? Do they not like me? How do I phrase this in a way that demonstrates strength without pushing too far? Your deal duelist will help with that.

11:33

For those who love one of the greatest shows on our on earth, this is the dentist system. So I'm gonna take you through the dentist system of how to how to sell your company. So

For those who love one of the greatest shows on our on earth, this is the dentist system. So I'm gonna take you through the dentist system of how to how to sell your company. So

11:42

Stage one, the d demonstrate values. So why do companies buy companies? There are financial reasons, and then there are strategic reasons. So Financial is obvious. You're crushing it. You're making tons of money. They want your EBITDA. They want your revenue. Pretty straightforward if you have it. Many people don't. So who buys companies when there's strategic reasons? Well, here's six strategic reasons.

Stage one, the d demonstrate values. So why do companies buy companies? There are financial reasons, and then there are strategic reasons. So Financial is obvious. You're crushing it. You're making tons of money. They want your EBITDA. They want your revenue. Pretty straightforward if you have it. Many people don't. So who buys companies when there's strategic reasons? Well, here's six strategic reasons.

12:02

The CEO finds it interesting. That's the first one. That is surprising. How far that CEO's got a pet project. CEO, has got an itch to scratch. Awesome. If you got if you're so lucky to have that, fantastic.

The CEO finds it interesting. That's the first one. That is surprising. How far that CEO's got a pet project. CEO, has got an itch to scratch. Awesome. If you got if you're so lucky to have that, fantastic.

12:14

Number two, There's a new executive or an executive gets a promotion, and they need to demonstrate big moves as a signal. So they're they're if they're on the way out or they're on the way in and they're looking for For some kind of big move, some big big thing to do as a signal, that's good for you when that happens. Number three, they're trying to catch up to a surge in competitor

Number two, There's a new executive or an executive gets a promotion, and they need to demonstrate big moves as a signal. So they're they're if they're on the way out or they're on the way in and they're looking for For some kind of big move, some big big thing to do as a signal, that's good for you when that happens. Number three, they're trying to catch up to a surge in competitor

12:32

You know, this is, Adobe trying to catch up with, you know, using Figma to catch up. This is, there are many examples of this along the way. Synergy, one plus one equals three. This is Uber merging with Didi in China,

You know, this is, Adobe trying to catch up with, you know, using Figma to catch up. This is, there are many examples of this along the way. Synergy, one plus one equals three. This is Uber merging with Didi in China,

12:44

so that they don't keep competing each other driving up, they say, hey, why don't we merge into one entity? And then we own a monopoly. We can cut cost, actually. We can raise prices.

so that they don't keep competing each other driving up, they say, hey, why don't we merge into one entity? And then we own a monopoly. We can cut cost, actually. We can raise prices.

12:53

So one plus one could equal three in this case.

So one plus one could equal three in this case.

12:56

They're afraid of you. This is Facebook buying Instagram. You know, you do what they do, but better. Instagram was better at sharing photos than Facebook. And, okay, you're gonna get a strategic premium when that when that's the case. And the last one is you have unique talent. So you might have computer vision PhDs, and they're having trouble finding that talent en masse And it's actually cheaper to acquire you and get the talent as a bundle that's proven to work together versus going through a long slow recruiting process. And so it's important to figure out for every potential buyer, what what might be the reasons

They're afraid of you. This is Facebook buying Instagram. You know, you do what they do, but better. Instagram was better at sharing photos than Facebook. And, okay, you're gonna get a strategic premium when that when that's the case. And the last one is you have unique talent. So you might have computer vision PhDs, and they're having trouble finding that talent en masse And it's actually cheaper to acquire you and get the talent as a bundle that's proven to work together versus going through a long slow recruiting process. And so it's important to figure out for every potential buyer, what what might be the reasons

13:24

that, that that they will they will buy you.

that, that that they will they will buy you.

13:29

Next step, e, engage physically. So who do you actually reach out to? What are you saying? What's the goal?

Next step, e, engage physically. So who do you actually reach out to? What are you saying? What's the goal?

