Ep 482 Exit Story: Bob Gilbreath — "The Adult Version of the Marshmallow Test" and How to Capitalize on an Earn-Out
01:17:00 Share

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 business. I'm the executive producer, Colin Morgan. And if you're new to the podcast, I'm your host, Colin Morgan.

And in this exit story episode, we dive into what Bob Gilbreth calls the adult version of marshmallow test, navigating the high stakes world of earnouts. Now, while most founders dread them, Bob turned not one, but two earnouts into massive wins, walking away with life changing payouts. In this conversation, you'll hear how Bob structured deals that were 90% tied to earnouts.

motivated his entire team to push forward through aggressive growth targets, and what he learned about the emotional grind of waiting for that second marshmallow. If you've ever wondered how to survive and thrive through an earn out, this one is for you. Without further ado, here is John and Bob Gilbreth. Enjoy. Bob Gilbreth, welcome to Build to Sell Radio. Thanks. Thanks for having me, John.

I am so excited about this interview because we shit all over earnouts all the time. All of our listeners hate them. You know, we talk a lot about how to avoid them, how to minimize them. And you've gone through it twice with two different service businesses. And I think, you know,

had economically advantageous outcomes, which we want to talk about, but also have learned a ton. So I'm really excited to dig in. The first one we're going to talk about is Bridge. So maybe let's start there. Tell us about Bridge and how did this all come about? Yeah, definitely love-hate relationship, but mostly love at the end of the day on these things. But Bridge was a digital agency

Kind of how I got involved there, it was not a true startup. It was actually a company that had been around in Cincinnati, Ohio as a kind of a local do various stuff creative agency since the 70s. Wow. And the owner of the business, he started moving it to digital, had some struggles and the bubble popped and brought in... I was working at Procter & Gamble at the time in marketing with a dream of doing something entrepreneurial someday.

And some friends of mine from Procter & Gamble went over to be a part of his agency to help fix it. And then they called me about a year later and brought me in as a partner with a significant ownership stake of that. And at the time, I think we were 90, 85% of our revenue was with Procter & Gamble. We were kind of like the local low-cost digital shop.

But we saw just a massive opportunity where our clients were starting to add zeros to their digital budgets. And this was like around 2004, 2005. And so something like a Pepto Bismol would spend $30,000 a year with us one year to update the website. Next year, it was $300,000. The next year, it was $3 million.

And we saw that happening and ended up, we had about $10 million, which everyone had told us was the time when you get on the radar of those strategic buyers. We did a process. We did use a kind of a boutique investment bank kind of advisor group that focused on agency sales back then. Ended up having a competitive bidding process, had four agencies in the mix.

We were thought, you know, it was on the one yard line. We knew where we were going to go. And then the lowest bidder before WPP came in at the last second with the winning bid. And we went with them. And okay. So, so let me ask you just a couple of questions. Yeah. So.

How many of you in this ownership group? It was about five of us. There's five of you. So the owner, original founder, and then the four that he brought in. Got it. And then just if you're willing to share, what proportion, like how big an equity piece did you all have, the minority shareholders? Like how significant? Yeah, we did something interesting. We, you know, that kind of our individual numbers were all over the map, depending on when we started and that kind of thing. But-

The structure of our deal was very earn out heavy. So it was of the potential possible number we could get was about $50 million over a five-year period. Okay, let me backtrack. You had competing offers that you didn't go with. Where were they at on valuation? Less, but not significantly less. It was in the ballpark. These are companies that are making acquisitions all the time. So I'd say the numbers were...

Not too far off, but in the millions of dollars difference of that winner, I'd say there. And earnouts were heavier, but not as heavy as this one was, to be honest. So it was more money, but longer earnout.

Got it. Because this sounds, at first blush, an enormous amount for a service company. You're at 10 million, so 50 implies a five times top line. Not a bottom line, but top line. But there's a wrinkle here, right? Oh, yeah. What was the proportion attributable to the earn out? What was the downstroke or cash paid it to close? Yeah. So that was, we only got about 10% upfront. Okay.

of that potential 50. And so 90% was going to be based, was based on both a, that five-year into five-year top line and bottom line number. And to go back to your question on the ownership piece, one of the things we did is we had, because this company had been around since the seventies, there were some dogs and cats over the years, people that came and went and were long gone that had equity numbers. And we actually renegotiated the ownership as part of that.

and said, for those departed people, you're going to get your original share of that upfront money and none of the earn out. And then our team of five said, let's equally split our shares of that earn out number. And we call it the lifeboat strategy because we were, we were all, all of us are going to be key to hitting this big number, you know, over that long period of time.

And we felt equally, we were all kind of friends together and like, we're all going to do well if we split this thing up equally. So if I'm doing the math, it was sort of like this headline number of 50 million. But then when you got underneath the covers of the deal, it was five up front with 45 on the earn out. The five went to the original owners. Yeah, original cap table, we'll call it. Yeah.

Yeah. And then the five of you said, okay, you know, there's $45 million on the table here. Let's go chase that. And it's $9 million for each of us if we achieve the top end. Is that the kind of- Yeah, ballpark a little bit less than that total or individual, but yeah, you got it. Basically, okay. And just to go back, $10 million in revenue, what would you be putting on the bottom line? A little over 20%.

A couple million. Yeah. So the downstroke, the 5 million cash is really only two, two and a half times EBITDA with this huge upfront. I guess one question I have is at that point, it's almost like they're funding a startup. Why not just for the sake of

The baggage. Yeah, yeah. Go start a company if you wanted to. Like, why not just go start a company as opposed to lock into this crazy 90-10 or nothing? Well, I'd say the biggest reason is this was very strategic at the time.

So, you know, going back then, we were probably maybe the second wave of digital focused creative agencies in the marketplace. There had been some high flyers in the dot-com years, bubble popped, you know, things were back down to earth.

And the holding companies were way behind in getting that kind of expertise. So we had that hook in as digital agency of record for several very large brands. And for them, they were not only missing the future, but they were losing revenue. So that money that went to us was not going to them anymore. It was coming away from TV, from print, things like that. And so...

They needed to, and it wasn't just like, hey, this is what we do. We buy agencies. We are way behind in this specific area. Digital. Yeah. And it's so hard to win a client starting from zero or hire a team. They needed that entrepreneurial experience.

you know, skill of the people who had already made the beachheads. I get their, I get their motivation. Totally understood. But what about the five of you? Like you obviously had a skillset that was in demand. You presumably could have just gone out and started a company together without necessarily the baggage of this hold cone. What, what were your thoughts there? Or did it come to, was that part of the conversation? Yeah.

