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Pain, joy and suffering: how selling my company was just like giving birth.

Guest blog by Kiri Masters. Exited founder of Bobsled Marketing (now Acadia).



Selling a company is like giving birth. At least it was for me.


It was one of the best days of my life. A peak life experience that I’d tell dozens of times to other people and re-live in my own head thousands more times.


It's also traumatic and terrifying. There's blood, sweat and tears involved - and a lot more than you'd think. When the ordeal is finally over, you're flooded with joy. Overwhelmed with a flood of emotions. But it lasts for a moment before you realize that the hard work has just begun....


Hope for the best, expect the worst


I had my birth plan, which like most first-time mothers, I wrote up in la-la land. Sure, I had read books and blogs and everything about the process so I could be prepared. But I chose to believe that my own birth experience would be simple and straightforward - a notion that a midwife confirmed in my appointment the week before. "We'll schedule you in for the induction at 8AM, and you'll be holding your baby by afternoon tea time."


Reality: I had to be induced 3 times and ended up in the operating room.


This sounded an awful lot like my M&A advisor a few years later, who told me brightly, "Now that we have the LOI (letter of intent), we should be able to wrap up due diligence within a few weeks and close the deal by Labor Day." 


Reality: The deal would almost fall apart and take 4 more months to close.


M&A advisors, like midwives, don't intend to mislead you. They know that any number of things could happen in the process, including very undesirable events. But they want to get the thing done, and need to keep you motivated to keep going. After all, some deals and babies come right on time with no complications. Shouldn't we all at least aim for that?


In both situations: hope for the best, but expect the worst.


Learning from others who've gone before you


Although things are unlikely to go exactly to plan, it’s still very helpful to know what you’re in for. Many people going into childbirth learn special breathing techniques, download apps that prepare them mentally and physically for the process, and talk with friends and family about their own experiences. There’s a whole raft of lingo and anatomical concepts that you never knew you didn’t know. 


One thing I did to prepare myself for the sale of the company was to read a lot of first-hand accounts of other people selling their business. I listened to every episode of the excellent podcast Built to Sell Radio and re-read Bo Burlingham's Finish Big at least 5 times. I became very familiar with the process so that I could know what to expect: term sheets, seller notes, LOIs, multiples, you name it. 


It brought me great comfort to hear how others had gone before me  -- both learning from their mistakes, and being inspired by their successes.


Your team


Some people have babies at home in a bath, accompanied only by their partner and a midwife or doula. They manage the pain through carefully practiced breathing techniques. It must be absolutely excruciating. These are brave, strong souls.


Other people (ahem, me) will beg for all the pain relief in the world and feel more comfortable being hooked up to monitoring devices with a rotating roster of strangers getting a good look at my private parts. 


It’s a matter of both personal choice, and risk factors, as to whom you bring in as a support system.


In my case, hiring an M&A advisor and legal team was worth every penny. My long-time accountant was critical too. All three of them were my lifelines in different stages. They all saw me cry and freak out, and they all celebrated when the deal was finally done. 


One thing to keep in mind is that each of these players have a different objective. Ideally, they all balance each other out. 


The M&A advisor wants to get a deal done, and ideally also get the best price for your business too -- since that’s going to be their big pay-day. Consequently, they will be excellent cheerleaders and support systems.  Although they do want to ensure you can comfortably reach any future incentive milestones, left unchecked, they won’t be looking out for all the risks and deal-breakers and things that could affect you personally in the future. 


The lawyer wants to account for every worst case scenario, and mitigate all potential risks to you personally, professionally and financially. They have your back. And not just going through the deal, but they are thinking of ‘future you’ -- how will that non-compete affect your future ability to earn? How will that particular term limit your options in 10,20 years down the line? But left unchecked, lawyers can quickly  kill a deal.


On the medical team, players ultimately have the same goal (a successful delivery) but may still have competing interests. The hospital administrator wanted me to go home as quickly as possible to free up a hospital bed. But the doctor wants to keep me under observation. (Thanks Doc, because I was SO not ready to go home.)