13:34

You know, you can reach out to a number of folks and reach out to executives. Just go meet somebody who's,

You know, you can reach out to a number of folks and reach out to executives. Just go meet somebody who's,

13:39

at the company. Corpdev, their job is to meet companies that might be interesting to acquire.

at the company. Corpdev, their job is to meet companies that might be interesting to acquire.

13:45

Investors might make introductions. You know, when we were selling, we went to, I went to an investor who was an investor in Discord, and I said, hey, we got thing. Discort might wanna buy it. He said, let me email the CEO. CEO gets an email from their biggest investor. They're gonna take it seriously. And then all of a sudden, I'm you know, next day, I'm in a meeting with the CEO, and I'm pitching why this why one plus one could equal three.

Investors might make introductions. You know, when we were selling, we went to, I went to an investor who was an investor in Discord, and I said, hey, we got thing. Discort might wanna buy it. He said, let me email the CEO. CEO gets an email from their biggest investor. They're gonna take it seriously. And then all of a sudden, I'm you know, next day, I'm in a meeting with the CEO, and I'm pitching why this why one plus one could equal three.

14:05

There's also advisors.

There's also advisors.

14:07

Well, what do you say? You know, you say, Hey, I wanna discuss a partnership on how we might be able to work together, intent. Right? Like, that's discuss a partnership is the best way to to kinda open the door. The more aggressive way, which I've done also is, hey, we got an offer. We're, you know, we're considering our next steps. Maybe we're gonna raise money. We or we have an acquisition offer.

Well, what do you say? You know, you say, Hey, I wanna discuss a partnership on how we might be able to work together, intent. Right? Like, that's discuss a partnership is the best way to to kinda open the door. The more aggressive way, which I've done also is, hey, we got an offer. We're, you know, we're considering our next steps. Maybe we're gonna raise money. We or we have an acquisition offer.

14:24

We'd love to talk to you before we just go and make a decision. And they say, oh, yeah. Yeah. Come talk to us first. Don't just don't just do it without, you know, we wanna wanna take a peek under the hood. We wanna to know our options before we get in. Your goal here is just to get an in person meeting. And so,

We'd love to talk to you before we just go and make a decision. And they say, oh, yeah. Yeah. Come talk to us first. Don't just don't just do it without, you know, we wanna wanna take a peek under the hood. We wanna to know our options before we get in. Your goal here is just to get an in person meeting. And so,

14:40

you know, use these two frames in order to get an in person meeting. Now what do you do if you don't know them? Well, you gotta reach out. You gotta reach out cold. Ideally, you've been building a relationship over time. This is the smart way to do it is you meet people in the company. You keep them posted with light updates. They see you. They know you. They see you at an industry event. That when the time comes, you can do this. You're not an absolute stranger approaching them. But I've done it as a stranger too. Usually, when I'm a stranger, corp dev is the easiest way to go.

you know, use these two frames in order to get an in person meeting. Now what do you do if you don't know them? Well, you gotta reach out. You gotta reach out cold. Ideally, you've been building a relationship over time. This is the smart way to do it is you meet people in the company. You keep them posted with light updates. They see you. They know you. They see you at an industry event. That when the time comes, you can do this. You're not an absolute stranger approaching them. But I've done it as a stranger too. Usually, when I'm a stranger, corp dev is the easiest way to go.

15:06

I can find this client info. Have you heard of HubSpot?

I can find this client info. Have you heard of HubSpot?

15:09

HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out of sync spreadsheets or dueling databases. HubSpot, grow better.

HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out of sync spreadsheets or dueling databases. HubSpot, grow better.

15:22

Next, n nurture dependence. I'm covering some of the words here, but

Next, n nurture dependence. I'm covering some of the words here, but

15:26

you want lust, not love. Lust is gonna get is a high burst immediate, like, oh, I see the it's like greed. It's like, oh, I want something out of this. Your goal is to tap into emotions. And when I say this, it's about clarity, not trickery. You're not gonna manipulate anybody into buying your company. What you can do is frame what you're doing in a way that is maximally appealing to them. Something that taps into their desires, their dreams, their emotions, their

you want lust, not love. Lust is gonna get is a high burst immediate, like, oh, I see the it's like greed. It's like, oh, I want something out of this. Your goal is to tap into emotions. And when I say this, it's about clarity, not trickery. You're not gonna manipulate anybody into buying your company. What you can do is frame what you're doing in a way that is maximally appealing to them. Something that taps into their desires, their dreams, their emotions, their

15:53

pain points, and you need to

pain points, and you need to

15:56

trim the fat of your story so that you are the answer to that problem.

trim the fat of your story so that you are the answer to that problem.

