Built to Sell Radio

Brandon Wade was 25 and three years into a career at PricewaterhouseCoopers when his father called to ask if he would come home and help him run the family's propane company in southern Illinois. The business had five employees and was still handwriting checks. Over the next 19 years, Brandon bought his way from 15% of the equity to 51%, grew to 7,000 customers and $10 million in revenue, and built the largest independent propane distributor in the state.  Propane is about as close to a pure commodity as it gets, and the private equity firms circling the industry priced it that way, at roughly five times EBITDA. In 2022, Brandon sold the operating business to four members of the GrowMark network of farm co-ops for 9.5 times, keeping the real estate for himself.

The traits that make someone a great entrepreneur are the same ones that get them into trouble once they sell. Optimism, conviction, the belief that any problem can be solved with enough effort. Those instincts build a company. Pointed at an investment, they lose money.  Justin Donald has seen it happen to exited founders again and again. Justin built a mobile home park portfolio that covered his cost of living by 34, wrote the Wall Street Journal bestseller The Lifestyle Investor, and now studies how single family offices allocate serious money. He joins John Warrillow for the latest After the Deal episode of Built to Sell Radio, the series about making the most of life after a sale while avoiding the biggest mistakes founders make once the money lands.

Have you ever considered how you would tell your employees you've sold your business? It's one of the conversations most founders fear. You hope your employees will be happy for you, but you also worry some will view you as a sellout.  Dr. Michael Filosi experienced the entire spectrum of reactions when he told his 35 employees he had sold his dental practice, the biggest in Adelaide, to private equity. While he had some congratulations, he also had one team member walk out saying "that's a bit disappointing," and another who wouldn't meet his eye for three days.

Lior Pozin started AutoDS to run his own eBay dropshipping stores. The software finds trending products to sell, tracks supplier price and stock changes, and fulfills orders automatically so a dropshipper never touches the inventory. He bootstrapped the company for eight years, keeping the bank balance at zero on purpose, and grew it to 200 employees and more than $20 million in annual recurring revenue. Along the way he turned down a $38 million private equity offer one day before signing, and still ended up selling to publicly traded Fiverr for roughly $55 million in cash plus a $36 million earnout.  In this episode of Built to Sell Radio, Lior walks through what made him kill the private equity deal, why he chose Fiverr over higher bids, and how the earnout changed the way he ran the business.

Jim Fitzgerald bootstrapped Taradel from a spare bedroom into a $30 million direct mail company. In 2016 he took the business to market, and the five buyers who made it to an indication of interest all offered roughly 4x EBITDA, about half of what Jim had in mind. He had spent years reinvesting every dollar in growth, and the market told him growth alone wasn't enough.  So Jim rebuilt his company around profit. He started pulling cash out of the business so it couldn't be poured back in, and built a leadership team that could operate without him. When he went back to market, 120 teasers produced nine indications of interest, seven management presentations in two days, and a low eight-figure sale, all cash.