Built to Sell Radio

There are four types of financial buyers who might make an offer on your business, and more often than any other type, the one approaching you is an independent sponsor. It is an unhelpful label for a group that raises the money for a deal only after the seller has signed an LOI, which is also when the seller's leverage is at its lowest. 

Travis Jamison runs Capital Pad, where investors fund independent sponsor deals. He sees dozens of them for every one he approves. Independent sponsors are now behind roughly 28% of lower middle market acquisitions, which is more than traditional private equity does.

One day, you're going to sell your business, and when you do, you'll experience a step function increase in your net worth. Navigating that moment is something Adam Katz has spent his career helping owners do. He spent twenty years at Merrill Lynch as a Private Wealth Advisor to ultra high net worth families before he and his team left in 2018 to build KORE Private Wealth, an independent firm that grew to five billion dollars in assets. Just four years later, they sold. His new book, Making the Zeros Count: A Field Guide for Decamillionaires, Centimillionaires, and Billionaires, distills what he's learned into a playbook for owners who come into sudden wealth. 

Katz says the greatest benefit of wealth isn't what it buys. It's the freedom of never needing anyone again. Not your clients, not a boss, not a buyer. He argues that kind of independence is impossible to understand until you're on the other side of the deal, which is why, even after decades of coaching founders through liquidity events, he admits he is still adjusting to it himself.

If you own a company, chances are you're its best salesperson. Put you in a room with a prospect and you rarely lose. But listen to your employees try to tell the same story and something gets lost. You've tried hiring salespeople. You've tried training them. The selling keeps landing back on your shoulders, and when it comes time to sell, an acquirer will see it too. Expect an earn-out or an equity rollover, golden handcuffs designed to keep the rainmaker locked in. 

Here's what most owners miss: you have a built-in advantage no salesperson can replicate. Your founder story defines the enemy, the problem, and why you built something better, and you tell it instinctively because you lived it. A new rep who tries to recite your story will sound like a fraud. The fix isn't better sales training. It's giving your team professional positioning, and nobody on the planet knows more about positioning than April Dunford. She spent 25 years as an executive at seven B2B technology startups, companies that were acquired for a combined total of more than two billion dollars, and her books, Obviously Awesome and Sales Pitch, are the standard playbooks for explaining why customers should pick you over the competition.

Jeff Church co-founded Suja Juice in 2012 with $300,000 and a green juice that had a four-day shelf life. Within three years, the company hit $70 million in revenue, and Coca-Cola and Goldman Sachs invested $150 million at a $300 million valuation. Then, two weeks after Coke flew its entire North American management team to Suja's plant, they passed on the option to buy the rest of the business, leaving Jeff with $40 million in maturing debt and a company losing $9 million a year.

More owners than ever say they are simply tired. A look at 10,255 PREScore™ assessments over six years found that 17.5% pointed to burnout, not retirement, as the number one reason they want out. 

So the question went to two people who spend their days on the buy side, valuing companies and deciding what to pay. Lee McCabe is a private equity veteran who advises PE firms on the businesses they acquire. Jason Swenk built marketing agencies and spent time acquiring them. In this episode, you discover how to tell whether burnout is a signal to sell or a problem worth fixing first, and how a buyer prices the difference either way.