16:01

I'll give you an example. When we sold Twitch,

I'll give you an example. When we sold Twitch,

16:05

I had met, in in terms of engaged physically. I'd I'd gone I'd gone through Korptev. Korptev got me a meeting with the CEO that day. And I said, alright. Well, I don't know what to I don't know how to frame what we're doing to the CEO.

I had met, in in terms of engaged physically. I'd I'd gone I'd gone through Korptev. Korptev got me a meeting with the CEO that day. And I said, alright. Well, I don't know what to I don't know how to frame what we're doing to the CEO.

16:17

But I had met a guy on a boat in Australia of all places. Who worked at Twitch. He was an exec. I said, I gotta hit that guy up. So I hit him up. I said, hey, can I gonna be with you

But I had met a guy on a boat in Australia of all places. Who worked at Twitch. He was an exec. I said, I gotta hit that guy up. So I hit him up. I said, hey, can I gonna be with you

16:25

today?

today?

16:28

I got a meeting with the CEO tomorrow. I don't know how to navigate it. You know the guy. Can I just get a beer with you just to to get your download? So I go get a beer with him. And I say, you know, here's,

I got a meeting with the CEO tomorrow. I don't know how to navigate it. You know the guy. Can I just get a beer with you just to to get your download? So I go get a beer with him. And I say, you know, here's,

16:38

what's he like? What's he, you know, what what should I expect? Blah blah blah. And then I said,

what's he like? What's he, you know, what what should I expect? Blah blah blah. And then I said,

16:43

tell me what are the top, like, three when you're in these exec meetings, you're, you know, you're you're at the high love or I'm stroking the ego. You're you're I know you're in the room when they're making the big decision. So what are the top three priorities? Like, what do y'all really care about? Is profitability? Is it revenue? Is it growth? Where what are the top of your priorities? I think he'll say them. I said, okay. I said, which one of those is, like, stuck? Which one of those needs a solution?

tell me what are the top, like, three when you're in these exec meetings, you're, you know, you're you're at the high love or I'm stroking the ego. You're you're I know you're in the room when they're making the big decision. So what are the top three priorities? Like, what do y'all really care about? Is profitability? Is it revenue? Is it growth? Where what are the top of your priorities? I think he'll say them. I said, okay. I said, which one of those is, like, stuck? Which one of those needs a solution?

17:07

Because, like, sometimes you already have a solution in mind. You love that solution. You don't wanna interrupt it. But which one is still we don't really love our plan here. It feels the weakest and needs some bolstering.

Because, like, sometimes you already have a solution in mind. You love that solution. You don't wanna interrupt it. But which one is still we don't really love our plan here. It feels the weakest and needs some bolstering.

17:16

And then he told me, hey, we have this thing.

And then he told me, hey, we have this thing.

17:19

And, actually, everybody's pretty bullish on it, but we don't have the right team, and we don't have the tech to do it. And the guy we have, he's not good with tax. That's gonna be a problem. Oh,

And, actually, everybody's pretty bullish on it, but we don't have the right team, and we don't have the tech to do it. And the guy we have, he's not good with tax. That's gonna be a problem. Oh,

17:28

say less. So then when I go into the meeting the next ASA,

say less. So then when I go into the meeting the next ASA,

17:31

we're great at doing this one thing. And I'm a great leader and I know tech. And we have the team that we have the tech already built, and I have the team that that that built it. And so now I package my story as how I am the solution to their problem. Versus what most people do is they come in as a startup and say, here's what we do. Here's why we're great. You know, here's this other feature we have. Here's this feature we have. And, oh, this guy says this.

we're great at doing this one thing. And I'm a great leader and I know tech. And we have the team that we have the tech already built, and I have the team that that that built it. And so now I package my story as how I am the solution to their problem. Versus what most people do is they come in as a startup and say, here's what we do. Here's why we're great. You know, here's this other feature we have. Here's this feature we have. And, oh, this guy says this.

