When life changing money, isn’t…
My journey to enough, why I turned down an 8 figure offer for my company, and whats next for Seer.
Background that might add context if you don’t know much about my company:
I Bootstrapped it(no investors, didn’t even run up my credit cards), I am the 100% owner (no partners), we have ZERO DEBT, Every year we’ve been profitable.
I turned down calls from tire kickers all the time (saw you in the inc 5000, wanna sell?), but this one time a good friend asked me if Seer would be interested in an acquisition by his company, that I respected a TON. So I took the call, what a ride it was…
That led to me getting a generous offer for my company, that would have left me after all fees, lawyers, taxes, bonuses, etc with 8 figures in the bank and the ability to earn a considerable amount more in the 2 year earn out. Yeah that wouldn’t be a bad “exit” for a dude when went to school to be a teacher and whose dad brought home government cheese, but I still said no…here’s what I learned in the process…broken down into 3 sections, this is a long one.
1 — How I accidentally set myself up in the strongest negotiating position ever. And my blueprint for how you might want to consider putting yourself in that position too.
2 — How I learned what my true values are, how they were tested, w/ some thinking points for you to find your own “enough”.
3 — Once you turn down an offer, now WTF does that mean for you, your team, your company?
Get your super powers ready, how I accidentally put myself in a majorly strong negotiating position.
Coming from NOTHING is a super power
Feeling others pain, helps build up your protection against thinking you have real stress / problems. Most entrepreneurs have the ability to get a good job after their business failure, that was comforting enough for me.
My dad brought home a brown long rectangular cardboard box of free cheese from the government, I hated when he brought that home. I knew what it meant, he left our middle class town to go back to the hood, where he’d pick up “Guv’ment” Cheese. Knowing people who live that way and being close to them impacts you in ways you can’t imagine.
I am hyper-appreciative of everything I have
As such I don’t feel the need to have more than I already have, so I kicked up our charitable giving.
When you see our commitment to charity — I don’t just write checks to charities, I try to spend time with people in addition to writing checks, it helps me to feel others struggle, which helps me be reminded that I have no real struggles (also helps me be a better marketer), whereas hanging with entrepreneurs all the time will lead to you comparing your “struggles” relative to the other rich / privileged people you hang out with.
I guess you can say I’ve always wanted to stay grounded, even as my company “took off”.
The toughest question
What’s your exit number…what a crippling question. At what $$ would I sell the company?
So I started by asking myself how would my life change if I had …
500,000 in the bank
What about 1 Million
What about 5 Million
What about 10 Million
What about 25 Million
What about 50 Million
Seriously, now go back, between 500,000 and 1 million — can you visualize the difference in your life?
Move on to the next one 1–5 million — how’s your life different when you jump from one to the other? Then next and next. You’ll start making up outlandish shit just because.
Then keep doing it, I bet you have a harder and harder time finding things you would do, if you have a chance to sell your company. Hold on to that. WRITE THAT SHIT DOWN!! That is the first step in avoiding the “more for the sake of more” trap.
I tossed and turned trying to figure out, what would I do differently?
Every business advisor said to me, what is your number, the lawyers, the brokers, the financial advisors … whats your number? GRRRRRRRR!
I finally settled on a minimum, 8 figures after taxes, pre earn out which was in part packaged with some of the best advice I ever got from one of my advisors:
Pick a number, and then when that number comes, like a buffalo you find early on a hunt…shoot it. DO NOT allow yourself to hesitate on the trigger thinking, “It’s early there will be more buffalo coming, bigger ones”, only to find that you spend all day realizing that the one you could have gotten you didn’t get because you wanted more.
When you get an offer for your business that is STRONG, financially you are supposed to pull the trigger and shoot it, don’t wait for that next buffalo. That kept ringing in my head.
I eventually FORCED myself to figure this out…
When life changing money, isn’t.
When your dad grows up broke, w/ a drug addicted dad, drunk mother, welfare, etc… you feel like a privileged asshole saying no to a big payoff.
Common statements I heard like…when that wire hits your account, and you see 8 figures, your life is changed forever. Really?
What would I do differently? So I forced myself to do the above, it took me weeks to come up with these two options:
#1 — Buy a house on the beach in Rio De Janiero!
