Exiting

How I built and sold my business in 18 months

Selling a company for big money is an alluring end for many entrepreneurs. Michael Thomas realized that exiting a company is as much about how you built it as it is finding the right buyer
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In January of 2017 I sold my business, SimpleData, to a private investor. In retrospect the process of selling my business taught me more about how to actually build a company than starting it or operating it. In this post I’ll describe how I sold the business, how businesses are valued by acquirers or investors, and the mistakes I made in building my business that hurt its future valuation.

The process of selling my business

A couple days after Christmas in 2016 I stepped into the Elk Run Lodge atop Vail Mountain and answered one of the most important calls of my life. Over the last 6 months I had talked to a dozen people interested in buying my business. Finally we had a deal on the table that I liked. 80% cash and no golden handcuffs. In other words I could sell, transfer the assets and management procedures and move on. After talking about the transition process for about 30 minutes we reached a verbal agreement. Three weeks later, while waiting in line for coffee at a cafe near my office, I checked my bank account and saw more money than I’d ever seen in my life. The deal went through and I was free to enter a new phase of my life.

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Selling my business took a lot of time and effort
Selling my business took a lot of time and effort
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From the first moment that someone at Dealflow, a business brokerage service, approached me and asked if I was interested in selling my business I dismissed it as unlikely. Simpledata, my business, was only a year old at the time and while it turned a good profit every month I never thought it was possible to sell such a simple business. I had grown revenue from $0 to $30,000 per month within the first 6 months, but it always felt like a house of cards ready to fall. In my mind I thought of Hollywood style M&A with billion dollar companies acquiring companies with hundreds of employees. I thought it was more New York black suit and tie than Colorado grey t-shirt and jeans. But I failed to consider a simple fact of business: all earnings have value.

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