17:53

They're all over the place. And it's like, good. Alright. Good for you, but that doesn't tell me why I want you. So it's a it's a sales, but you gotta package yourself as the solution to their problem.

They're all over the place. And it's like, good. Alright. Good for you, but that doesn't tell me why I want you. So it's a it's a sales, but you gotta package yourself as the solution to their problem.

18:04

Another way to say this, say this, you need to find their pain, offer a cure,

Another way to say this, say this, you need to find their pain, offer a cure,

18:09

you know, other questions that might be helpful.

you know, other questions that might be helpful.

18:11

What initiative has the most juice or momentum or buy in right now? You wanna buy in is like the best word with corporations.

What initiative has the most juice or momentum or buy in right now? You wanna buy in is like the best word with corporations.

18:17

What what has all what has all the the exact buy in right now? Oh, they're all bought into this idea.

What what has all what has all the the exact buy in right now? Oh, they're all bought into this idea.

18:23

What are the fires that he's putting out? Who's on the chopping block?

What are the fires that he's putting out? Who's on the chopping block?

18:27

What company are you guys most afraid of?

What company are you guys most afraid of?

18:30

If I only had twenty minutes in front of your CEO, what part of what we're doing do you think he'd be most interested in talking about?

If I only had twenty minutes in front of your CEO, what part of what we're doing do you think he'd be most interested in talking about?

18:37

And then you also wanna suss out Who's the decision maker? So and, hey, right now we're talking to this guy. Is he the decision maker or who should we be talking to? And, oh, no. No. His boss is boss is the guy.

And then you also wanna suss out Who's the decision maker? So and, hey, right now we're talking to this guy. Is he the decision maker or who should we be talking to? And, oh, no. No. His boss is boss is the guy.

18:48

Then you wanna talk down talk to this is a little pro tip. Talk to founders who have been acquired by the same company before. So go to them, say, hey,

Then you wanna talk down talk to this is a little pro tip. Talk to founders who have been acquired by the same company before. So go to them, say, hey,

18:56

You acquired three years ago, four years ago, whatever. What was it like? How did the process go? Where the timelines that they told you real or fake was the they said this is the most we could do, was that real or fake?

You acquired three years ago, four years ago, whatever. What was it like? How did the process go? Where the timelines that they told you real or fake was the they said this is the most we could do, was that real or fake?

19:07

Did they try to retrade the deal later or not?

Did they try to retrade the deal later or not?

19:10

What What was your experience with the CEO? Was he really into it? Was he is he more reserved? What did what did that mean? You're trying to get a bunch of intel And, hey, this is founder to founder from somebody who, you know, has done it before. Ideally, who's left the company now. I got a ton of great intel on this.

What What was your experience with the CEO? Was he really into it? Was he is he more reserved? What did what did that mean? You're trying to get a bunch of intel And, hey, this is founder to founder from somebody who, you know, has done it before. Ideally, who's left the company now. I got a ton of great intel on this.

19:27

Okay.

Okay.

19:27

Here's another.

Here's another.

19:29

This is just a classic move when we did it. You wanna do the work for them. So what a lot of people do is they say, Here's here's what we do.

This is just a classic move when we did it. You wanna do the work for them. So what a lot of people do is they say, Here's here's what we do.

19:38

Then they sit there and they pray.

Then they sit there and they pray.

19:40

I hope they understand it. I hope they get it. I hope they like it.

I hope they understand it. I hope they get it. I hope they like it.

19:44

No. Through that. You take matters into your own hands. So you basically say,

No. Through that. You take matters into your own hands. So you basically say,

19:48

hey, I wrote up a one pager that explains where I think this makes a lot of sense strategically for you guys because if we're gonna do this, then, you know, I wanna make sure, you know, I thought about this from your perspective and what what this would look like once we join.

hey, I wrote up a one pager that explains where I think this makes a lot of sense strategically for you guys because if we're gonna do this, then, you know, I wanna make sure, you know, I thought about this from your perspective and what what this would look like once we join.