My son’s name is Rio. That is how happy I am when I am in the city.
But then I thought I have a kid (now 2 kids), he’s 2 the other is 2 weeks….eventually they are going to be in school, and then what am I gonna do? Take them out of class every month so daddy can fly to Rio with the family and stay at our beach house in Leblon?
Ok with that out, my next one was…
#2 — Fly private once in a while, that was DISGUSTING to think about.
I fly a lot, and I enjoy it. I also deeply enjoy being with my family, and very few people, so private would be dope. Flying with my family is a little stressful, not much, but 1 nanny, 1 wife, 2 kids, occasionally a grandma and myself for hundreds of hours a year is a LOT. Wouldn’t it be easier to sit on a 6–8 person plane, avoid all the shit? Could I blow through real money that way too, yup. So I would only do it on occasion, 2–3 times a year when the whole family is flying somewhere long (west coast or Europe).
As an AVgeek, I’ll someday try it though. Without my kids :)
Also I suck at getting exposure to something once, and not wanting it forever, do you?
Ever have a great Ribeye steak? Hard to go back to the stuff mom cooked as a kid.
Ever have a hotel treat you like royalty, hard to go back to the holiday inn express.
Ever have a car with all gadgets, only to get a rental w/ no back up camera, or supercharged v8?
I can only imagine that flying private is the same way, and that is scary.
I live in fear of getting used to more and more shit that separates me from most people’s reality, you should too, that is how you start going from “if I could only have a million, to nah I need a billion)
DEBT is the mother of all stress.
Living on credit sucks, fuck balance transfer bonuses. Fuck a mortgage, I don’t have one, I’d rather live in a house I could pay off in 10 years (or completely in cash) than one I have to work 30 to pay off. I’m a financial advisers nightmare, I’ll pay off low interest debt when its not “smart”, why? Because not one financial adviser has yet been able to put a price/value on 2 things — 1, my lack of stress and 2 my multitude of options / flexibility.
The most powerful place to be in a company sale is having NO DEBT and a mentality that you have “enough” and don’t need more. I hate the word literally but in the discussions you can LITERALLY be like can be like pay me X and do these things or I’m not interested cause, I’m Good, I’ll wait.
Living below your means and running a profitable business with a strong future puts you in a powerful, powerful position.
Before Seer, while in college, I ran up my credit cards so high, that I remember putting stuff back at the acme supermarket and re-swiping my card, only to get rejected, return some stuff and come back, swipe, rejected. Whew I got hot dogs tonight.
The sad part is that happened to me, while on full ride at a great University, I wasn’t a poor kid, I was a kid who bought doc martins, went on spring breaks, and bought 80 dollar Abercrombie shorts, dumb ass.
I felt that sting of choosing to be broke. Not because I couldn’t make ends meet b/c I made bad decisions with my finances. I felt the sting of the internal “I deserve a vacation” convos that led to me being broke and stressed for NO reason. I promised myself I’d never go back to that again, ever.
I remember that day my credit card balance went to zero, I felt the freedom and I never went back again. Get something to zero, feel that feeling…then commit to doing that for more and more bills. Find something you can pay off fast, even if the % isn’t the highest, you create no debt momentum and it keeps you addicted to the right thing, NO DEBT.
When I started Seer I had already learned my lesson. So when it came time to buy a house, I decided to buy a triplex and live in the worst apartment in it, it was crappy, but worked. I slept on my college futon (given to me as a hand me down from my brother in law) for 10 years after college before I bought a mattress. When I started doing “well enough” I bought another triplex and moved across the street. Renters paid my bills, meaning I could make less and still live quite well. Eventually at 30 (I started Seer at 26), I decided to move into the city into a single family house.
Today I’d probably buy a tiny house while starting my business :)
Loving your job is a superpower…
Ok, so I sell the company, work my 2 years and then what? I wanna keep working because I’m still mega excited about our company and industry. But I could do my “next thing” I don’t have a “next thing”, I love my work, 15 years in and I’m still waking up excited for the day ahead, building a company to exit means you are focused on the exit, which is fine, I’m obsessed with the work.
Also lets be fucking honest, most of us got lucky on our first thing and somehow think we’re smart and can do it again, so we do a second thing, chasing that dopamine blast again, real talk, it never comes for most.
