- How to sell your company.
I know this is gonna be an exciting topic
'cause a lot of people, they think about
what's their exit strategy.
I mean and maybe it's only 15 years down the road,
but at some point, if you have aspirations to sell
your company especially if you're a venture backed company
like I've done.
You know, I've been fortunate to sell
the last three companies that I founded
in a relatively short period of time.
The average is about three years.
But what I wanna share with you guys
is a strategy that I've extracted.
The first time it was completely opportunistic.
The second time I kinda got lucky
but we did some really smart things
and then the last time, it was very much
engineered at the beginning.
Not because I was trying to build a company to sell.
Actually, I don't suggest you do that.
But, it was thinking through what really worked
in the first and second company,
creating a system that I'm gonna share with you guys
so that you can start down that path.
So the first thing I wanna share with you guys
is white space.
If you're gonna sell your company,
you've gotta understand the market
and the industry that you're in
and then kind of figure out three different sections
of kind of categories of companies that would buy you.
Some companies will buy you for your technologies.
Other people will buy you because of your customer base
and kind of the traction you have
and other people might need your expertise
and they're trying to get into this industry and get going
so that's what they want to acquire.
So, usually those are the three buckets
but then in each one of them,
they have white space where
in these big companies, typically publicly traded companies,
they have a vision for where they wanna go,
a product road map, a strategy document,
and what you guys do fills a white space
in their strategy.
And that's what you want to find out.
Now, it's not like these things are published online
but you can identify some players.
I like to kind of figure out like five to seven
for each category
so that'll work out to about 21 total companies.
And then try to get to know
the people within those companies
and figure out if those strategies work.
When should you start doing this?
Right at the beginning.
When you start your company,
you should make this list.
Because a second tip I wanna share with you guys
is the 21 people.
You know, the 21 people of those seven companies,
really there's three people, stand with me here,
there's three people you gotta think about
when you're selling your company.
There's the CEO, the Corp Dev guy,
and the product manager.
The CEO is obviously responsible for setting the budget
and strategy, are they gonna buy you.
The corp dev guy, the corporate development person,
sometimes the same as CEO, is responsible
for actually acquiring your business.
So there's a person's full time job is to acquire company.
The product manager, the third person,
they're the most important person.
They're your internal champion.
They're the ones that are gonna decide
should we buy or build this thing
and are you the right company
that they should acquire if they're evaluating other ones.
So, if you think about it, if you do that strategy mapping,
you get 21 companies and then you really distill it down to
seven really high potential potentials.
Then, for each one of those, there's three
and I call that the 21 people principle.
There's 21 people in the world
that are responsible for potentially a huge outcome
for your business and if you could
build that list and strategically, over the next three years
go to the events where they might be at
and reach out to them.
Talk to them and build those relationships.
I think, from a outcome point of view,
there's probably nothing that could be higher leverage
than doing that activity.
So I wanted to share that with you guys.
The third thing that I think is
really important to understand
is how you get in contact with these people.
You know, like, why would they respond to your emails
or aren't they competition?
For a lot of these, they might be competitive
in a sense that if they're going there
and you guys are billing something in that space,
it's competitive.
But what I like to say is, you know,
big companies, Google, Facebook, LinkedIn, et cetera.
Like they are huge tankers.
It's really tough for them.
You guys might go into your office
and on a Monday change strategy 180 degrees.
Trust me, big companies,
we're talking at least a 12 month cycle
if not 16, maybe 2 year strategy maps.
You know, they're not gonna just quickly do that
so what I suggest you do is teach them to connect.
Teaching to connect,
that is the way that you can approach them.
And you might say hey, I notice you guys are
maybe going in this direction,
here's our company.
Here's what we do.
And I would love to come in and teach you guys
how we think about this process
because what you're doing,
if you're going in to teach them
as you're explaining them or demonstrating
that you're a thought leader.
That you have deep domain expertise in this area
and that if they were going to acquire a company
down the road, you'd be the right person
because not only do you understand it,
but you taught them and I think that's a really strong
position to be in because you wanna get
those relationships going now
so that in the future, if at some point,
you have one of them or some other company
you didn't even know about
approach you to potentially acquire a company
that you could quickly go back
to those other 21 people
that you already have relationships with
and start the process.
That will give you a three x increase
and potential outcome because you're not starting cold
and that moment.
You actually have warm introductions.
These are people you know
and they already know I can trust you
because you've taught them things.
So that's my strategy at a high level.
The white space, the 21 people,
teaching to connect that'll allow you
to potentially sell your company
and have a huge meaningful impact on yoru life.
That's what I would wish for everybody watching this video,
If you have aspirations to exit your business.
That's the way I think about it.
It's how I advise all the companies I've invested in
to do it as well.
I hope you found this video useful.
I'd invite you to like the video
as well as leave a comment
with any questions you might have.
I answer all of them.
And I also want to challenge you guys
to live a bigger life and a bigger business
and I'll see you guys next monday.