I think the mainly way we looked at it is we've got this amount of time, we're still pretty young here. We've got this five year, we've got a good thing going. I mean, our agency was on fire, amazing culture, great place to work. We cracked the code on so many things. I'd say none of us are really true startup people. We were corporate people who kind of accidentally went into an agency.

And, you know, we've got something good on our hands. If we hit this number by five years, we're going to get a big number guaranteed. I mean, that's the beauty of the earn out is, you know, so many things can happen good or bad. When you say just start a company or raise money, we knew here's the pot of gold and these guys are going to pay it and they want to pay it, you know, because that means they're going to end up with something that, you know, is a great deal at the end of it, too. And it was for them.

So that just kind of like, okay, let's just put our heads down. We grind this thing out that we know we're doing well for five years. We didn't even need revenue from the holding company. They let us alone. Part of the structure of a good turnaround is you're independent. So we were like, we kind of had a big brother there with us, but we got to keep doing what we were doing. And that known incentive was really powerful.

The other four offers that you had, what proportion of the proceeds were cash? In your deal, it was 10%. What were the other ones? Gosh, my memory on the specifics is really, really off on that. But there was some difference in the upfront and some difference in the years. And so I do recall a conversation of one of the options was lower total cash, but maybe a three-year earn out instead of five.

And I do remember the advisors, the bank that we were working with, they kind of gave us the, oh, boo-hoo, you're going to have to stay, you know, before you turn 40, you know, you're going to have to stay extra two years to get this, you know, couple million more bucks, you know. And so, we didn't even really think about why take less. Like, let's just go for it.

But do you recall, I mean, for listeners, for my listeners, when they hear that 90% of your proceeds was locked up in an earn out, they're like losing their mind, right? Like they're going, what do you mean 90%? They've heard of 10%, 20%, maybe 30%, 90%. So were the other deals like the majority of the compensation? Oh, for sure. At risk? For sure. Again, the big difference in why we would even do that

is digital was growing so quickly. You know, like that's the thing of, you know, a digital agency today, it's really hard to grow that. I mean, we were growing 25% a year, you know, higher than that in some cases and maintaining or growing our margins. So, you know, that was something that you got to find those pockets that are experiencing the high growth, I think, to have that kind of confidence to sign up for something like that.

And you mentioned there were two drivers of the payment. One was revenue and the other was profitability. So it was kind of a quadrant or a four by four quadrant where you kind of a slope, you know, kind of calculation. Yeah.

Right. Yeah, I've seen those. So for folks who haven't seen those, visualize like a quadrant or a four box quadrant, you've got a one measure revenue and then another measure EBITDA. And depending on what square you land in, there's a triggered payout. Is that how it kind of worked for you? Yeah, pretty much. You know, we had to hit both quadrants to hit that max.

But it was similar to the growth rate we had been having. We weren't sure where all that was gonna come from, but it was not a crazy slope versus what we were already doing. - And give my listeners a sense, 'cause they're probably gonna have to evaluate one of these things and try to kind of make sense of it. The top end was like if you hit the max revenue and the max profitability, you had this huge payout.

Do you recall the lower end of the grid? When did you step onto the grid? Was it half as much as the full pan? Kind of like the floor, so to speak? Yeah. I think, well, let me put it this way. It's a little bit hard to say that because, remember that, because we hit our max number of both revenue and profit after three and a half years.

Amazing. So we didn't even think about, maybe for the first six months, we were a little worried of hitting some kind of tipping point to be in the money. But it was going so well that we were just like, okay, when are we going to hit the max? And then kicking ourselves that we agreed to a cap on our deal, which if you cannot have a cap, that would be great.

Interesting. So in your case, there was a kind of a max payout. We did. Did they let you go home? No. We did not get to go home. We did relax. I mean, and that was actually, I think, a real mistake. If I could go back to the negotiators on the other side of the table, I would have said, guys, why would you cap the magic? Because we did relax, I tell you. And it led to some, you know, we took our eyes off the ball. The numbers got a little bit worse, you know, in the last year and a half in terms of margin and growth rate.

Because what were we playing for? I think that's something. It's funny, one of my employees, one of my senior employees, he then went and started an agency, also bought by WPP, also had a five-year earn out, no cap on his. And sure enough, they did incredibly well just by having that. That incentive is extremely powerful.

Interesting. So let's go back to the deal structure itself. So you had this bottom line number to hit and a top line number to hit. You mentioned it was independent. How did you or did you make efforts to ensure your independence? Like legally, did you structure it so that you could sort of claim your independence? Yeah. And that's a big, you know, again, one of the big things that

was key for us is realizing that, all right, we've got something that's working. It's good enough for you to buy and you're the experts of buying companies. You've seen everything, done the due diligence, you know we've got something here. And if we've got this big number to go hit, we need to keep the magic going. And so in our negotiation, there were several pieces. I would say it's not a hard negotiation because that's the way that this holding company is used to dealing with companies they buy.

But certainly there are things here and there where, I mean, down to we're not using your health insurance, we're not using your vacation policy,

A few things here and there where he kind of butt heads a little bit on some decision. And it just comes back to, this isn't about us building an empire here. We just need to keep running the business and keep the magic going. So to be clear, things like vacation policy and insurance, you negotiated that up front in the agreement saying we're not doing this. And that was part of it. We're just everything. The default is-

If you guys offer something better, we might use that. But we have the option always to keep making the decisions on this business. What about budget? Because to grow 25% a year, year over year, it does take some...

Oftentimes capital, despite digital growing as quickly as it was. Bootstrapped. Did not get outside capital at all for this business. Customer funding. No. I mean, did you guarantee... Did WPP guarantee a budget and then say, we will... No, no, no, no, no, no. This was on your own. I mean, this is a... A holding company is... And again, the previous CEO at the time, Martin Sorrell, he'd say, this is kiss and punch. We are...

In the mix with all the other sister agencies, you got to fight for business just like everybody else. Now, we originally became part of a group, kind of a legacy subgroup within this holding company that promised us they would be, you know, we were adding to their digital capabilities and they had suggested that revenue from some of their current clients would come our way. We didn't bank on it. You know, we were like, oh, that'd be nice to have.