20:02

You know, I did some crazy things. So, basically, well, on the technical side, I had our team write a technical one pager. Here's all the stuff we built. How long it would take for anybody to build it? What's our special sauce?

You know, I did some crazy things. So, basically, well, on the technical side, I had our team write a technical one pager. Here's all the stuff we built. How long it would take for anybody to build it? What's our special sauce?

20:13

So that you they could just see, man. Buying this is gonna save us so much time. Look at all these assets they already have. Here's the talent. Here's my I've I've made our team a present, like, into a presentation of, like, here's all the talent we have. What they've done before. Make it really easy for them. It's a dating profile. Do I want to swipe right or left on these people?

So that you they could just see, man. Buying this is gonna save us so much time. Look at all these assets they already have. Here's the talent. Here's my I've I've made our team a present, like, into a presentation of, like, here's all the talent we have. What they've done before. Make it really easy for them. It's a dating profile. Do I want to swipe right or left on these people?

20:31

And then I and this thing I wrote a letter from the CEO, I said, I said,

And then I and this thing I wrote a letter from the CEO, I said, I said,

20:35

I think this deal makes a lot of sense, and I wanted to write that out into a memo. I know you guys have this memo writing culture, like Amazon has thing. Like, you write six page memos for all your strategies.

I think this deal makes a lot of sense, and I wanted to write that out into a memo. I know you guys have this memo writing culture, like Amazon has thing. Like, you write six page memos for all your strategies.

20:45

So I took a stab. I wrote one. You know, I, obviously, I don't know some of the internal things. So I, you know, I I took guesses. They're they're in blue. You can see the guesses. But, yeah, I wanted to put my logic on paper because I don't wanna do this if this doesn't make sense. Right? You're not saying, please, please, please buy me. You're saying, I'm trying to figure out, does this make sense for both of us? It's a two way street.

So I took a stab. I wrote one. You know, I, obviously, I don't know some of the internal things. So I, you know, I I took guesses. They're they're in blue. You can see the guesses. But, yeah, I wanted to put my logic on paper because I don't wanna do this if this doesn't make sense. Right? You're not saying, please, please, please buy me. You're saying, I'm trying to figure out, does this make sense for both of us? It's a two way street.

21:04

And so in order to do that, I wrote something to give myself clarity. I thought you'd like to see it. And so, I actually wrote for one of the acquisitions. I said, this is how I would announce this deal to the to the company, to the team, to your exec team, and the rest of the employees.

And so in order to do that, I wrote something to give myself clarity. I thought you'd like to see it. And so, I actually wrote for one of the acquisitions. I said, this is how I would announce this deal to the to the company, to the team, to your exec team, and the rest of the employees.

21:19

And I just wrote a really persuasive argument of, like, we bought this company. Here's why. Here's why this was a good idea. Here's how best here at Austin this is gonna be. Here's the how this solves one of our problems.

And I just wrote a really persuasive argument of, like, we bought this company. Here's why. Here's why this was a good idea. Here's how best here at Austin this is gonna be. Here's the how this solves one of our problems.

21:29

I'm so excited about this acquisition. And, like, in doing so, again, I made it easy. Somebody told me this, one of my deal dealers, he goes, you need to turn your company into a giant buy button. Like, like Amazon one click checkout. So that means make it easy to understand what you do, make it easy for them to understand your team, your technicals, your your strap you strategically align. And last thing, you get your get all your financials in, like, very clean proper,

I'm so excited about this acquisition. And, like, in doing so, again, I made it easy. Somebody told me this, one of my deal dealers, he goes, you need to turn your company into a giant buy button. Like, like Amazon one click checkout. So that means make it easy to understand what you do, make it easy for them to understand your team, your technicals, your your strap you strategically align. And last thing, you get your get all your financials in, like, very clean proper,

21:53

you know, data room so that

you know, data room so that

21:56

There's no friction in trying to buy your company.

There's no friction in trying to buy your company.

22:00

Last one? Neglect emotionally. The dentist Reynolds special. You need to find another partner. You need to go cold. Alright. You don't wanna be all in hot on one partner. That is not how you get the best deal. So you need to find multiple partners at the same time. You need to be negotiating these in parallel. You don't do one at a time. You you start the process. You're now doing running you know, you're starting conversations with ten folks at once, twenty folks at once. You're narrowing it down. You're trying to get multiple offers in the same week so that you can tell them, hey, it's we got another offer.