Every minute you are calculating “the number”, taking meetings with VC’s or Private Equity, etc is time you are not investing in calling customers. Be careful that you don’t run around investing too much time with every tire kicker out there (I get 5 cold emails a month to talk about acquisition, I only took 1).
Build a business, NOT an exit strategy, is another great reminder that leads to minimizing stress, you don’t have some “borrow all this money” then in 5 years I can turn it into X. It creates discipline that is like, how do I make money today or else, say no.
Do the work, chop the fucking wood, carry the fucking water, love the journey. If you can find a way after being “successful” to still want to chop wood and carry water, you have a superpower!! (and when combined with our old friend, “I got no debt”, you have mega super powers), and a lot of power at the negotiation table.
There’s power in not being beat up
I feel like an acquirer can smell a mile away an owner who is at the end of their rope and stressed out, you wanna get a big offer? Look those people across the table and smile big, between having NO debt and loving your job you are basically saying, if this offer isn’t awesome, I have zero reason to even stop this. I still love the work. If you are complaining about the people in your company, how long the days are, etc even for a second, you might see .5–1.5x knocked off of that opening offer. They know you are spent.
Want a great offer? Find a way to love chopping the wood & love carrying the water in spite of the day to day.
What about risk?
If the whole company went to shit a year from today I’d have ZERO regrets. Do I see threats, you better believe I do. But I don’t live in fear of those threats. I could work somewhere and our company’s reputation ensures that my team is in a better position to get a job if this all fails as well. We’ll all be fine.
But the kicker is that I feel like Seer is just getting started.
What do I really value? Seeing a check, moves everything from what I’d do someday, to “oh shit” this is real.
What is your Enough?
On a trip about a year ago I noticed my nanny had a tattoo that says “enough” on her arm. When I asked her about it, she told me, its her reminder that she has “enough” in life. That was so simple, yet spoke so much, at 24 she got a tattoo that reminds her of something most people spend their whole lives never learning. From the moment I saw that tattoo, I started asking myself that same question.
At what point do we stop getting more just for the scoreboard of life not because getting more makes us any happier. More is so often the awards, the first class selfie on instagram, the Tesla in your garage, the organic everything in your fruit bowl to show success.
Then I reflected…what’s enough for me? Do I already have enough? That answer was YES, before this buy out offer came it was yes.
Go. FIND. YOUR. ENOUGH.
Or risk falling into the trap of more, for some scoreboard that will never truly make you happy. To get to your enough when considering a sale, you need to figure out what your number is (there’s a chance you might already be at that number if your company is consistently profitable).
Dreaming small is a superpower
I bought my first single family house for 480k, I bought it the year Seer’s revenue was $1.05 Million, this year we’re on pace to eclipse 17 Million, 2018 20 Million, me…same house, same car. My largest expenses never went up.
I’m not Garyvee, whom I admire many things about. I don’t want buy the Jets, and I can’t find a way to rally my company around me getting richer… Hey can you all work your asses off so I can “fly private” was hard for me to get to grips with.
All I’ve wanted it to live comfortably, I’ve not really “leveled up” my lifestyle as my annual income went up and up and up. That is insanely powerful.
I don’t need external validation of my success, which insulates me from the trappings of “more /get bigger”.
I had that already. So what was the upside?
An offer immediately made me question what mattered and now money wasn’t it, The company laid out a great offer, had amazing technology and an amazing team. I could be challenged in new ways, and their size would have enabled me to bring my vision to more CMOs across the globe. Which I would love to do. So why not sell?
Be inspired by NO ONE, avoid the inspiration trap.
Too many “inspiring” entrepreneurs you look up to are fucking broke.
I can not tell you how many exits I’ve seen where someone just got debt covered, but they don’t say that. They say they got acquired for millions what you don’t know is that for 6 of 10 years they never paid themselves a dime, they have 500k in debt.
You keep taking it in someone’s inspiration, then someday when that person fails, they stop posting as much, you don’t even notice.