Fortunately, we weren't banking on it because a week into the acquisition, the CEO of that company kind of made a mistake in client communication and a large competitor to Procter & Gamble didn't like him bragging about now having that company as a client. And we got shuttled off into an area that we would call the land of misfit toys within the holding company. And we were really on our own.

Wow. Wow. Yeah. Because that's always the pitch from these holding companies. They say, oh, you know, we've got all these other brands and you can sell it. But what you don't realize is there's another group of founders equally motivated to hit their earner. Oh, yeah. Basically protecting those accounts. Yeah. Everybody's fighting for every nickel.

Yeah, yeah, yeah, yeah. You wrote a blog post and we'll link up to it in the show notes because I think it was well written and certainly kind of triggered our conversation today. Referring to Ernaz as the sort of adult version of the marshmallow test. Can you just like describe what you mean by that? Well, for those who don't know the marshmallow test, it's kind of a famous now psychological experiment that you can do at home if you have a child of this age, but they take children...

put them in a laboratory room, stick a marshmallow in front of them and say, "I'm going to leave the room for a few minutes. If this marshmallow is here when I return, I'll give you a second one and you can have them both."

If you eat it, you're not going to get a second one. And the test person leaves and comes back and you see what happened. And in the studies, they've actually tracked... What this is trying to get at is do children learn self-control, self-discipline, which is key to our lives, of course. And to forget. Yeah. And...

And they've done long-term studies that say, do the children who pass the test or don't, how do they grow up? And those that grow into adults that pass that test tend to have better outcomes. And so that's what it feels like with an earn out is here you can take the money and you can leave and maybe you could do a lot of other stuff for fun or create other businesses.

Or that second marshmallow is coming. And I think that is a real test. And I don't claim to have any... This could be a fault, by the way. Maybe I should have had the courage to go do something else in some of these situations, but...

You know, it even helps you thinking of it that way to survive because it can be a real grind. You know, when you're struck in this, it's hard enough to grow a business. Sometimes with the parent company, you've got to deal with things that you're not used to. Having a boss again brings a lot of challenges. Yeah. How was life in those times?

early years of the earn out, how was it different than running the agency as an independent company? Well, I'd say in that first experience, my agency, it was very, very similar. The numbers got bigger. There was a lot of changes that we had to make. We invented new departments, shrank new departments. We used to do all development in-house. We sent it offshore. The change was constant, but it was really our business still until the day after the earn out.

And then lots of changes happened. And I was not looking eager to leave necessarily, but when it's no longer your baby, we kind of got then pushed into another structure, had a traditional boss again, had numbers to hit that were different or out of my control. And it became a lot less fun. Got it. So during the five-year earn-out period, it felt similar. You were all in this together. Yeah. For sure. Yeah.

And, and yet in your post, you, you talked about at some point, almost like a

a jailed prisoner as a, you know, like a, a calendar and they put an X beside every day that they've been in jail. You had like 1,268 days as the, as the length of your sentence. That sounds to me like someone who is dreading it would like walking through that. Yeah. I mean, and literally that, that was, you know, I'd be taking a shower in the morning and

How you get through is count how many working days left until you're freed to do something else. And I think that's somewhat the downside of the pressure of there is no other option. We've locked to this, we're counting on each other. We can't let ourselves down. We can't let the team down. But as agency owners know, it's hard. Like I said, we were brand marketers kind of thrust into this thing.

So many, you know, it's not like that traditional kind of corporate job. And, you know, when your team comes in and out every morning and could leave, you know, especially digital focused talent that everybody else wants to steal.

When your clients can fire you for any reason, I got fired over email by clients that we had worked with and spent tons of time in. They'd come in and put you on probation left and right. I mean, it was a struggle. And the type of business is just tough. You're constantly having to... The good thing about digital is it was growing. The downside of what you did changed every couple of months.

So we recreated ourselves as an organization several times, and that comes with lots of stress and pressure. And are we making the right decision or not? How do we create these teams? And we went from 60 people to 400 during that time period. Wow.

And so the five of you were heavily incentivized to hit this top line earn out because you were the five kind of partners. How did you incentivize the next tier down beneath you? I mean, did they become participants in the earn out structure or how did you just- Yeah. Yeah. Good question. First, all employees had profit sharing both before and after. So that was something that was just a great

thing that we believed in. We were completely transparent with all of our numbers, top line, bottom line with the whole company. But we also did see, again, agencies about people. We needed folks to keep growing and keeping their talent there. So one of the things we did is we created a Phantom equity pool for that next layer of leaders. And similarly said, "Okay, guys,

You're in the five-year pool too. Here's an amount of money that you could get. And I'd say it was significantly more than an extra year salary for them. And you have to stay to win. And I think we had seven or eight people in that group. A couple didn't survive the journey. Yeah.

But most did. And it was great kind of having that, you know, we're, you know, we're locked in together as well with that, with that important team. What did you learn about Phantom Equity in the, in the context of that arrangement? Like what would you do differently? How did you structure it? That kind of stuff. I mean, the structure was fairly easy. I mean, and again, we just show them, Hey, here's, here's what it is. Here's how it works. Here's the number at the end of the day.

We treated them as an equal group. So we talked to them together. Okay, you're all in the secret extra group here and you need to compare notes. And by the way, you guys might be inheriting this agency once we're done with this. So this is an opportunity for you to grow beyond just this big bonus at the end of the day. So we created a really neat group within them. We just made it up as we went. So we didn't

What's the rules of Phantom Equity? I don't know if there's any out there, but this was just, you know, we did have to tell them to trust it. I mean, we had some in writing, but it wasn't like a contract that their lawyers were looking at. It was more like this is a promise of a long-term bonus and you have to

Trust us that that number is going to be coming at the end of it. We did negotiate with our buyer to hold some of that money aside for them. And they loved that idea, of course. So some of the 45 million was dedicated to that second function. Yeah. So that came out of them and we just said, okay, let's put that in a special pile there. My biggest mistake is I wish we had included it for more people.

And ended up correcting that mistake, my next one. But it was a great way to keep everybody locked in and eye on the prize. But presumably, had you given it to more people, you would have diluted yourself more. Yeah, that's right. Share the wealth. There's nothing better than having the whole team locked in on that same goal. And we saw it in our profit sharing too. So, I mean, we do that every year and it happens.

here's one week, here's two weeks, here's three weeks. And that was very meaningful for people to pay off student loans and get married or put a down payment on a house. That worked well for them. So profit sharing in this case worked for the broader group, I'd say. But the more the merrier when you have such a big number, I think. A huge target. Yeah.

