Ep 479 Exit Story: How to Attract a Fortune 500 Acquirer With Brock Weatherup
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Hi there, and welcome back to another edition of Built to Sell Radio, the podcast designed to help you punch above your weight in a negotiation to sell your company. And I'm the executive producer, Colin Morgan. Have you ever dreamed about selling your business to a Fortune 500 giant? Now for most founders, it's the ultimate validation and the biggest payday. But how do you actually make it happen?

Today's guest, Brock Weatherup, has the answers. He's done it three times, selling companies to heavyweights like PetSmart and Petco. And in this episode, he shares how to get noticed by Fortune 500 acquirers, why owning more of a smaller pie can often pay off bigger, the risks of investor preferences and how to protect yourself.

Now, if selling to a strategic acquirer is part of your exit strategy, then this episode is for you. Without further ado, here is Brock Weatherup. Enjoy. Brock Weatherup, welcome to Build to Sell Radio. Excited to be here.

You've been a prolific entrepreneur. I've got Pet360, Petcoach, Great Pet. A lot of people will be familiar with those brands, especially if they have a pet. Sold to Petco and PetSmart, big brands that everybody's heard of. So we've decided, we were talking a little bit before to do this interview as sort of a...

a landscape of your entire career, which is pretty spectacular. So thanks for doing this. Oh, well, thanks. It's, I love the world of building businesses and I've been lucky enough to be lucky in it.

Well, I'm sure there's probably a little bit more than luck there, which we're going to dig into today. Before you got into pets, though, you started a business called or co-founded a business called Fathead, which has got a peculiar name. I'm dying to know what you did at Fathead and how that all ended. Yeah. So Fathead was a business where we create a pretty dynamic brand in the sports and entertainment world. So what very quickly the business was

If you love Tom Brady and you're a fan of Tom Brady and you wanted a life-size cutout quote unquote poster of Tom Brady, you want to stick it on your wall, that's what we sold.

and your dynamics of your Pittsburgh Steelers fan or your New York Yankees fan or whatever, or Toronto Blue Jays, whatever way it might be like, you know, those sorts of things were always in that sort of dynamic. And we created a direct to consumer brand that was, you know, frankly challenging people about like, how are you fan enough of your team? And if you're a fan enough, then you should have one of these gigantic things on your wall. So joined that and was a part of that. We kind of went from zero, a hundred miles an hour,

kind of right out of the gate building this really interesting brand, which was a lot of fun. And in those sorts of dynamics of how do you get consumers to be motivated to spend a hundred bucks on basically a piece of vinyl. How did you, how big did you get Fathead before you exited? We were in the high $30 million of revenue after

Two and a half years, almost three years. This is a rocket ship. Zero. It exploded. Look, you're building on the back of kind of decent brands like the NFL and the NBA and the NHL. And so you have a lot of dynamics that really help you kind of get from here to there. But we got, you know, I'll use lucky a lot and I use working hard to get lucky and you can't get lucky without working hard. We'll talk about it another time. But

you know this was you know we hit a vein and it really kind of connected with people that you know the sort of like i think you want to be a real fan and kind of one of the cool things was also the the stars of the sport really loved our product because it was them in their finest moments life size

without anything because we die cut around the image so if you had a you know go back to tom right if tom brady was making a pass we had a picture of him all by himself and we would create a die cut around him so you would see none of the background none of the it would just be him in his like finest glory like he's not hawking potato chips or selling insurance he's

playing the game that he was so good at and that would be on your wall. So, you know, that created some fun dynamics there for sure. And you're doing rev shares back to the lead? Yeah, you have different sorts of programs. I learned all this when I was there, which I, you know, maybe I should have learned more of it before I dove into it, but the whole world of kind of commissions and how do you have kind of licensing fees and what does that look like and learned all of those kind of very quickly on

how do you navigate that? So it was a percentage of revenue of anything you sold was the rights to, you know, what you had to when you sold a, again, uh, uh, you know, a, a, a Tom Brady, you had, you know, a certain amount that went back to the NFL because of the logo of the new England Patriots at the time, right. Or a certain percentage of revenue that actually went to the players association and thus to Tom Brady. So that's, it was kind of the dynamic of the structure. Um,

And you were a partner, you had equity in this business? Yeah, I was the CEO and co-founder of it. So, um, it had been, you know, a tinker, I'll call it kind of entrepreneur had kind of created the idea of doing large scale die cut, uh,

high definition printing was not an easy thing then. It's a hell of a lot easier now, just with the pieces with it, but grew that business and had it going very well. And the primary capital behind it was a couple of folks that were

obviously kind of very wealthy. They had built Quicken Loans. And so one was Dan Gilbert, another guy, David Katzmann, who had owned the Cleveland Cavaliers, which allowed us to get into the leagues a bit easier. And so they were combined to the majority owners of the dynamics. And that was what got us to be able to get going with a decent amount of capital pretty quick. And you mentioned there was a bit of a fork in the road recently.

where there was an ethical dilemma when we talked before hitting record, you read some sort of ethical dilemma, maybe describe what happened. Yeah, we were. So this was, so this would have been fall of 08 or summer of 08. I tried to raise capital to in essence, buy them down as owners to make them minority. There was some dynamics between the two primary owners that was causing issues in the business and long story for another day, but I wasn't,

I wanted to figure out a way to put the right investment in the business with the right type of ownership and the right sort of dynamics with it and went through the fall of '08, literally my first day of my roadshow going out to try and raise the money, which was going to be a lot of money, was in New York City when Lehman collapsed, literally that Monday. So not the time to be walking around New York City with your handouts like, "Hey, invest a lot of money in a premium product

that's a luxury item, like, yeah, that was not great. But, you know, worked really, really hard just figuring out how to do it and got an investor to the finish line with it. And we were literally a week-ish away from,

signing and wiring. We went to a Cleveland Cavaliers game to kind of celebrate. That's a benefit of having the owner of an NBA team. And during halftime, me and my CFO and a few other folks with our new potential owners or majority owners were in the luxury suite, everything else. We're sitting, talking down below and

Dan Gilbert walks in and basically says, "I'm sorry, guys, the deal's over. This isn't happening. I don't want to do it." And then that's all he said, turn around, walk back out. Okay. He was the guy who's going to be selling your share. Yeah. And it was like, okay. You know, it just killed it. Fast forward, that was probably call it November, maybe October, November. And then

So, okay, so that stopped that path. I mean, it didn't really change the business. I was trying to solve some dynamics that made me leading the business difficult, but

still was kind of navigating it. And then it was like, okay, you know, we're going forward. And the business, which was not a, not necessarily the easiest business to manage and run. We did basically 80% of our revenue in basically eight weeks leading up to Christmas. So not a way you'd ever want to run a business, but like, you know, the rest of the year, you're kind of like holding on to get to Christmas and then you got to hope you didn't land it right at Christmas.

And so we had a great Christmas season like usual. We kind of get to basically New Year's and New Year's Day. Now, mind you, again, this is the end of 08 going into 09, right? The bottom of the market was March of 09. Oh, by the way, much of the money that was coming into this was from the mortgage loan industry, from Quicken Loans. So it was a tough place and learned the lessons

rules of kind of what is ownership, what are signing authority on bank accounts and things like that. And got a call from my CFO on New Year's Day, 2009. And she said, she's like, "Brock, what happened to all the money in our account?" I'm like, "What do you mean, having all the money in our account?" And she's like, "Well, we have $0 in our bank account." I'm like, "What do you mean we have zero?" Like, this is right after Christmas. That's when you have all, you're flush with cash. You also have a lot of bills you got to pay, but we're flush with cash.