Also why are you following Gary Vaynerchuck and Richard Branson, you ain’t gonna be them, EVER! Stop following Jason Fried, you have like a .01% chance of turning your skills into building a product that millions of people have used. Find some “smaller time” people who have made exits that might actually be more like you, get inspiration from them… One of my biggest forms of inspiration, Brad Aronson, you never heard of him right, check out his site, you’ll see why he’s an inspiration. He built a company in my industry sold it and stayed grounded. That practical advice is so much better than inspiration.
More than Money
“Wil, you sound like a guy who is never ever going to sell” — many people have told me that, I disagree.
I love the challenge, a new team with new goals and a new way to push me and my team to be better for our clients. I loved the technology / scale / smarts that this new team (at the company who expressed interest) could bring to Seer, and help us to be a better company.
I love seeing my team members get more challenges, more than just the challenges I can bring @ Seer. I love to learn, and so do most people at Seer — as such seeing how someone else runs their business, could help us run ours better for ourselves and our clients.
The day after you turn down that big money, you gotta ask yourself, was I serious?
Who would be the right match?
I realized that for someone to get “my baby” they’re gonna have to bring more than money and technology, they gotta bring heart. A strong desire to fight for whats right, simple things I’m looking at like equal maternity and paternity, active work on fighting the wage gap, active work on diversity initiatives, I googled and googled and googled the acquiring company’s CEO, their head of HR, and other executives and couldn't find them taking a stand somewhere to use their company as a force on topics like these.
I think someone like Virgin, HubSpot, Salesforce (this too), or Costco (here’s why) is the type of company ethos I seek. Why? They do stuff like those examples on top of being a great company that returns shareholder value.
None of these companies are perfect and neither are we, but at least they have leaders who strive to and seem to take real action to make this world a bit better.
One thing I learned in this process, is Seer is big, and requires a company big enough to acquire us, so I have to rectify that reality with the fact that the types of companies who would buy us aren’t going to be small.
What if we never find the company with the right leadership, team, technology, community impact? Then we don’t sell and I just ramp up profit distribution throughout the team.
Tell your team
So I gathered the team and told them all. You could feel the big exhale in the room. People were thrilled. Yet I wanted my team to now imagine the exit not as a risk or threat but as something that empowers them to have more financial freedom.
Bringing people with me
Well this company has always been about more than making “me” good, but making as many people as we can better off, in 2018 I’ll begin the process of diluting my 100% ownership stake and will develop a new way to share in the profits of the company with the team who’s been loyal and pushing.
This is my next phase, while an exit would have created amazing long term wealth for me, that is the problem. It creates long term wealth for me… I have hit a point of diminishing marginal value of money (feels so weird to say). Money is only as good as the flexibility and options it provides and I have “enough” flexibility and options, and adding more to my life would have made me uncomfortable.
So now, my journey is how can I bring others @ Seer along with me. I’m looking for the people at Seer who say we’re going to take this company from 17 Million to 30 Million in 5 years, watch us, and let those folks take a real chunk in the company that will have real value, the people who go above and beyond and show long term interest in seeing Seer succeed.
If we can get Seer’s valuation to 40 Million…
1 percent of the company is 400k
A quarter of 1 percent is 100k
Imagine if I dilute myself down to 55%, that means there’s 45% for me to distribute, at .25% increments that is 180 100k disbursements. Man, a lot of people could feel more financially secure, if we could get a few people a meaningful chunk of the business.
I want my team to now be thinking, how can we grow this company to get there! We’ll be sharing more of our plan in the future, but I plan on also finding some way to distribute part of the profits along the way.
The next 8–10 years of this Seer ride, should be a LOT of fun, but one where I’m not “the guy”. If I had sold the business it would be easy for me to see opportunities in a couple years to be a t-ball coach, relax a bit more in a few years, etc. So I’ve challenged Crystal to build the organization where I’m never any one person’s escalation point for anyone in the company. I need to have the flexibility to teach a class at a university if I want 1 day a week, or take a class 1 day a week (I need to learn to swim, code, and speak Portuguese), or go visit a client to show them something new I’m working on, just because it would be fun.
Ahhh, so that is it. All the things I learned about myself in this process. It took me 3 months of aggregating notes, writing and re-writing, it required a LOT of introspection. A lot of questioning, and some really deep digging. Glad to finally ship it. Watch the space, there’s more to come.