And just ballpark, how much did you have to grow the agency from the time of the acquisition to the five years in order to- Yeah. I've lost the memory and the records of the exact numbers, but I'll tell you at the end of the five years, we're at about a $45 million revenue business. And you sold at about a 10 million. Correct. So you're almost 5X the business in terms of top line. Got it. Wow. A huge accomplishment.

And a great deal for our buyer too. Yeah. They write a big check if we build a great business. Yeah. Yeah. Yeah. Yeah. Did you ever get the sense that they were hoping that you would leave early? No, because they don't have anyone to run these businesses. That's the holding company model in this case. It has a very small group of mainly finance people sitting in London.

Their whole strategy is basically to be an index fund or a smarter index fund of agencies. And smart leaders go out and try to get a bunch of P&L responsibility and run those businesses. There's not always, it's not necessarily talent that they can't wait. If they tell you what to do, it screws it up. Like that's kind of...

what happens and that's what's happening in some i think some of the you know in the broader you know holding company politics and changes now is some of them are saying oh maybe we need to force some synergies or maybe we need to collapse some of these brands i don't think it's working that great because that's against the business model so they were very much i mean again if there was anything surprising was when we were done they had no plan for us there was no

you know, great. We want to retain you. It was just, Oh, we just assume you're going to keep running your business as you have been. And, uh, you know, we, our brand kind of broke up instead of, uh, continuing to just do what we were doing. And why was that? Like, what was it that triggered you to break up after the year now? Um, I'd say the, the most of it is just want to do other things in life. Um, you know, uh,

And you're racing so hard for so long to hit that. And you're putting aside every other idea, every other dream, hope goes on the wayside. One of our team retired. Another one went and ran a Shakespeare company. Another one wanted to do a startup. So that plus not exactly...

getting a great plan for, okay, we want to keep you guys here. We want to add this under you. You know, here's, you know, we want you to help us figure out what to do with this company someday. You know, in some cases that happens and, but that certainly wasn't set up as, you know, an incentive or a new challenge for us to stay. Yeah. Yeah. In your blog posts, you talked about this idea of like, what's a year in your life worth? And I think if

If memory serves correctly, it was a coach or an advisor of yours who prompted you with that question. And I'd just be curious to know how you think about it because it's a very provocative question. Yeah, I think actually it was something I read on another Substack post of an executive coach who works with other people who have sold their companies and are kind of stuck in an earn out with significant money still on the line.

And I wrote what I did in somewhat responsive. The message there was, well, maybe you should think about your life is too short and you should leave the money on the table. And for me, it's not only the money is real, it could be life changing and give you all kinds of freedoms or opportunities and ways to do many, many good things in the world. But the way I took me my second earn out really to go,

wait, I got to turn the mirror on myself. I can't. This is good for my family. This is good for my team to stay and shareholders, investors, everybody else. But I got to get my own head right. And I kind of had a little bit of a personal crisis and came back and said, how can I just change my mentality here?

How can I use this as a new way to learn about myself, get new skills, go in different directions? And I kind of got there in both ways in my earn outs of saying, how do I just turn this to my advantage more and learn patience and learn to listen, build relationships, started meditation. Some of those things both help you with the stress, but then also led to seeing some of these

negatives in a more positive way. So I'm a little lost. So this post prompted readers to say, what is a year of your life worth? But instead of being so commercial about it and saying it's

you know, it's, I can put a number on you. You, you reframed it and said, actually this period, this earn out period is a chance for me to learn new skills, learn how to like you, you, you've reframed it. So you, you stopped thinking it in such commercial mercenary terms or woe is me terms. Okay. Um, and turned it back and said, well, what, what other value can I get out of this?

Beyond just the economics. You got it. And even if it's just me learning the skill of patience, going back to that marshmallow test and not just becoming a monk about it, but-

Oh, there's things I can learn. There's people I can seek out. There's relationships I could form in this company that can help me in my next two companies. You know, like that's a thing that it's sitting right here. You can go talk to people. You can find them. You know, so there's more searching a little bit more for the value aside from the financial and just complaining in the shower or crying in the shower in the morning. Yeah, because five years is a lot of time to feel like an indentured servant. For sure. And that's the way a lot of people think about it.

And I don't, yeah. And that's, that's where there is possibility to turn that around. And even if it, you know, even if it's writing in your journal and seeing all the problems that are out there, like it's an education, you know, being on the other side of the wall.

And I got to see inside the biggest holding company in the world and work with folks who are industry names and sit at the dinner table with them. And wow, there's an education. Some of them impressed me. Some didn't. Ooh, I see what they're doing. Like all the things you can learn about life and people while you're getting paid and while you have that huge incentive still.

Well, let's talk about what you took to your next earn out because you got involved first as an investor and then in a kind of unique way, the CEO of Ohology. Maybe describe how this all went down. Yeah. So this was still on my career to-do list was to do a true internet startup.

And so that's what I was hungry to do after my agency experience. And spent about a year afterwards at a VC firm, got to see the inside of that world that was interesting, and met a guy who we did a small investment in. And he ended up following into seeing the opportunity of Pinterest marketing, which Pinterest was a social platform just getting going. This is 2012.

And he had kind of put an SEO mindset to Pinterest and was seeing amazing traffic. And his regular startup wasn't doing very well, but he was like, Bob, you got to see this. And as the digital marketer, even though I was kind of burned out on digital marketing, honestly, I was kind of done with it. I was like, OK, what is this? And my eyebrows are going up seeing the kind of traffic and then seeing, oh, this could be the next Facebook or Twitter thing.

It was all about useful content. As a marketer, I've always been a believer that the future is about how do you give people marketing that actually adds value? And so things like a Pinterest, it's

People are looking on it for recipes and a craft can share recipes or a Pantene can share hairstyle ideas. And I could see marketers were looking for something like that to connect the dots in social and content. And so we ended up starting a company called Ohology that our original idea was building a software solution for Pinterest marketing.

And the concept was, if this is like Facebook and Twitter, there's going to be a raft of partners, tech partners, the parent knows larger companies, send them business and everybody wins happily ever after. This one, we raised money, raised a seed of about a million dollars, then did a series A of a couple million. And I like to say, I made every mistake in the startup book, everything.