And like basically was all swept and I was like, like what what what transpired and the next basically four or five weeks were probably one of the most difficult four or five weeks of my entire career.

As you know, was trying to like, where's the money? Is it going to come back? There were promises of like, we literally, I'll never forget, like probably three days later, I had our team put together a special promotion to hopefully sell some more product because I wasn't going to be able to make payroll on Friday.

because there was zero, literally zero dollars, not close to zero. There was literally where to go. It was swept because, oh, by the way, in the mortgage industry market, if you had $10 million or whatever, you could leverage it like 100x, right, to

And so capital, other things were again, super dynamic world of what was going on in the mortgage loan sort of world. So I think there was a factor of like gathering all this cash so that it could be leveraged for, again, things were cratering in the mortgage world. So I mean, like whether you could say it's right or wrong or different, but all of a sudden it turned into like, okay, how am I going to make payroll on Friday?

And then so we made payroll by doing a promotion and then, OK, two weeks to the next payroll. But you got a whole bunch of people to pay bills. I'm reaching out to I never actually talked to Dan Gilbert, but talk to his team. But it kept being like, oh, it's going to come back. It's going to come back. And so I started like.

having to say to vendors, like, you know, after a little bit, like the payment's coming, the payment's coming, the payment's coming. And so by the end of the month, as you can imagine, no money came back. So just all of the money to pay out wasn't. And so I was I was starting to lie and I was starting to not tell the truth. And

it was brutal. Both to like, I didn't know what to tell my team. My leadership team, I was 100% open with them. So kind of your first tier group, I'm like, guys, like,

we're going, I can't, I'm not, I'm an open book for better or for worse. And 100% honest. And I just, I couldn't, I couldn't not until we're kind of going through all of it. And it finally manifested itself and where like, I didn't know whether I was being an endurance to the money coming in or what, but like, I couldn't,

I couldn't be responsible because it was my name and it was my sort of, you know, my reputation. And that's the one thing you can actually control. And so I literally had finally had a meeting on the book supposedly with Dan and his team. And I had my resignation letter in my back pocket and I

You know, it was going to basically like, I can't do this anymore. And they, and I, look, I was fighting like hell. So, you know, and I was starting to, I'll say cause issues because I, like it was wrong. And I left a message for Dan and his team and wrote an email that was not flattering about the situation. So, but I played that message also for my entire leadership team. So they, they weren't wondering what I said to anybody. It was like, this is actually what I said. You heard me say it.

Just because people interpret things however they want. And I was like, this is likely going to get me fired or I'm going to resign. And sure enough, that happened and I got fired. I got walked by...

bunch of the dynamics. I got walked by his security guards very publicly through the office to my desk, to be escorted out of this company that I built. It was awful. It was absolutely, absolutely awful. And on the drive home, I'll never forget, I called my wife and she'll tell you the story, but I was like, "Hey," and she knew this was going on. So there's a big difference of it might happen and it does happen.

And she was literally like in the car going to the preschool where our basic, our preschooler was at school and she was going to be the, she was the, she was the special reader for the day. Like, Oh, I got fired. I'm coming home. Anyway, it, it,

Horrible, horrible situation, but the importance of having or the value for me of having an incredible partner in my life and my wife to grab me when I got home and my family and friends that were around me to be like, okay, we're going to figure this out. But it was awful. And I had invested a lot.

on a percentage basis of my liquid capital into the business. - Yeah, so I'm curious about, so I understand your job ended as CEO, but what happened to the equity that you had built in the company? - So I had invested $300,000, which for me was a gigantic sum of money.

And again, my liquid, we have our house and stuff like, you know, gigantic sum of my money, probably 50 plus percent of my liquid, if not more. And so I invested that and then I got a meaningful chunk of ownership, like 10% ownership of the company. I got a check about six, well, what would have been about 10 years later after that for my ownership and my $300,000 that I invested for $9.26.

So I don't mean to laugh, but really? Yep. I actually could go through my files and pull out the check and show you. It was literally $9.26. And they were cleaning up the cap table because the business had $95 million worth of debt on it. Anyway.

you know, I don't, I don't actually know what happened behind all of it. I don't actually know anything's going on, but like, it was just, it was just, it was a horrible, horrible situation where I had to make the choice of, do I keep lying or do I, and, and, you know, kind of throw my reputation and my own personal sort of ethics and morals out the window, or do I fight for what it is and know that there's a huge risk of what that would do. Now,

I look back on it and I'd say it was an incredible launchpad to something unbelievably amazing out of it. But that's the optimist in me. At the time, I was not in that sort of situation. So don't get me wrong. But all of a sudden, I'm now in Michigan. It's spring. It's literally February of 2009. The housing crisis was particularly damaging in Michigan. The economy in Michigan was crushed.

I didn't have a job. I was a startup CEO of something. And what was I going to do? And I lost a ton of money. We had renovated part of our house, but our value of our house was down, I think, 30% by the time we were... I mean, it was a disaster on every front. I was like, okay, what do you do next? Luckily...

you know had met um you know in the effort to try and basically get some folks to be investors in the business had met a lot of what i would call kind of consumer middle market venture capital firms because they were going to be the potential investors and i must have impressed a few of them because when you know that all kind of went down and it got blown up um

I received a call from a number of them to talk with them about different sort of opportunities. And that's what, you know, jumped me into the pet industry when I took a job at what was Pet Food Direct that I turned into Pet360 in Philadelphia. So let's, what a story. I mean, unbelievable. Let's get into Pet360 a little bit because this business you joined as...

and presumably at some point you built up some equity in it. It was, uh, it was, it was pet food, direct.com. Um, not hard to remember or imagine what pet food direct.com was, um, early days, Amazon, early days of things that chewy didn't exist, those sorts of things. Um, and you know, so I joined there, it was a business doing slightly less than 20 million in revenue. It had lost seven, 8 million bucks the year prior. Um,

And so not in a good situation at all. And, you know, the investment group that was in it was looking for a new CEO and they kind of reached out to me. And, you know, at first when I talked to him, I said, there's no way in hell I'm taking this job because it's a disaster. I wrote a little

a memo dating myself, but an email of like, here's all the things that need to be done. And their response to that was, okay, we'd like you to do that. What would it take to get you? And then today they brought me in. And so, you know, and my whole deal was like, hey, look, 18 months, let's figure out there's a business model here.

I need money to do that. But after 18 months, then we're either going to put lipstick on the pig and go figure out what we can get for it. Or like we're going to go out and raise some growth capital and really grow the business. And luckily and wonderfully in that 18 months, um,

just focused on people, focused on execution, focused on the model. And we figured out that there was a business there. And so at the end of the 18 months, we went out and we changed the name of the business to a company called Pet360. We launched a media business with it, with a brand called PetMD, Think WebMD for Pets.