Even with a strong team in place, you need to play an active role. Understanding the sometimes competing incentives within your team means you need to mediate between the players and make the ultimate call. 


You don't have to do it


Selling your company, like having a baby, is something we come to may expect of ourselves, or feel like others expect of us. You hit your 30s and suddenly everyone you know is having babies. 


If you're an entrepreneur, sometimes it can feel like 'everyone is selling their business' and that you should be planning for it too. 


But you don’t have to do either of those things. Childfree people can lead perfectly fulfilling lives. Some studies suggest they are even happier than parents, at various life stages. 


And a business owner can structure their company in a way that rewards them financially and emotionally, without going through the pain of a sale process. 


I highly recommend doing some deep thinking on what you hope to get out of the sale of your business. An excellent resource for this is a short book called Before The Exit, which includes a number of ‘thought experiments’ to examine potential parallel paths before making the leap.


Another potential scenario discussed in the excellent book Built To Sell is that after preparing your company for an exit, you start to really appreciate your company. After building a great management team, solid processes, and reliable revenue sources that potential acquirers expect -- you have suddenly created a business that you don’t want to sell at all. 

 

The deal is done, but the work has just begun.


All my pregnancy I had wondered what it would feel like to hold my baby. And besides making a baby registry, that's as much as I really thought about post-pregnancy life. So when the baby was finally placed in my arms, there was a wave of profound relief and joy. 


But it soon dawned on me that this was just the beginning of a whole lot more work. It starts with sharing the news, then there's feeding, nappies, physical recovery, and some more crying for good measure.


When I sold my company, the feeling of intense relief and accomplishment was fleeting. There were announcements to make and systems to integrate. I had to relocate my family across the globe. There was paperwork to file.. So. Much. Paperwork. To this day I am still getting nasty letters from random States asking why I haven't filed various reports from 2 years ago.


Those first few months were a lot of work. I couldn't sit back and appreciate what had just happened. There was simply too much to do. I was sleep deprived and stressed. There was a lot to do and a lot to prove.


But over time, things would get easier and I started getting more sleep. And I had my prize, which I would be able to enjoy and appreciate for years to come.


What’s next


There came a time when my baby was more self-sufficient. I still had to be present, but I became less and less necessary for daily (or even hourly) survival. It’s a big moment when Granny can take the baby for a whole day. And then he’s off to school, then sleepovers, then summer camps. And eventually one day, my child will pack his bags and move out to live his own life. 


One day, while working at the company that acquired my business, I was ready to leave. I was ready to have an identity separate to the business. I had spent the past 9 years being my business. It was me. But now it fully belonged to someone else. And all my employees were good with that. I wasn't the one filing the company reports, or making the big decisions. I had a job where I contributed a lot, but I wasn't really necessary anymore.


It felt good in many ways, to be relieved of those responsibilities. But I also felt antsy. I do like being responsible for something. I was ready to start over again.


So when my obligations were done, I gave my employer my notice and decided to embark on some new projects. One is called Obsession and it’s a podcast about success and the sacrifices it demands. If you like FounderON, I think you'll like it. 


Forgetting the pain


A friend of mine had a near-death experience while giving birth to twins. While still on the operating table, overwhelmed by the strongest emotions that life can throw at you, she said to her wife, "I want to have another one."


And she did. 


We forget the pain, or at least we realize that the suffering is worth the end result. Along the way, we realize how strong we are, what a miracle life is.


Whether or not you sell your business, as an entrepreneur you have been granted a special privilege: the opportunity to feel the lowest lows and the highest highs.


Enjoy the journey.


Kiri Masters is an award-winning writer and expert in the online retail industry. She sold her retail media agency in 2022. Today she hosts the Obsession podcast, shares her personal journey on Substack, and contributes to Forbes’ retail section. 


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