Raised too much money, spent too much money, hired too many people too fast, built on someone else's platform. Pinterest didn't love any partners. They did eventually create a partner program, but they really didn't like it. They kind of took our business in some ways. I mean, lots of blood, sweat, and tears. I put my own money in this business too. So I was an investor working with VCs for the first time. How much did you put in? Yeah.

Half a million dollars, something like that. We raised a total of 10 over time.

Wow. Okay. So you raised 10, you're half a million of your own money. Yeah. And did you get the same terms as the VCs? Yeah. It's like a preferred. And then I also got common shares as a founder. Okay. So the preferred shares they received, was there any sort of liquidity preference? Well, a good question. So no until all the shit was hitting the fan and we did a down round.

And that was a, that the investors in that round, which was all current investors, some did not continue, but so it was a pay to play down round. Describe that for folks. All right. Yeah. There's a couple of things here. So a down round is basically the next round of investment is a lower valuation than the previous round of investment.

So that can be good for the investors. They're getting a bargain. It's half price. Not great for the common equity holders like the employees and founders. So you take a hit on the value of your stock.

It was pay to play, meaning for the shareholders who had invested so far to continue to retain their preferred rights, they had to also invest their fair share in that new round. And then in addition, those investors got a 2x preference, which is a...

When someone wants to buy you, let's say if the investors have a 50% share of the company, companies bought, they get twice their share in cash or stock, whatever it is, of their investment before the common shareholders get any money.

Yeah. Another way to say it is when they get 2X their investment before the rest of the money is divvied up. So it can be punitive if the value doesn't grow enormously after they make that investment. And we were lucky to get any of that money, I'll tell you. Yeah. How did that impact your deal? So ultimately-

Let me just walk us through the numbers that- Yeah. So, well, that last deal there was kind of at a point where my co-founder burned out. He left the company. I took over as the CEO. Investors said, this is the last. I think it was like maybe only just a million dollars was that last down round. Like, this is the last. You guys have to figure this thing out. And so, I came in. I was like, all right. We went from like 50 employees down to about 30.

and said, "Guys, we got to control our own destiny. That means get off Pinterest and get off the investor tin cup. We have to get profitable." And so, we still had some good business from this Pinterest world. It was declining, but

That led us as a company to seek what else could we do with what we have? And there was two of my sellers kind of at the same time, they were pitching little creative agencies who worked in shopper marketing, one in Minneapolis, one in New York. And the agency client was like, "Oh, you guys are like influencer marketing."

And they said, yes, we are. And they came back and said, we sold these influencer deals. We're not really sure what that is, but, you know, one's for 25K and one's for 30 and we're doing it. Like, all right, what's that? You know, and we kind of had a fresh mindset. The good news was, in addition to some more contracts, about 90% of what we were doing in this Pinterest solution was

worked extremely well and differentiated us in a better way in influencer marketing. We had some tech for identifying trends. We had some tech for better optimizing keywords. We had built a network of influencers for the brands to use in pinning their content. So we had a great relationship. We were giving them free tools. They loved us. So we started doing these campaigns and we also brought in something different that was at the time pretty unique.

Everybody else was using earned media where, okay, this influencer has a million followers and here's what we're going to pay for that. We didn't want to negotiate based on followers, mostly because it was a pain in the ass, but also there's a bunch of fake crap out there. I mean, this is now widely known of you can buy followers. Who are these people who are following the social networks or throttling who even sees these posts? So we just made it easier for ourselves to do paid social media to go get the impressions.

So the influencer would create the content and we would boost these posts. And that allowed us to show the client economically was much better for us. Like it's, you know, much more stable and predictable costs and, and our tech we could use to bid better.

And then we were able to tell the brand, you're getting something that's just like your other media buy. You can target, you can measure, you know it's real human beings, you can get third party validation of this. And so that's where we started turning it around. Got profitable after about a year, started doubling sales, like two and a half million one year, five million the next year, nine million the next year.

And as that success was happening, that's where I said, okay, maybe now's the time to start talking to some buyers.

About that same 9, 10 million revenue. You got it. Yeah. Sweet spot. Interesting. And so what was the reaction from buyers? Well, the thing I did on this one was for about... As soon as we started making that successful pivot, I went out and met with lots of iBankers and corp dev people in this constellation of about six companies that were in this space that we're in. So this is...

CPG and retail shopper marketing was the niche we were in. And again, it was a pretty good landscape, companies that were doing acquisitions regularly to add products and features. And so, over two years, I would just check in every three or six months, see them at conferences and just very open. Here's our revenue, here's our profit, here's the companies we're working with.

And the goal was literally one of them at some point is going to be in a board meeting and go, we need to get an influencer marketing or we got a bunch of cash we got to spend on something. Who's that Bob guy I met at the conference? Yeah. And literally that's how it happened. One of the corp dev guys for a company called Quotient, a year before, he's like, we're just making an acquisition now. So the timing isn't good. Talk to you later. He's like, we're interested. And the conversations went from there.

And what happened? Well, we ended up hiring a bank in this case, and it was the investment bank that I had had the most positive conversations with over the years, the ones who had given me the most advice. And this bank happened to have been the bank for the last company that Quotient purchased. And they had negotiated an incredible deal and knew them very well. Now, the funny thing was, I thought that was a real plus.

The buyer didn't love when I came back and said, oh, we now have a bank representing us and it's those guys again. So I guess there was some bad blood that happened in that previous negotiation. And so I kind of had to take over the negotiation instead of relying on my bank. They were worth every penny, though. They did a lot of other good stuff. And then we ran a quick process. So because I had had, you know, kind of some relationships with these other potential buyers, we were pretty quickly able to like test the waters with them.

Two did do some real work and went down the path, and we got one other offer. Similar pricing, but a longer earn out, actually. Or a little bit higher pricing, but a longer earn out. And what was the offer they made? Yeah. So the offer that we got from Quotient that we went with was $20 million upfront, and then between zero and $30 million in the earn out based on a revenue number.

Wow. Okay. So totally, totally tied to revenue. Yeah. Only revenue and 19 months this time. Okay. So let's, so 20 million cash for a $9 million company, $9 million in what kind of profitability? About 20 again, about 20 EBITDA. So you're about call it two on the bottom line. So you're getting a 10 X cash multiple. Yep.

Which was really good. Yeah, it's really good. And then zero to almost infinity. No, zero to 30 million on the earn out. Right. And tied exclusively to revenue. Correct. Okay. And how did that compare with the other offer? The other offer, I think it was, you know, the money was maybe a couple million more, but it was like a four year earn out instead of a little over a year and a half. Wow. Okay.