Last one? Neglect emotionally. The dentist Reynolds special. You need to find another partner. You need to go cold. Alright. You don't wanna be all in hot on one partner. That is not how you get the best deal. So you need to find multiple partners at the same time. You need to be negotiating these in parallel. You don't do one at a time. You you start the process. You're now doing running you know, you're starting conversations with ten folks at once, twenty folks at once. You're narrowing it down. You're trying to get multiple offers in the same week so that you can tell them, hey, it's we got another offer.

22:28

Sometimes you go cold a little bit. Make them sweat.

Sometimes you go cold a little bit. Make them sweat.

22:31

Not too long. Don't push it, but, it's not a bad thing. Well, I also wanna leave bread crumbs. I don't know if this made a difference or not, but I would like

Not too long. Don't push it, but, it's not a bad thing. Well, I also wanna leave bread crumbs. I don't know if this made a difference or not, but I would like

22:38

check-in on my Instagram story. Like, I'm in Seattle.

check-in on my Instagram story. Like, I'm in Seattle.

22:42

Oh, cool. I've never been to the office to this cool office before. And, like, they know. They're like, oh, at Microsoft. He's at Facebook. He's where is he? He's he's talking to he's talking to our competitors.

Oh, cool. I've never been to the office to this cool office before. And, like, they know. They're like, oh, at Microsoft. He's at Facebook. He's where is he? He's he's talking to he's talking to our competitors.

22:52

So, you know, I don't I don't know if that shit works, but it it amused me at the least. It made me feel like I was doing some some James Bond shit.

So, you know, I don't I don't know if that shit works, but it it amused me at the least. It made me feel like I was doing some some James Bond shit.

22:59

Alright. Last one, inspire hope. This is where you go back to me and say, look, we got other options, but we want you you make that happen? Can you get your deal? Can you get your offer a little stronger here, here, and here? And it's time sensitive. Look, like, we have this other offer on the table. They're not gonna sit around and wait.

Alright. Last one, inspire hope. This is where you go back to me and say, look, we got other options, but we want you you make that happen? Can you get your deal? Can you get your offer a little stronger here, here, and here? And it's time sensitive. Look, like, we have this other offer on the table. They're not gonna sit around and wait.

23:13

So if you can get us something, we can we would like to work with you. We think you are the best fit, but obviously, you know, a burden hand. This is a really good offer. And, you know, I don't wanna blow it for my team by by sitting here hoping you guys come around.

So if you can get us something, we can we would like to work with you. We think you are the best fit, but obviously, you know, a burden hand. This is a really good offer. And, you know, I don't wanna blow it for my team by by sitting here hoping you guys come around.

23:26

You know, you need to to use the the leverage from one deal to get a a better deal.

You know, you need to to use the the leverage from one deal to get a a better deal.

23:32

And then you sell entirely. So you need to do the if you have your due due diligence stuff ready, you need to make sure that the closing terms are clean. You need to get a good lawyer and a good accountant

And then you sell entirely. So you need to do the if you have your due due diligence stuff ready, you need to make sure that the closing terms are clean. You need to get a good lawyer and a good accountant

23:41

Don't, and don't burn bridges because deals fall through and you may need to go back. So make sure you communicate properly even when you say no to people.

Don't, and don't burn bridges because deals fall through and you may need to go back. So make sure you communicate properly even when you say no to people.

23:49

And, do everything with, with, sort of, integrity and grace because,

And, do everything with, with, sort of, integrity and grace because,

23:53

many times deals have fallen through. We need to go back. When we sold the milk road, it was a Somebody we had rejected last minute,

many times deals have fallen through. We need to go back. When we sold the milk road, it was a Somebody we had rejected last minute,

23:59

but we didn't burn the bridge and they didn't burn the bridge, and we came back, you know, later. And we said, hey, still interested. And, yeah, they sure were. And there you go. The advice I got here was, but for my deal, Dula, was this is when you need to sprint the hardest. So normally,

but we didn't burn the bridge and they didn't burn the bridge, and we came back, you know, later. And we said, hey, still interested. And, yeah, they sure were. And there you go. The advice I got here was, but for my deal, Dula, was this is when you need to sprint the hardest. So normally,

24:13

an entrepreneur gets a term sheet. It's like they wanna relax. Finally,

an entrepreneur gets a term sheet. It's like they wanna relax. Finally,

24:17

look at this. The big number. I'm gonna be rich. This is awesome.

look at this. The big number. I'm gonna be rich. This is awesome.