And then we went out and raised a growth capital around of almost $20 million to kind of grow and drive the business because it had a meaningful opportunity to get there. And, you know, I had gone through and transitioned a lot of people out and a bunch of people in and

tried to do my best to, you know, kind of get great people to do great things and give them the tools to do it. And we found a way to get there. Eventually, four or five years or four years later, five years later, you know, we were approached by PetSmart to be acquired because PetSmart did not have an online. We were about a hundred million of e-commerce and about 10,000

$15 million worth of media revenue. And at the time, PetSmart was a, you know, I think six, sorry, $6, $7 billion business, but was doing, you know, less than $50 million of online revenue at the time. And we were doing $100 million. And so they went to kind of, they approached us and acquired us and went through that process.

Before we, I'd love to go through the PetSmart acquisition, but I'm just curious to know how your, how the shares, how they structured your equity compensation in Pet360. We're all about selling equity. So that's the reason why I'm asking, were you able to, when the middle market VCs came

said, Hey, can you come run this for us? You didn't have a lot of negotiating leverage to your point. The house was down, the market's in a tank. You've just come out of this terrible situation. Were you able to negotiate some options or some equity or how did you structure? I got into some equity, you know, in kind of how the structure of the investment, there was an investment of some money, obviously before I got there to get it to that point. Um, and that created a structure. I, um,

I didn't understand at the time what a term participating preferred means for an investor. Can you describe that? Yeah. So what that means is if a so this was a the dynamic was a two times participating preferred. What that means is if you are an investor coming in and you invest in.

$10 million that you are in essence guaranteed $20 million at the when there's a sale of the business or liquidity event out of the business.

And so and then everything else gets allocated after that. So if you have just to make the math easy, right, if you have $100 million valuation and you had $20 million invested in at a two times participating preferred, you would basically say you'd have $100 million minus $40 million. So the $20 million times two. And then the value of the business that's paid to shareholders is actually $60 million, not $100 million.

So I did not understand that at the time, but I learned, but you had options, had kind of equity in it and, you know, own kind of a 5% ish sort of, you know, dynamic with it from an options base and everything else.

And when we finally ended up getting that point to an exit, we sold it for about $200 million. And that was great for our investors. Look, it was wonderfully just for me and I didn't know of what it was.

I would have expected in some respects, in retrospect, a lot more as a personal outcome of it because of this whole participating preferred, the structure of equities, all the things that went along with it. And so, you know, the things that you learn in the dynamics of how do you structure your equity? How do you structure the cap table? How do you structure voting rights? How do you structure all those sorts of things that are much easier learned after you've gone through them than before?

So this is super helpful for our audience because many will be considering raising money. And this idea of preferred shares is something they should be very mindful of for sure. So in your case, the investors, these middle market M&A folks had participating preferred shares of the 2X. So they got two times their money before the common shareholders and the options holders in your case, right?

would be entitled to anything. And so that washes out a lot of the equity in the event of a sale. Got it. Okay. Interesting. And at what point in the journey did you learn about this participating preferred

share structure? Like, was it on the final? - It was exactly on the last days where you are, when you sell to somebody that on a large scale, like a large strategic in this sort of scenario, obviously there's like teams and teams and teams of lawyers. But the one thing you do have to do as the CEO, you have to sign off on the flow of funds. So, which is, okay, we're gonna write a check for $200 million. Where does that $200 million go?

Right. You know, typically in that sort of scenario, there's a 5% or 10% hold back for, you know, potential sort of issues. So, okay. And I've got 200 million, I got 180 million that, that, that, that, that, that difference of money will get paid out eventually in the same flow. But what's the waterfall? Like what, what pays off the debt? What pays off the other things? What,

what goes to the institutional shareholders that have participating preferred, what goes at that, what goes to then shareholders at what, you know, what are the volume of those and what types of shares and what are the terms. So if you have preferred versus common, is there a preferred A, preferred B, common, you know, like there's different structure of all those sorts of things. And then you get into the calculation, okay, if you give away options,

Okay, well, if you're selling at X, then okay, well, okay. My point being is it kind of goes through the whole thing. And it was interesting, when we ended up getting officially closed or getting to point of closing, we're literally wiring the money on Friday and it was Thursday. And I got some feedback from our folks at Petsmart and they're like, we can't close the deal because the numbers don't match. I'm like, what do you mean the numbers don't match?

So there's a flow of funds memo, which is a certified thing that you have to sign as the CEO, which is a very legally binding, very important document. And then there's the spreadsheet. Right. And those two things, exactly how they all come together. And they were off by 26 cents.

But they have to be perfect. It can't be off. And granted, it was a whole lot of calculations with a whole lot of half pennies with a whole lot of things. And like, but it had to be exact. And I was like, I was like, okay, you got to be kidding me. Like 26 cents. Like, okay. You know, I'm just like, just take it out of mind. Like, fine, like whatever. And they're like, well, we can't do that because you have, again, you have a legal signature. So I get it. And so I'm like, so, oh,

"Oh, okay, well we'll go check and we'll just..." I think so, yeah. Literally ended up going back in with my CFO and like in this gigantic spreadsheet with so many characters, like I found like four times back in what I was being paid on it, literally did, it literally added into a cell minus 0.26. And I was like, "Oh, we found the error, everything's fixed." And then they wired it on Friday.

But learning the waterfall and what those things look like, you know, it's always different. It's always less than what an entrepreneur or CEO thinks it's going to be. I'd say 99 out of 100 times, that's not what you think it's going to be. Doesn't mean it's not great. Doesn't mean it's not amazing. But I'll call it clean math thought process. I own 10%. I'm selling it for 100 million. So I get 10 million. It never works out.

It might mean you get eight, which is fantastic, but it's just different. So in your mind, you know, negotiations heating up, your pillow talk with your wife talking about the deal and what this could mean for us. You've gone from

a house that's worth a third less and losing your 300 grand. And I'm assuming there's a lot of pillow talk at home saying, hey, this could be really important for us. Like financially, there could be like a big event. Like, so what's the delta between the pillow talk number and the actual number?

Do you know what I'm asking? I'm saying like, if you thought you and your wife thought we're going to get $100, obviously it was more than that, but I'm just using that as a round number. What did you end up getting? How big was the erosion of the actual number?

Well, you know, it's especially on the first one. It's a little bit funny money, right? Because like now, mind you, you know, my wife and I've always lived kind of within our means. And oh, by the way, like five years prior to that, like we'd had our kind of rear ends kicked by the exit of FedEx.

where we kind of lost our shirt. So something more than nothing was great. Yeah, totally. A huge amount of it is like, what is your expectations going in and what does that look like? And so I think to your question, I think it depends what your mindset is when you're going into how much that affects you in that sort of pillow talk sort of dynamic, right? We were just happy to have a path out

Right. And it gets somewhere because we had had such a brutal experience from a from a number of different things that caused some real change in our life that we didn't really want or the timing that we wanted. And and part of the story that also goes into it when we were when we were selling to PetSmart, we had signed a deal July, July 1st.

And then two days or three days later, so an LOI, right? And it's a public company, so it's binding. Two days later, it was announced that an activist investor had taken a stake in PetSmart. And so I learned what the world of activist investors are and how much that throws boardroom conversations into turmoil. Okay.