And how much did you have to grow revenue in that earn out period? I think you said it was 18 months. Yeah, it was 18 months. We had been doubling. And what they did is we showed them, here's the numbers that we predict for the next two years. And-

It was about doubling again for the next two years. We had a killer product. It was just hiring salespeople. And we had six salespeople. We'd only hit a fraction of all the universe of the clients out there. But we had it down. And they just turned around and said, okay, if you guys hit the numbers you're promising you could do on your own, there's your goal. So doubling from nine to 18 on the top line. Yeah.

And then doubling again to $36 million. And maybe, no, I mean, that was maybe, so maybe it was like $25 million in that extra seven, something like that. Still huge. I mean, obviously massive growth. Got it. Okay. So, and remind me, you've now got the $20 million sort of downstroke cash component. That's going to...

preferred investors first with a 2x liquidity preference. That dilutes it. How much did they get out of that? The majority. The majority. Okay. Because they had these preferred rights. Got it. It sounds like a very similar deal. At the end of the day, you got a bit washed out on the downstroke, but then this huge upside for the earn out. Interesting. Interesting.

Key difference here being shorter, but also this wasn't, you're going to be shuttled over here on your own. Good luck. This was, you've got a new product that we're going to push through our machine. So that was very important for us to, although we thought we could do well on our own, this was betting that we could work within their sales force versus just hiring and training. I see. So Quotient had their own sales force. Yeah.

They had over 100 people in sales working with every single packaged goods company in the country. Got it. And so they were going to basically sell your product to their customers. Right. Risky for you though, because now you're dependent on their salespeople to get the

Certainly. I tell you what helped us though is having seen them do this successfully just 18 months before with that other media business that they bought and talking with their CEO who's still on board, talking to their investment bank who had seen them do well. And again, it just became like for us a strategic focus. Okay, I took our sales team, our seven people and divided them up and said, you guys go be best friends with all of them.

Go help them. You work for them now. And you're going to teach them about influencer marketing. If they say jump, you're going to say how high. We're going to make this as easy as possible. And to be honest, we kind of were competitive internally. And we didn't do things... We wanted that sales force to sell our product, not the other products. And this is probably...

If I could advise my counterpart back then, I would have done some cannibalization clawback or something. But their team loved working with us. We had the sexy new product. We treated them so well. They hit their numbers. Many of them hit their numbers because of our product. So it was just such a great win-win. And doing it a couple of years in a row worked incredibly well.

But when you saw this offer, 20 million downstroke, much of which would have gone to the investors, like, did you feel like this was Groundhog Day in a little – like, at some point, were you kind of like, you got to be kidding. Yeah. I got to sign up for another one of these things? I've just got a lot – like, all my, you know –

nerves in the last one that I just did five years of my life, 1,280, whatever it is. And here I am, I'm going to do it again. For sure. For sure. Were you kind of incredulous? Like what was your reaction to that? Yeah. I mean, number one, I was just happy it wasn't going to be five years. So a lot less, you know, again, you try to, you'd go, there's going to, there's a, you know, how do we make the most out of this? We've got something great. Yeah. I,

There's a big bucket of money at the end of the rainbow. There's a great story to be told if we do this thing right. I'm going to learn. Now I'm in a big public company. I'm going to see how that's operating. I love learning from others and seeing behind the scenes. How does this thing work? How does that work? Who's good here? Who's not good there? What could they do? And I went in honestly saying, for the first couple of weeks, maybe I'll stay here forever. I wasn't running to get out. I mean, I was

hoping that this could be a place where I could contribute, maybe stay the rest of my career, who knows? I was not running to something else and wanting to learn. The second thing that was a big difference was it really became an entire team experience. And this is going back to what I said I learned from the last time of that Phantom Equity. In this time, we were a startup. And so all of our employees had equity options or grants.

And those are mostly underwater. So these are the people, that 30 people, you know, that core who could have had a lot more, you know, salary and options somewhere else believed in me as the leader. Hold on a second. We said, how do we do this together? And so we were able to negotiate a carve out within our urban out of saying there's $3 million of that 30, that potential 30. Everybody's going to get a share.

Everybody in the company who's an employee at a certain date, you know, before it was announced. If you stay. So kind of same structure. And that was powerful. Everybody from top to bottom would get a share of this in that $3 million carve out. The other $27 million would be divided among who? You and the other? Yeah. So that was like back to the regular cap table after that 2x preference. Yeah.

Right. Okay. Oh, because they, even though they were paid the majority of the downs, the 20 million, they still were shareholders. Correct. Yeah. Yeah. So they were, you know, and it was interesting that carve out, you know, I, I, uh,

A couple of my investors said, wait, including my ex-co-founder said, wow, that's a lot of consideration for the employees. That's unusual. I've never seen a carve out that big. And certainly they've never seen it to all employees. Usually carve outs are to a handful of executives. And I just said, sorry, that's what we're doing. You know, that's what it is.

The same people afterwards said, wow, that was so smart. You know, I've never seen an earn out work that well, you know, so. But that's just I mean, it felt good, you know, obviously, but it's kind of just basic capitalism. I mean, this is a people business. You want them locked in. You got a good thing going. You know, a buddy of mine has a full of these expressions, but one of his favorites is pigs get fed, hogs get slaughtered.

You know, you don't want to be too greedy. You don't want to miss a number because you were trying to get an extra 100 grand or something, you know, like just spread the wealth. And, you know, it's the right thing at the time, you know, and you win friends for life. And that's what it's all about. Tell me about their reaction to the deal, because to your point earlier, they had in some cases given up.

big jobs or equity and other companies to come work for you. And, and you presumably had to tell them at the time of the acquisition that, Hey, like, you're not going to get liquid. I need you to re-up and like commit to this new thing. Like, how did you stick handle that conversation? That must've been really hard. Yeah.

It was not hard. I think mostly because we were always transparent. I mean, no one – we're in Cincinnati. This isn't Silicon Valley. People weren't thinking we were the next Google. Like, this was the first equity any of these employees had. So, you know, and hey, we're doing a downground. We tell them your equity is – it's not going to be some giant payoff. Like, so no one was expecting that. And it was like, look, we're – I was very open. We're a VC-backed company. We have to sell someday.

We're going to try to do the best thing we can. So the expectations, I think, were pretty much zero. So those conversations were, oh my, tears. I mean, those conversations were, wow, like it was powerful.