24:21

And they take a moment to relax. You can't relax here. This is where you sprint the hardest to close. You cancel everything else. You just spend all day following up with lawyers, data room,

And they take a moment to relax. You can't relax here. This is where you sprint the hardest to close. You cancel everything else. You just spend all day following up with lawyers, data room,

24:32

your accountant, making sure that all your ducks are in a row, solving any problems,

your accountant, making sure that all your ducks are in a row, solving any problems,

24:36

along the way.

along the way.

24:38

Lastly,

Lastly,

24:39

celebrate. Make sure you celebrate,

celebrate. Make sure you celebrate,

24:41

very often. The whole process is so stressful that the the main feeling is just relief. Think that's common. But you wanna let that relief aside and then have the joy and the the the pride that you, you did something kind of amazing.

very often. The whole process is so stressful that the the main feeling is just relief. Think that's common. But you wanna let that relief aside and then have the joy and the the the pride that you, you did something kind of amazing.

24:52

And so,

And so,

24:54

I don't know if I have any other slides left. Okay. Remember,

I don't know if I have any other slides left. Okay. Remember,

24:56

some some tips here.

some some tips here.

24:59

The great advice I got. Birds fly, fish swim, and deals fall through. That's what they do. Just remember, deals fall through that is completely normal for them.

The great advice I got. Birds fly, fish swim, and deals fall through. That's what they do. Just remember, deals fall through that is completely normal for them.

25:08

You can't get emotionally too high too low. The second,

You can't get emotionally too high too low. The second,

25:11

deal momentum is everything. If you have a conversation going, the the speed with which you follow-up and you get them the materials and you you move forward, is everything. Momentum is everything when it comes to deal making. And last thing, one choice is no choice. If you only have one person that could buy you, one company that's gonna buy you, You have essentially zero people that will buy. You have zero leverage, so you need to have multiple choices. One choice is no choice.

deal momentum is everything. If you have a conversation going, the the speed with which you follow-up and you get them the materials and you you move forward, is everything. Momentum is everything when it comes to deal making. And last thing, one choice is no choice. If you only have one person that could buy you, one company that's gonna buy you, You have essentially zero people that will buy. You have zero leverage, so you need to have multiple choices. One choice is no choice.

25:35

Alright. That's it.

Alright. That's it.

25:38

That's the master class. Let me know what you thought about that one. Drop comments,

That's the master class. Let me know what you thought about that one. Drop comments,

25:42

on YouTube. So that's where I read them. So go to go to YouTube. My first million. Hit the thumbs up if you like this. Subscribe to the channel. We're over two hundred thousand subscribers now. That's amazing. If you guys like these, I'll do more of these. They're not easy to do these master classes. Right? Like, it ain't easy to to drop these kinds of bombs. But if you guys like it, I'll make an effort and I will try to do more of these,

on YouTube. So that's where I read them. So go to go to YouTube. My first million. Hit the thumbs up if you like this. Subscribe to the channel. We're over two hundred thousand subscribers now. That's amazing. If you guys like these, I'll do more of these. They're not easy to do these master classes. Right? Like, it ain't easy to to drop these kinds of bombs. But if you guys like it, I'll make an effort and I will try to do more of these,

26:02

until I'm all out of knowledge. And, and then I'll then I'll stop and just go retire.

until I'm all out of knowledge. And, and then I'll then I'll stop and just go retire.

26:07

So Let me know if these are worth doing and,

So Let me know if these are worth doing and,

26:10

your compliments fuel me to do more. Alright. I'm out of here.

your compliments fuel me to do more. Alright. I'm out of here.

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