How did that affect your deal? Well, so we had 30 days to get to definitive docs, right. And, and sign the deal. And so, so we were kind of, you know, so it was like, you know, I got a call two days later from when, when this came out, the CEO from PetSmart called me and said like, everything's fine. Like, it's all good. Like, I'm like, okay. You know, I didn't know. I was like, you know, I didn't know what, what the thing was. It's like, okay. Like, but he said, everything's fine. It's all still going to fine. Everyone's rolling through again, teams of lawyers everywhere, figuring this out, putting it all together. We're

We're about a week away from where we would sign. So pretty much everything has been figured out. So myself, my leadership team, it couldn't go below our leadership team because it was a public company. And so you couldn't have public information. So my leadership team all knew what they were getting paid as part of the deal. I knew what I was getting paid, which is what everyone pays attention to, right? And what are those things that come out of it? And I get a call from the CEO of PetSmart a week before we're supposed to sign it. And he says, the deal's off.

And I'm like, excuse me? Like, what do you mean the deal's off? Like, we're done. Like, we're there. And he's like, well, the activist investor, a bunch of things. Like, we can't do the deal. And I'm like, well, what do you mean we can't do the deal? Like, we're like, now mind you, underneath it, we had been, the process had taken very long, which went, if you're selling to a large strategic, it's a very long process. It's not like, it's not like you call up somebody and negotiate a deal and you're done. Like, it was months and months and months and months of

And so we had gotten a bit like too far out over our skis in terms of debt and other things like that.

And so we were in, you know, we needed to sell, if I'm being honest with you, like in order to kind of where we were in the business or we were going to have to do some drastic things. So I got a call and I had the deals off. I'm like, what do you mean the deals off? Like, are we, we're like seeing other people, but we're going to get back together. Like, are we like, that's it? Like, I don't know. I don't know what the scenario is. And, you know, and he goes with the deals off. Like, we can't do this. And I was like, so I got off. I'll never forget. It was a Friday night.

I literally like, it was, I was talking on the phone as, as the sun was going down. And like, I remember like literally like by the time my wife came into the, into our living room, like it was a dark room. And I was like, literally just like, like my head was down, my hands were on my knees. Like it just was like,

what am I going to do? You're the CEO of this business and again, your leadership team is all, they're already writing the checks. They're already cashing the checks, excuse me. It's meaningful. It's meaningful to me, but a little bit less for me in the moment. Yes, it was about me. I had lots of feelings, but most of it was like, oh no, what are we going to do? We've got hundreds of people in our organization. What am I going to do with this?

We're in debt. We've got a problem. So, and I was like, I didn't talk to anybody on that Saturday except my wife and actually my family. And cause I'm like, I don't know what I'm going to do. Like, I literally just don't know. I don't know what we're gonna do. Like, I can't, I, I,

And you got to be a leader. You got to figure out a way to step in and do something. Doing nothing helps no one. And being a withering, crying, bumbling idiot is not going to do anything either. And so I called a couple of key folks on my leadership team and our investors, our primary investors on that Sunday, which was not a set of fun conversations to say the least.

Um, and then Monday morning it was like, okay, like what are we going to do? And over the next, basically.

what went on being 10 days, I pulled my leadership team together. We did an offsite and like the outcome of the offsite was like, we're literally going to have to lay off 30, 40% of our team. We're going to have to like do all sorts of things that were really ugly, really not great. So I might be sharing this like, well, okay, well, how did it end up that the deal got closed? So after 10 days of this, and mind you, we had put the board deck together that we're going to go over kind of that was a Thursday, that following Monday.

But I was like, okay. I literally had it in my inbox for about a year. I never actually hit send because... So that was a Thursday night. We were done. And it was a brutal deck. Like the deck you never want to send. I didn't, I guess. But it was sitting in my inbox. And then...

The next day, you know, got a call from back from the CEO of PetSmart who said, hey, we'd like to do the deal. I'm like, okay, well, wait a second. Like, first off, I'm like jumping out of my skin excited about it. But I'm also like, okay, wait, I went through this once. Like, well, I'm not going to go through this again. And we just went through this brutal 10 days. I mean, brutal 10 days. And I'm like, well, what does that mean? Like, what are you talking? He's like, well, he's like,

You know, we were announcing our earnings on Tuesday. This is Thursday. So we're announcing our earnings on Tuesday. So we'd like to put it in our earnings announcement on Monday night. So we would get it. I'm like, well, I mean, it's like we were. Yeah, you're most of the way done and finishing all the documents. But we didn't get all the way there. And usually the last issues are the big ones that are hard.

And so like literally in two days, so through Friday and Saturday, we got all of the rest of the documents done together, signed, I mean, Herculean effort on, and, you know, basically we needed it done by Sunday morning because it needed to go through the whole legal process of public company filings.

And so, you know, Sunday night, we were in the path of, okay, like we're getting this deal done. We set up stuff and we announced it went out. It was announced publicly and to our team, our broader company Monday night that the deal was happening and everybody was happy. Did you ever find out?

what changed with the active investor? Did, did they agree to go forward? I don't, I, uh, no, no. I think it was an agreement to actually then like what the process was to take PetSmart private. So what I didn't understand was going on also behind all of this was that there was discussion of PetSmart being taken private. Um, and they needed a digital, they

They needed an e-commerce strategy to maximize their value. So what ended up happening was after they closed the deal with us, like a month later, like I'm in conference rooms in Phoenix, like talking to the TPGs and Blackstones and others to

sell, do an $8 billion deal to sell PetSmart to take it private. And I was representing the digital strategy of it. And I think it was just some confluence of that. Like, I'm never going to know. And I honestly, in some respects, I don't really want to know because it was just like,

It's a wound I don't want to open up again to really understand because it was, I mean, it was brutal. It was brutal on every front as a leader, as a human, as a person, as somebody who cares about other people. But it was brutal. You know, when you're going from, hey, everyone's going to make a lot of money. Everyone's going to be great. Isn't this going to be wonderful too? We're going to fire half our staff and this is going to be like, you know, a total mess for a long time till we get it cleaned up. And, you know,

Here's where we are. What advice would you have for an entrepreneur who feels kind of stuck in the middle between being loyal to their employees and managing up to an investor? So you've gone through this twice and maybe additionally other experiences where you've got a team who has joined you, is loyal to you, who

So, you know, in the case of Fathead, it had nothing to do with the money being swept out of the account. But at the same time, your majority shareholder was doing something that you didn't control. And in this case, PetSmart makes an acquisition and then they rescind. And again, you've got a team who is impacting.

I've seen this done in two different ways. One, you know, great leaders engender the loyalty of their team by being truthful and saying, hey, it's, you know, it's them, not me. And they shoulder, but sometimes lose credibility over the long run when that keeps happening to them. Equally, I've seen leaders sort of

Say the party line and say, you know, what PetSmart wants you to say to the rank and file employees, but lose loyalty to the rank and file employees because it just looks like a stuffed shirt who, you know, is just basically recounting the party line.

How do you thread that needle between keeping your employees on side and loyal to you personally while something's happening externally while not undermining your relationship with the external party? Do you know what I'm asking? Yeah. I'll answer it twofold. The first side is don't raise money.

Avoid it at all costs if you can. Doesn't mean investors aren't great. You know, Pet360 wouldn't have gotten where it was without it. So don't get me wrong. We needed it. We wanted it. Fathead wouldn't have launched without it. We needed it. We had to have it. So there are reasons why you need to do that. And so I luckily didn't need to do that with either of kind of both Petcoach as well as with Metamorphosis or Great Pet.

And I would encourage everyone, like, don't go for the, you know, the TechCrunch headline article of raising $100 million.