What did that – I'm trying to think. The $3 million carve out, how many people were sharing that? I'm trying to figure out like how much money. It was about the average person. A little over 50 full-time employees got to share in that.

And then we created like kind of different tiers, like executive team had a certain tier, all the same. I got the same piece of that as my, you know, kind of that group as my fellow executives. And we had like a manager level, got a certain level, and then all of their employees got another level. But it ended up for everybody getting to about an extra year of salary if we were to hit that number, which we did. Got it. And that clearly was...

very motivating for your team, an extra year. Hell yeah. Yeah. Yeah. Yeah. Well, I think that's important benchmark for our listeners because, you know, oftentimes they're trying to figure out what can I do to retain my key staff through this earn out? And you found that putting an extra year of their base salary on the table and say, Hey, if we do this together, you know,

you're going to get an extra year of salary. That was very motivating. Yeah. And especially some of the things that we had to do. So when I say, for example, Hey guys, we got to go be best friends with the sales team. Now, are they not going to do that if they're not getting the bonus? I can go back in time and play that scenario, but it is a lot easier for them to go. Yes, I will. Because now I know, you know, like that's going to get us there. How did it impact, uh,

relationships between employees? Because I think in, in like the fairy tale story, everybody rose together towards this amazing goal, but humans are humans. And there are some that are, you know, hard workers and would do it anyways. Others are not hard workers, a bit lazy. And like, like how did it impact like internal relationships between people?

I got to say, you know, and I'll credit a lot of things, mostly probably the still smaller size of our team. 50 people, you get your arms around. I mean, I had one-on-ones a quarter with every employee. You know, we were very together on Slack. Most of us were in Cincinnati going to an office every day. So we had just an incredible culture there.

that was the key to our success. That's what made us a company worth buying. That's what got us our revenue growth and our profit was not some secret sauce other than make this a great place to work where people trust each other and do that. So I'd say there was no, if there's any stress during the earn out period, a little bit of everybody thinking what happens afterwards? Am I going to have to, are they going to let us stay independent? I got a lot of those questions over the months of

Am I going to have to go work in this group? I like them or I don't. Am I, you know, is the sales team going to break up? You know, so I think if anything, a little bit of some stress and some gossip and aligning of where to go, you know, once we're fully integrated after the earn out is done. But day to day, no issues. So you've gone through this twice now.

Once at Quotient, where Quotient was the acquirer and you achieved, if I'm correct, the max earner. Yes. Yeah. You achieved the $25 million top line, which was an 18 month. Yep. And you achieved the top line at WPP. Yes.

One of the key learnings is get everybody on the same team. Incentivize people liberally. Don't be a hog or a pig or whatever. Be generous. Make sure everybody's fully aligned. One year's compensation salary is probably a good place to start to get people really excited and motivated. What else did you learn from the two experiences that

If you were to go through a third experience, maybe as the acquirer using an earn out, what might you do or do differently or keep? That's a great question. I think that the biggest thing in both those companies was seeing just the complete lack of any plan for when it's done. And, you know, especially in the, you know, these are two companies that made acquisitions regularly, you know, it's part of their business model, but there wasn't

There wasn't really a welcoming. There wasn't a, you know, I had to tell them at the end with quotient, hey, guys, we should probably do some things to plan for keeping these people. You know, it was we had grown that business almost at that point, 60 million product line.

That they didn't know much about. They didn't dig in. I never had someone come up, Bob, what is your thing? You know, again, maybe that's an ego trip, but I'm a curious guy. I want to know, like, what the heck? What's the magic source here? But just kind of that lack of what now? And I think it goes, I mean, I have lots of theories, but I think it's one of the key differences between being an entrepreneur and being a

corporate, whatever that is, where when you build something, you think about stuff like that, you take it personally. But acquisitions get made for lots of reasons. And who's accountable for the integration at the end of the day? Is somebody...

As an entrepreneur, you lose sleep at night. You get up on a Sunday morning, you do whatever it takes. If you have that stable job in a corporate world, you usually don't. Because especially if something like an acquisition, the responsibility is shared across so many people. The decision was made years earlier, in my case by a previous CEO. It just kind of stuff fizzles. And that's why 70 to 90% of acquisitions ultimately fail and most earnouts don't work, I guess.

But that's what I would do differently. I'm hoping to do differently, you know, as we are more on the buying side and building an investing side in the future. And so what proportion of the team that was there when you hit the earn out goals at Quotient is still there today? Well, first, I'll tell you, we only lost one person from that deal in the 19 months. So only one person during the earn out.

and he's still kicking himself um but uh so you had 50 people and you lost one so yeah the people there today i think maybe four because now that company has gone through that my quotient was acquired um year and a half ago and pretty much laid off everybody who was left on my team um wow

I hear stories of what they were thinking, but I know there was some after I left and there was a little bit of people didn't know what to do with the business. I left, our C team left soon after the acquisition was done. Most of us got fired, including me. What was that like? Mostly awesome.

Did you do anything to deserve it? I mean, you just grew the company. I know. That's it. Yeah. Well, again, I still don't know the full story. I was not playing the game. I mean, I pissed some people off mostly by retaining control. So again, in that one, I retained control of our business to make sure we made the right decisions. I also did not like how that company was operating. And so I put up a bunch of walls. And so...

The way I heard it is, we got our checks in March 2020 and supposedly the CEO thought I would quit that day. And since I didn't, he got nervous and had my boss fire me two weeks later or something. And that's what, A, I was going to stay into it to the end because

One of the things I believe in is you just stay until that check happens. And then after that, look, I've been there a couple of years. Maybe you guys want to keep me. Maybe you don't. I don't care. I mean, I didn't have something to rush to, but by being patient afterwards, an extra little marshmallow was in the offering. Well, a nice severance and got my options and it's fine.

So did I hear you correctly to say that of the 50 that were there through the year-and-out 18-month earn-out period, just four remain today? Something like that. Yeah. Yeah. How does that make you feel? I wish there were zero left there today.

Because it's the, you know, um, I don't believe it's a, it's a, you know, those are, those are talents that could be used elsewhere. And what also makes me feel good is, um, I have since restarted my influencer business, uh,

After those layoffs happened, one of the beauties of being a part of this acquisition and getting to know those 100 salespeople, they're now working all across the industry. They're working at Walmart. They're working at Kroger. They're working at Kraft, Clorox. And they loved us and they miss our solution in the marketplace. And so about a year ago, we said, let's just start it again.

