December 5, 2019

I almost sold Baremetrics for $5m

Josh Pigford @Shpigford

In the past 6 months I turned down multiple $3-5m offers and failed to close a $5m sale.

Full post: https://baremetrics.com/blog/i-almost-sold-baremetrics-for-5m

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    For me, this came at a time where, personally, life was… draining. Outside of work I wasn’t in a great place mentally. I was dealing with some family issues that were consuming every ounce of my mental energy. I was depressed, anxious and the most stressed I’ve ever been and the prospect of being able to sell the company and give myself and my brain a break was very appealing.

    Life is full of ups and downs like this. And since running a company spans many years of your life, you'll almost certainly be a founder through many low periods. I've personally found it tough to make great decisions during those times. It's easy to let your personal mood and health get tangled up in how you view your business and its future prospects.

    When things are going well, optimism takes over and your business can do anything. When you're feeling low, it's easy to get pessimistic. Emotional roller coaster indeed.

    You see, it turns out they’d misrepresented their funding situation at the beginning. They claimed that they had the funds available when they made their offer. That’s key, because I wasn’t interested in doing a deal with someone who was going to have to go out and raise money to do it. But that’s exactly the situation we found ourselves in.

    Ouch! I talked to Ajay Goel on the IH podcast a while back and he went through this exact same thing. He tried to sell his business half a dozen times, and a bunch of times the buyers were people without money who were hoping that they could eventually pull the money together. I think eventually he got burned a few times, then stopped entertaining offers from anyone who didn't very obviously have the funds.

    Kudos for sharing!

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    Your transparency here is incredible!!! Wow! Thank you for being an inspiration to all of us and really showing that it is possible to run a completely transparent startup.

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    I think the lesson here is the seller (or if there's a broker involved) needs to do due diligence on the buyer and ask for proof of funds before proceeding with due diligence on the business.

    After seeing this kind of thing before a few times, although on a lot smaller scale, my guess is it's more common than we'd hope. From having to borrow money from a bank to having to convince a board of investors to raise money.

    Sellers be weary and check on this before the stressful and time-consuming work and huge distraction.

    As a successful property developer once told me: "all buyers are liars".

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    I know some people give me kudos, appreciation and respect for not selling my company. I feel torn about it. A different situation to yours as I've stepped back from day to day stuff. But I still get pulled into things and it takes up precious head space.

    I go through up and downs. Sometimes convinced it's better to hold onto it, sometimes not being bothered, other times just going out of my mind and wanting to throw it out the window. The truth is I don't want to go through what you've just experienced, I just don't have the energy for it right now. Right now I'm kind of plodding along, with my fingers crossed and hoping it will turn out ok.

    I keep telling myself I've done what I can and whatever comes of it will be ok. The best thing we've probably done is set ourselves up personally so that if it does fall flat on it's face, we'll be financially ok, not as well off of course, but ok.

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    It never even occured to me that something like that could happen during the sale of a business. I just assumed an offer was made and that was the end of it. Good information to know and hopefully I'll be able to make use of it sometime in the future.

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    Super interesting to get a look behind the scenes of such a process

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    Great story, thanks for sharing.

    $5M seems like a ridiculously low price compared to your current revenues and growth potential. If you keep growing quickly, you should aim for 10-20x multiple of your yearly revenue.

    Keep going, the story of Baremetrics is not over yet!

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    Thanks so much for sharing in such detail Josh! What happened sucks but it seems like you're in a much better place now :)

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    Thanks for the transparency!

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    Thanks for sharing your story. When we announced that we were starting up Hunter to the press back in 2010, we were approached by a number of investors from within our industry. At the time we felt we wanted to bootstrap everything ourselves... which was awesome from a control and equity position, but not so good when you're competing for talent. As a result we lost out on many bigger client opportunities because we were seen more as a scrappy startup rather than a company that could deliver if given larger budgets.

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    @Shpigford Your perseverance through out this roller coaster ride is commendable. Maybe something greater is awaiting for you ahead. Thanks for sharing your story.

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    This comment was deleted 2 months ago.

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