Like, or whatever it is, like, just don't, if you can't, because then you just, you bring more voices into the room, which then creates challenges exactly that you were describing around what does it mean to be a leader of your team? So that's kind of, so if you can do it without the capital, great. Or if you can do it with capital on your terms, as you understand how to handle that over time, then great. So that's part A. That being said, most companies need capital. And so if you're in that sort of capital dynamic where you have other people that are

Everyone's doing their job, right? The investor that's in your business, with all due respect, doesn't really care about their business. If they're doing their job well, they are making sure that their investment in you makes money, period.

they can say all they want but that's their job and if they're doing their job really well they're making a lot of money for their lps not for the employees of the company not for you not for but again i don't blame them it's just what you just got to recognize what people's priorities are the one thing i would always say what at least worked well for me is i kind of kept going through these and as i learned with a lot of a lot of bruises and bumps and lots of stuff was just you know being

genuine and being transparent without transparent to a fault, which is a little bit of a hard or not as a hard balance to be like, but being genuine of caring and being transparent with it. Like if you don't know, don't know. If you're saying a party line, say it's your party line. It doesn't mean you say that to everybody, but like you say it to your key folks and

that are especially your leadership team, if you're the CEO, like, you know, I would always find in my organizations also who were key, I would say kind of key influencers using a term of today, but more like who are people who kind of

guided or shaped the culture of your organization. So that could have been the marketing manager or the finance accountant, or it could be your head of operations. I mean, like all different levels, but like who are those people that you would kind of like, okay, like they're the ones that give me the pulse.

of what's going on and how do I stay close to them and how do I stay transparent because they are who would kind of permeate out any sort of feeling about what was going on. And that was a very effective tool that I learned over time to just identify those people and bring those people close to you. I mean, it was genuine because you cared about them, but they were the barometer of how the organization went on something.

Got it. Yeah, that's super helpful. So you come through this PetSmart experience and you've got some money in your jeans and you basically fund, self-fund your next business, Pet Coach. Maybe describe that for folks. Yes, I had an opportunity. There are a couple founders who had put this very early stage kind of thing and it was an opportunity for me to kind of basically buy it.

And by buy it, meaning it was like, you know, a million and a half bucks, which is a lot of money. So don't get me wrong. But and, you know, I really liked them. And we had an opportunity to do something really interesting. And I was super impressed with them all the way along. They are the two key folks that were part of that are now very close friends till today. I actually had a call with them earlier today. Yeah.

What did the business do? The business was telemedicine for pets. So if you were a pet owner and you had a question about your pet, most things around pet owners are not urgent. Like, hey, if your dog gets hit by a car, like don't go online and start searching, like take him to the emergency room. But most of the stuff is my dog's lethargic. My dog's itching a lot. My dog,

whatever, like those are kind of more less urgent sort of dynamics. And so this was it. So it was telemedicine before telemedicine was, I guess, cool or acceptable.

And it ended up becoming more of a teletext sort of thing. So people would send information. We had vet texts and vets kind of respond and that created a whole content sort when, when things like SEO really mattered in the world. And it really worked like we published those things and it created a very large, um, sort of audience and dynamic business. It was fun. Um, and, and, you know, we, we, we created a pretty gigantic audience very quickly. Um,

and it worked and that, that kind of raised the interest of Petco. Um,

because they were looking to kind of turn around a bit of their sort of digital presence and who and what they were. And so the CEO of Petco, who I had known, kind of reached out to me and said, hey, we like what you're doing and we'd like to bring you and your team in. And part of it was what we had built. Part of it was also to be a influence on the culture and the future of what Petco could be.

And so I came in and part of the deal was for me to be kind of the chief innovation and chief digital officer, which I was intrigued by. But the other part of it was also that the other co-founders hadn't put any sort of money in the bank and they had young families. And so it was an opportunity for them to get that point where they got something for all of their hard work.

I had had some, I probably would have stayed with it longer to kind of optimize that part of the outcome. But being a C-suite executive at Petco is a fairly lucrative opportunity to be in also. And so there were a lot of dynamics that were at play there. And oh, by the way, let's be realistic, Petco is located in San Diego, which is not the most horrible place to have to live. - From a guy from Michigan. - And so we were...

we were doing that. And so that, you know, that, that, that all worked out and worked out great, but it was, it was a, it was a great opportunity to do that. And, you know, and thought I had learned a lot by,

when we sold to PetSmart to where I became the chief digital officer of PetSmart for a year, again, for the take private, I think. But like, I thought I knew what I needed to have at Petco to be successful in that role because I had done it very similarly before. I learned a lot and did a lot better at Petco than I did at PetSmart for sure. But I also had a whole lot that I did not because I, you know, realizing that I'm not the best big company person.

And I needed to kind of find a different way to be successful in that sort of environment and learned a lot on how to do that in a different way, which takes a different set of skills, different sorts of dynamics, different sorts of humility, different sort of learning, whatever you want to call it. And I was not prepared for that.

Want to come back to that? We just did a great episode with a guy named James Ashford. He sold his company. He's a startup guy, entrepreneur, pure-bred entrepreneur. Sold his company to Sage, the big UK accounting software, and does a great job of describing the difficulty of working in that large enterprise context. And so it's something that we've talked about on this show before. Just before we leave Petcoach, just the economic –

Describe the business model, the customers paying per minute they are on the phone or is it a subscription fee? It was free and it's there if you were willing to wait for a 24-hour turnaround time, you could pay to accelerate that to make it urgent. And there was a couple of things like that. And then we created a whole lot of media around it. So we knew that you were asking a question about your dog itching. Okay, could we have an anti-itch service?

shampoo, be a sponsor of some things around it. Not we wouldn't integrate it, but we'd have it around it. And that sort of communication with you as a pet parent on what your needs are at that moment. So we're hearing some very targeted stuff in the early days of high quality targeting.

And you mentioned the two founders, you bought the company for a million five, but they hadn't had a liquidity event yet. Wasn't that their liquidity event there? I basically invested, that would be a better way of saying it. And I bought a bunch of their equity. And so they still owned a decent chunk. So I forget the exact number. So these aren't 100% true, but I bought 51%.

The cash went into the business. Yeah. Yeah. Yeah. Yeah. That makes sense. And so when Petco bought Petcoach, did they roll equity or did you all get cash? Yeah. And, you know, it was...

different decisions that you make like uh you know we we when we when we did that like there was a cash and stock sort of deal so it's kind of half and half um i actually we signed the deal when they got more of the cash and i got more of the stock um that was a very bad decision on my part personally from a financial perspective why it was a uh it was well both because it went in it went as equity into a private company um

And that company then went public, which was great. So Petco went public. I was like, oh, fantastic. There was some money that came out, but not remotely at the level of what it was. And Petco stock has not been particularly great. Like it went public at, I think, 16 bucks, went up to 28 bucks. It's now at four bucks.

And as it's while I still have a decent amount of ownership there, it's actually buried inside this sort of the private because when you go public, only a certain amount of soul. But I don't have any I didn't have any control over my ownership in the private. So I get money whenever that entity decides to sell or liquidate anything. And so what was worth a lot or then worth a whole lot more and is now worth basically nothing or

next to nothing sort of thing is, you know, that's just kind of how the flow goes. Did you have the option to get liquid at that point or? No. It was like, no, we want you vested in this. Well, again, it was this mix of, well, again, they were part of like, there's a little bit of an aqua hire-ish also of our team. Like they created appropriately structured. It was like, hey, how do we keep you here for a period of time? And so, you know, we had that.