And I brought in one of my key sales leaders. I said, you're the CEO. I brought in another sales leader. You're the CRO. And a handful of the original team. And they're off and running, doing it all over again. This time, I'm not the CEO. Did you not have a non-compete that made that happen? It's been a year, well over a year since their non-competes ended. We also did other things to kind of manage that. Yeah.

But yeah, I tried to buy the business back. I mean, you know, and they blew me off a couple of times. So, you know, doing it again and it's fun again in a different way. Isn't that fascinating? Wow. I think that's an interesting, it's such an interesting story.

it's such an interesting learning because I've never heard anybody talk about like people are so focused on hitting the earn out that that nobody has ever on this show talked about the absence of planning from the acquirer's point of view on like what to do in the event they do hit their earn out and it is a success like wouldn't you want to keep that business and you know it's a

You know, it's an incredible new growth engine, presumably, if you could somehow retain that team. And they, in both cases, lost a lot of the secret sauce out the door. The majority. Yeah, you got it. I mean, it's a shame, but it's not that surprising. I mean, that's why we entrepreneurs have opportunity. You know, if they had figured all this out, you know, we wouldn't have an opportunity. You know, they have to go buy businesses because they don't know how to build or integrate or manage on their own. So there's endless opportunities to...

Start up all over again, get a nice share of the market, maybe sell again. Who knows? How long was your non-compete? A year. Wow, that's a really short non-compete. Was that at a point in negotiation? Not really. We signed the employment agreement, just the regular employment agreement. Again, that's versus my agency. We had a special, extra special employment agreement with WPP, and it was a two-year non-compete.

But this was just a year, just like any other, all employees had to sign the same thing. Interesting. Wow. Surprising that they didn't try to lock you out of the industry for longer given. I think, I mean, some of that is this was a Silicon Valley based company, California, and they were more of fashion themselves as a tech software business. And so they didn't use some of the, like a traditional agency buyer has more recognition of...

these guys can just quit and go take their clients back somewhere else. That wasn't in their background and mindset necessarily. You've gone through what it's like to have investors and getting ground down. How has that impacted your capital table on the new business, for example, the new influencer market? I know you've got a couple of other businesses, but are you seeking funding externally? No, we're done with that. The nice thing is

We do have some now of our own cash that we can invest, but having done it before especially, we know and we very quickly got enough. We put some seed money, pay the initial team to start, but it's the kind of business that you get contracts very quickly and we're customer funded. And that's why I plan to be on a going basis. It's a lot easier, less pressure.

So tell me about life now. What are you up to now that you've fully exited the... I've blanked on the name of the acquiring company. Yeah. Quotation technology. Quotation company, yeah. So from our previous company, myself, my COO, and my CTO, the three of us were... We said, we can't work here anymore. We like working together. Let's go do something. And so...

We spent a couple years thinking we might do as another software company and just got that out of our systems and said, "You know, we just love service businesses." Never goes out of style. There's always room for more, better. We've been there. We've done that. We know how to build them. We made the mistakes. It doesn't take much money to get off the ground. You don't need to have some giant exit. Let's just hold them, have cash.

And restarting, you know, we kind of got this especially unique idea of restarting our influencer business by saying, let's create a platform that we can launch new service businesses under. So it's a whole co-model where it's more like kind of an incubator too.

And specifically what we're looking for is go find like a great number two person in the service business who doesn't own equity. Maybe their company just got bought and they don't like their new PE owner and say, look, you already act like an owner, but you're not a crazy entrepreneur. You can't go without a salary. Put your mortgage on the line. Come into our and let's build your business under our platform. We're going to get you a salary, get you benefits. You know, you're going to get equity. We're going to split it.

We'll only take profit. We take a bunch of the crap off their table, like the accounting, the contracting, legal, all that stuff. They don't have to go learn that. And then we're business partners with them. And the goal is that hopefully we can kind of de-risk by 50% what it takes for them and then get like a 5X growth of the business versus what they could do on their own.

And so you've done this a couple of times. One, obviously the influencer marketing company, you've started up again, but you've also got a recruiting company and there's a number of other businesses that you fund. Yeah. Recruiting company. We kind of pivoted our HR tech thing into that. It's like, here's another thing people need all the time. And we have a unique spin on it. We created a software development agency. Once again, like this is a need, it's there. People need folks they can trust.

My CTO, Ross, acts as a fractional CTO for companies in need. Our newest business is a revenue operations consultancy. I've actually found an amazing woman through a recruiting project we were working on.

The company did not hire her, but I fell in love with her and said, you got to do this. And she's now an entrepreneur and launched a couple of weeks ago, got a first client, couple of clients already, and she's off to the races. And it's been really neat to kind of say, okay, this is a way we can scale our skills, the money that we've gotten, but also be a new...

New challenge for us of, you know, I've done the hard work of the zero to one, getting these things off the ground. Now I get to help other people do it. And it's really rewarding. That's awesome. And so where can people learn about you? Are you a LinkedIn guy or what's the best sort of way? I'm a LinkedIn guy for sure. And then, as you mentioned on Substack, you know, I pretty much write a post every week.

My sub stack is called the workaround and the whole idea is like I'm sharing stories like I have today about the ups and downs to help you get a shortcut to success or a pothole to avoid.

Yeah, we'll put links to your Substack and your LinkedIn profile in the show notes at Built to Sell. People should check out your Substack. I loved reading about the, you know, what's a year of your life worth. It was really thought provoking and lots of really good posts there from someone obviously who's lived it and knows what that's like. So I'd certainly encourage people to check out your Substack. Appreciate it, John.

Bob, this was a real pleasure. I'm thrilled to hear you had two successful earnouts. We're going to have to start changing our tune about earnouts. It was great to hear your stories. Well, it's great to finally be here. I'll never forget your message soon after 2018. I think you read that we sold our last business and I was like, well, I can't talk then. But I'm so glad we finally made it happen. Thank you. And thanks for the work you do. I still listen to every week and love the stories that people share.

And there you have it for today's episode between John and Bob. If you enjoyed today's episode, be sure to hit that subscribe button wherever you're listening to today's show. And to help support this podcast, I'd encourage you to leave a rating and review or comment on our YouTube channel at Built to Sell. It truly helps our show grow and get in front of more owners just like you. For show notes, including links to everything referenced in today's episode with Bob, 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.