And it was, again, it was the right deal, right time. Like, it was the right thing for them. Again, like, they're good friends that we're doing business with still to today. And so they have actually made me a lot of money later after that that has nothing to do with that deal, but because I did right by them at the time. And they're doing right by me. And we, if you...

yeah financially at the moment the math doesn't look good for our relative me selfishly over time in life um it's been far more valuable than if i had made the other decision and like it's a hard thing for people to believe in and understand and to look at it but like you know it was very real to me and very real to the situation of kind of how it's all played out at the end of the day

Yeah. Yeah. Makes total sense. Talk about great pet, because this is one, again, you founded, I think, and self-funded that is the most recent exit. What's great pet. Yeah. So, so that was, um, so it's actually the only one that I would say like was truly started at zero. Right. So the other ones I came in, there was a germination of an idea and then I took it over to made it to whatever it was. Um,

I left Petco, didn't know what I wanted to do next. I left Petco because I realized I was not on the corporate side of things.

And, you know, luckily had, you know, had a position where I could make choices because of luckily the financial outcome of those sorts of things that had happened before then. My wife was like, wait, what are you doing? What you're getting paid this really nice salary at Petco at a very high level. And oh, by the way, you're saying that the job isn't that hard. You're not working very hard. You find it easy to look like you're working hard and things are working and you just quit.

And I'm like, yep, I did. So wait, and now this next thing that you're doing, we don't know what it is. And you're actually not making any money, actually quite to the contrary. We're actually going to put money into it. So you have a job. So you're buying yourself a job instead of getting paid in said jobs. Anyway, but, you know, the opportunity was.

you know, could I get a group of people that I really that I'd worked with before that I loved working that I thought were super talented against an industry that we knew, aka pet, and do that, you know, kind of day one was, you know, seven of us, you know, within that within those other seven, I think, four of them had worked for me twice before, and the rest had worked for me at least once before. And

And we're like, we literally sat down like, let's create a business. And we did. So we created content and product. We're an Amazon reseller. We had a bit of a media business. We kind of tried a bunch of things. It was fall of 2019. And so we were...

distributed team before COVID. And then when COVID happened, we were still a distributed team and the pet industry was very good then or still is. And so that kind of led to that sort of piece with it. And we had a great we had a great run for for a bit.

And it was awesome. Again, full control. There was nobody else involved. Again, my whole thing, don't take money if you don't have to. We did everything that we wanted to do. We were very successful acquiring things, starting things, doing things, but we made decisions as a team and that's what we did. And nobody else was around trying to do what we're doing.

you know fast forward to kind of two years into that you know ended up having some unusual things going on with my body physically and that you know was trying to figure out what was going on and got diagnosed with multiple sclerosis and

you know and luckily i had an amazing team that you know was there and like you know went and i besides my wife and my parents they were my leadership team that's group of seven people were the first people to know about it because i was like look i don't like my brain was obviously not anywhere close to the business and like i literally was like guys like look this is what's going on like i am

I am not a CEO right now. I can't participate that way. I'm going to be all over the place. I'm like emotional. I've got all these things. I just trying to figure out when somebody says, Hey, you have a incurable neurological degenerative disease. Like, okay, great. Welcome to the world. What are you going to do now? And you know, that, and my team was amazing. And I was like, look, I'm going to be out for the next month because I can't.

I like I just I'm not I'm gonna walk in I'm gonna be here but don't expect me to actually be here might physically be around but like just know I'm off and they all stepped up and were amazing and then you know a few months later once I started to get a little bit more understanding of what I was dealing with and what that might look like and how it was going to affect my personal life because they didn't get MS I did um and I was like what do we do and so I was like

Luckily, the business was doing great and said, "Hey, well, I'll back off. I'll be chair. You guys run the business and we'll keep doing it that way." They were wonderfully honest and open with everybody. They were like, "Brock, sorry. You don't know how to do something halfway. You're either in or you're out and this is your business. We should sell this, whatever we can do out of it. You need to be out of it if you're actually going to take care of your health first."

I'm incredibly thankful to them for that because they had to make a hard choice in kind of what we were having a lot of fun, by the way, as a team. And it was really great. And luckily, the business was working. But a story that is not normal in the world, like I made two phone calls to two different companies that I thought might be interested in what we're doing.

One said they couldn't because they couldn't, if we had a pet food manufacturer, they would do it. And the other one said, yeah, we'd like it. That'd be great. We had a probably a, you know, maybe half hour conversation about what the deal terms needed to be.

And we agreed. And 30 days later, it closed. The company that you called was who? Was Covetris. A company called Covetris, which at the time was a publicly traded, you know, multi-billion dollar company that was in the pet industry. The CEO, you know, this guy Ben Wolin was a great guy that I'd known for a while. And today I got a great business with a great team and I need to be out. And like, you know, I said, look, you know, it needs to be

you know we negotiated a little tiny bit but it wasn't this wasn't about me i was like look i want to take care of my team we sold the business for 30 million bucks and

which was an unbelievable outcome for a 24-month-old business. So don't get me wrong. And so all the team who took a risk on diving into this, and all that seven that joined, all the conversations with them were like, look, hey, you can come work for me, but you're going to get paid half of what you're currently getting paid. You're going to get equity, and hopefully it works. And guess what it did? And it worked really well for everybody. And

But, but, but it was like, and they continued on and I had to be out. So like all of a sudden it was like, you know, 30 days later it closed, it was done. And that day it closed. Like I didn't have a job anymore. Right. And so again, I had to focus on other things, which is fine on my health and stuff. But, but that's the value of people. Right. And like being genuine, being as like how those people keep coming back in your life. If you do that, like, you know, it's, it's easy to call people for me today and be like,

Hey, do you know somebody who knows this? Or can you help me do this? Can you leave what you're doing and do this? I got an idea on that. And it's back and forth and it's genuine in that sort of startup thing. So again, all those sorts of things create different sort of dynamics.

How big was Great Pet when you sold it in terms of either revenue or EBITDA? I'm trying to get a sense of like- Yeah, we were, gosh, we were in the high $20 million or mid $20 million of revenue. And we were slightly profitable, but frankly, we were reinvesting everything that we were making. So it was kind of more, we were managing to zero versus needing to be at zero.

It seems like an unbelievable outcome for a 24-month-old business. It was ridiculous. It was like, wow. Again, we touched on this way earlier, but the reality is we definitively got lucky, but we busted our asses to get lucky. And you have to get lucky. I don't say that lightly because there's plenty of people who've worked really, really hard doing really great things and really executed extremely well.

that haven't had an outcome or haven't been able to create that just and it's dynamics of the market, the moment, the whatever you want to call it, like, you know, things happen. But, you know, and look, there are some people who get lucky that don't work very hard, but it's a very, very, very small group. And then there's likely when you talk to most people who have created exits in their life and through entrepreneurship or business building and logic, they have busted their rear end for a long time and then they got lucky.

or somewhere along the way got lucky. And again, those two things have to work in conjunction with one another. But in your case, you put yourself in the position to be lucky because you had spent the bulk of a decade, the better part of a decade in the pet industry. So you knew, is it Covetra? Covetris.

Covetrous, forgive me. You knew this public company, you knew the CEO, you were on first name, you had all of the downstream benefits to be able to pick up the phone that a new entrepreneur doesn't understand the industry, would not have that. Got it. I didn't start the business because I used my cash.

Right? And that was in risk cash of a meaningful sum. I invested a million and a half bucks in it. Like, okay, that's not a small amount of money. And okay, did that money and a half work out to be great? Absolutely. But like, yeah, you're taking a risk with it. And then again, all those people that came in did the same thing, but they had done things with me before where they saw the value

that can come out of equity compensation, right? By being a owner. And I was, you know, look, yes, I was the primary funding for it, but I was quite generous with ownership because I wanted like, look, this was this...

It was fun. I know I could have made a lot more money in my career by being hawkish about keeping my own, but I also would have had a lot less fun, would have had a lot more, a lot less fun.

uh, kind of gratitude and comfort and positive, like all the things that like, I like being a really, I'd say a happy person because like, yeah, like, you know, doing things hopefully right. And then, I mean, not everything was right and I've made plenty of mistakes and haven't done lots of things in the right way, but I'd like to say hopefully more than not, I've been in that sort of realm and you put your energy into that. And at the end of the day, it, again, it keeps paying off dividends over and over and over and over again, as time keeps going on.

I know a lot of listeners to this show are interested in acquisition entrepreneurship. Have you heard anything about this sort of trend that the MBA students are learning about acquisition entrepreneurship? Is that some model you've heard about? Explain what that means. Yeah. So I think it started at Stanford. I think it's now kind of trickled across most of the big MBA schools. These are MBA kids who...

get a degree in acquisition entrepreneurship, which basically means that they are looking to buy a business out of school. And because most, you know, recently minted graduates don't have a lot of money, they're going to these search funds where backers, you know, are backing them to, and they'll, you know, they might get 10% of the equity in

And then maybe they have a chance to earn additional tranches of equity if they hit certain thresholds in the future. So it kind of sounds a little bit like the Pet360 experience, the fat head experience where you're a minority shareholder, you've got backers and you're kind of building it day to day. And at the same time, they're also considering starting a business from scratch, right? Like you did with Great Pet. Right.

And I'd be curious, I'd be remiss not to ask you since you've done both, what advice you would have for somebody that's at that fork in the road saying, I could maybe...

raise money to buy a business, but I'd be a minority shareholder and I could run it or I could start a business that might be a little smaller, but I don't it. Like if someone's at that fork in the road, what, what questions would you have them ask themselves? Well, it was a few different layers. I think there's the starting point, which is just the, you know, don't, if somebody's trying to build a business to sell it, they're not going to be very successful.

Like if you're building a business to create a great business, you will likely find a way to sell it. And those usually work in a sort of way. So like you have to be excited and enthused and interested in what you are in. You need to be, you need to be want to figure it out. You need to want to work through all the dynamics of how something is a mess and how difficult things are. Like everyone's business plan is wrong or

early in there, any business you put in. It's just fundamentally wrong and that's okay. You just don't know it. You go in and you're like, yeah, I know everything I'm going to do. There's no business plan I've ever put together in iStart that's ended up anything like what it was supposed to. But

It was really important for me to, for what I needed to know, for me to learn, for me to ask and surround myself with great people who knew different skills that I knew so that we weren't all kind of talking in the same echo chamber so that we could create great outcomes so that when you have the things go wrong in your plan,

you have a path to make them right or change the plan and make it better one. Like you need that sort of, so, so one, I would always encourage like, why are you going into it? What are you opening it up? And what do you actually care? Right. Or is this just, I, yeah, I read about it in my MBA class that I should, right. I mean, and that's, that's the thing.

That being said, I was able to go in and do all of these things because I worked in a couple of large organizations and I learned how business works and I learned what was necessary to make a business grow and how those things were going to. And so whether that was my first job at American Express or kind of a good, you know, seven, seven years at what is now Interactive Corporate, I see a ticket master and match and that sort of stuff. I learned a ton.

Like, and that, like the ability then to quote unquote buy a business and do something great with it. And then great. If you want to go start it, like go start it, like go, go, go make a great business and go figure it out. But like, you gotta be excited about what you're doing. And you gotta go into it kind of eyes wide open that you're,

You don't know much coming out of school. You think you do. And oh, by the way, like that, that sort of unbridled enthusiasm or frankly kind of structure of like, you know, you, you, you don't know anything and oh, by the way, like you, you, you don't know anything and you're willing to take risks with it is a, is a massive value at that stage. Right. And there's huge benefits for that. And so how do you, how do you leverage that? And so, um,

And then the last point, I think, to the core of your question is, what's the math, right? Like, what's the math look like, you know, when you kind of get there? Because again, like, you know, I owned a very small piece of a very large outcome or what I, okay, it's,

I think $200 million still is a big outcome. - $200 million is a huge outcome. - So I made some in that for sure. I owned 50 plus percent of a deal selling Petcoach. I think we sold it for 15 million.

Okay, well, I made more in that deal personally than I did in the original. So, sell a business for $200 million, make a certain amount, sell a business for 15 million and make a lot more. Like, how much do you own of it? Right? So, again, as you think about it, but doing a business from scratch,

right, that hasn't been started versus buying one, like has a whole other different set of risk. And I probably the single largest thing I'd say to anybody who's going into it, like, you know, the idea that you're going to bat a thousand as a startup is non-existent. So like, it's okay. And expected, frankly, that you're probably not going to succeed in your first business and go into it knowing that

You can't be a one trick pony. You're going to go in, you're going to try something, you're going to learn, you're going to figure out what you like to do, what you're good at, what you are capable of doing, what you're willing to do, where you're willing to take risk, where you're not willing to. And be very open to that. And that then guides you like, oh, I could actually do this. And it's likely how you're going to be in that second, third or if you want to dive into other businesses down the line.

Yeah. We've talked about this idea of training wheels businesses. For a lot of us, we have to get a couple under our belt before we're getting any good at it, you know, which is one of the great reasons to sell early and kind of get onto the next thing so you can learn and, you know. Are you up for a quick lightning round before I let you go? Absolutely. Sleaziest trick an acquirer has tried to play on you in the process of selling a business? Sleaziest trick. Yeah.

It's just that it's frankly, it's the lying or the hiding of things inside the P&L. Like those sorts of things where you're just like, oh yeah, there wasn't anyone, there wasn't a lawsuit thing. I've had some things where we acquired something and it had a trademark issue.

kind of important to disclose. You hope you're covered in this sort of deal. It was a smaller deal, but like, you know, those sorts of things and they just kind of like, oh,

Oh yeah, I forgot about that. You know, you're like, yeah, sure. No. So this is when you're buying a business or investing in one. Correct. Yeah. Yeah. What about selling one? What about on the other side? Look, everybody needs to go into any business that they're going to sell. And you will 99% of the time get a retrade in the last minute.

Meaning I was offering you X, right? And then it was, so like when we sold Pet360, like I think our deal was 240 until like a week before the, you know, kind of, and then it was like when we signed the LOI. So not the whole other story, but like when we signed the LOI and then like right up before we actually signed the LOI, no, it's going to be 200. It was, you know, a board man. Oh yeah. Like, were we desperate? Yeah. Did they know it? I guess.

But everyone does a retrade of something, whether it's a term or a structure or absolute dollar. But they're doing their jobs well if they're selling, if they're buying your business to maximize their outcome. And they're doing their jobs well. And if they're not doing that, they're likely not doing their job well.

Emotional high of selling a business? Is there a memory that when it comes to selling a business, whether it was PetSmart, Petco, to Petco or the great pet experience, is there an emotional high that you recall? Yeah, seeing an extra comma in my bank account.

No, I'm serious. It's things that you dream of. Okay, you're in the thousands of dollars, fine. You never have more than thousands of dollars in your bank account. All of a sudden, it stays there for a day because you want to get it out of your bank account immediately. You try to give them the wiring information. But

No, like, I mean, when that, when the, and look, no deal is done until the money is in your bank. So nobody should think of anything is done until the money is physically in your bank. And you see it and like, that was really cool to like walk over to my wife and be like, look, like this landed in our bank account. And it was, and it added a comma. It was extraordinary. What was her reaction?

I think just kind of blown away that like, again, we're not spenders and all things and all of a sudden it's like, how did this happen? Like we a little bit pinch ourselves still to today, like where we live and what we do and the resources that we do have. And we're like, how did we end up here? Like, is that even real? Like, it doesn't feel real.

But it looks real and you know it's in your Cornwall bank account. You're like, ah, okay. It's a feeling of the unburdening of financial comfort is a pretty enormous feeling. And this all happened also while we had young kids at home. To just not have to worry about

okay, like it's not to eat or have a roof over our head, but just like to just be able to kind of do life as anticipated. Like, you know, look, we don't, we've done well. We don't, we're not flying around on private jets. We're not like, that's not, that's not at all what I'm talking about. Like, okay. Like, yeah, you can buy the house that you want, not what you want. And you can have, you can buy the car and pick cash and not have to care. Like you don't have to worry about that sort of stuff. Or if my,

you know, if my mother and father-in-law need something, we can take care of that. Like those sorts of things are just a, like the amount that that pulls off of your weight of life is, is like the greatest thing in the entire world. Emotional low of selling a business. I'm assuming, I mean, you did a great job of describing the retrade or the, you know, the, the PetSmart example. Was there another emotional low that you, you would point to?

I think it's that you go through the process when you sell a company, especially to a large organization, where you fundamentally realize like you've sold your baby and you this thing that you've put your heart and soul and personality and everything that you have into is no longer yours.

And like, it's not, there's not usually, there's not usually like a seminal moment for that to be a reality, but it's like, it's like chips away and chips away. And then all of a sudden you're kind of like you're three weeks after the deal's done and you're working in your quote unquote new company and your quote unquote new role. And all of a sudden you're like, oh boy, like I've got to ask somebody else permission to do that with the business. And it just really, um,

it's probably something in the world of your like really damaging to your ego really damaging to your control dynamics or those sorts of things that like you know entrepreneurs like to be in control that's a big part of usually the personality dynamics of it like

Just realizing that like you, it's not your, it's not your child anymore. And you got it like somebody else is raising it and it's really hard. Like that is, it's a very difficult sort of emotional sort of low point and everyone hits it. Everyone gets there and you kind of like,

Like when my team did that, like there's all there's always a lunch or a dinner or a visit to the bar on a Friday night where it's like everyone kind of like gets together and you kind of toast to what was. And then you move on. Right. I mean, OK, like what do you think about that sort of like cathartic sort of like, yeah, OK, like we did this, but now we're not in that anymore. Yeah. New face. Did you buy yourself a trophy?

You mentioned you're not really a showy kind of guy, but tell me you bought a car. I did. No, I didn't. I'm a big experiences guy. Okay. And I always had the idea that there's a thing called Wide Open Baja in Baja, Mexico, where you can drive Baja race cars sort of things. And I

I had always had it on my list, if I ever created an exit, I was going to take my close group of friends and buddies and we were gonna go do that. And so when that happened with PetSmart, six months later,

The 10 of us went to spend like three days driving Baja cars through Baja, California, and it was epic. So that's awesome. So yes, but not, not in a, not in the sense of like, Hey, here's a, I'm not a car guy. I'm not a, like, it's just not my thing, but, but yeah.

But a great memory. Absolutely. Total trophy on the list of memories forever. Well, I think it's well-deserved for sure, three times through and amazing. You've now...

got a couple of things on the go. I was going to ask you, where can people reach out to you if they wanted to say hi on social media? Maybe just touch on Vetted Capital and what you're doing there and how people might reach you if they were interested in learning more. Yeah. So, yeah, so Vetted Capital, I'm joining it. It's a fund.

venture capital fund 100% focused on the pet industry. I've done a couple of things in the pet industry. I feel comfortable with it. And so we're making investments in kind of like

A, B round sort of growth sort of dynamics and trying to bring myself and a couple of other folks who have pretty deep experience both operationally and kind of functionally in the whole broad pet industry. And so trying to help entrepreneurs be successful, which I'm super excited about. So that's Vetted, V-E-T-T-E-D, capital. And so doing that. And then...

I just recently got involved with an amazing product, but it's in the whole kind of wellness world of protein. It's called Wild Society Nutrition. It's being led by our amazing CEO, a guy named TJ Dillashaw, who's a

you know, world champion UFC fighter. And obviously to, to be a world champion in anything physically, you've got to be pretty darn disciplined about your body and what's going on. And so we have protein powders, protein isolates, you know, kind of different sort of, you know, beef jerky snacks, protein stuff. So anyway, we're, so wild society, uh, nutrition.com. So we're doing that. Um,

If anyone wants to reach out to me, I have the blessing and the curse of having a name that is not owned by anybody else in the entire world. So if you search for Brock Weatherup, it is me. There is no second Brock Weatherup in the world. And so LinkedIn is usually the easiest way. And

And there's one of me. And so I can't ever say, oh, that's not who I am. That's the- Oh, that wasn't me. Yeah, no, that doesn't- That was the other Brock Winter. That happens, but it's- But hey, anyone can reach out to me there. And I love just helping entrepreneurs find their way through. And the process of selling is a difficult, emotional, and also can be a great one. But, you know, just-

having people around you that help you look for the speed bumps for the, you know, along the road that, you know, I think it's always helpful. Well said and what we try to do here. So we're very well aligned. So Vetted Capital, Wild Society Nutrition, we'll put both of those links in the show notes along with Brock's LinkedIn profile. So you've got a shortcut to it over at builttosell.com. Brock, thanks for doing this. Awesome. Thank you so much.

And that's it for today's episode between John and Brock. If you enjoyed today's podcast, be sure to hit that subscribe button wherever you're listening to today's show. And if you want to help support Built to Sell Radio, I'd highly encourage you leave a rating and review either on the podcast platform you're listening to this too on or over on our YouTube channel.

at Built to Sell. Now, if you know of someone who'd be a great fit to be a guest here right on the podcast, you can nominate them by heading over to builttosell.com slash nominate. There, you're going to have a chance to nominate yourself or someone else to be a guest right here on the show with John. For show notes, including links to everything referenced in today's podcast with Brock, you can visit his episode page, which you're going to be able to find over at builttosell.com.

Special thanks to Dennis Labataglia for handling today's audio engineering. And thank you to our community of certified value builders who help us bring our message to you. Our advisors are experts in helping you build the value of your company. To get in touch with an advisor or learn how to become one yourself, head over to valuebuilder.com. I'm Colin Morgan, and I look forward to talking to you again next week.