Ep 485 After the Deal: The Psychology of Selling—Kill Criteria, Walkaway Mindset & Why “Telling Your Company’s Story” Often Drives Up Your Multiple
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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. I'm the executive producer, Colin Morgan, and today's episode is unique. It's our first ever live recording of Built to Sell Radio.

Captioned in front of a live audience at the Value Builder Summit, a gathering of mission-driven advisors dedicated to helping founders level the playing field as they approach their exit. Now, you'll hear from returning guest Rob Walling, who has started, built, and sold multiple

As an investor and conference organizer, he's seen hundreds of founders exit, some thriving, others struggling. And he teamed up with his wife, Dr. Sherry Walling, who you'll also remember from this show, a clinical psychologist specializing in supporting entrepreneurs to codify what separates a successful exit from a successful one.

from one that leaves an owner adrift. Their insights culminated in The Exit Strategy, a book that explores the emotional and psychological challenges of selling a business. In this episode, they unpack how to use kill criteria to know when it's time to sell.

The walkaway mindset and how it can drive up your multiple. The difference between being rich and being king and why it matters. Why telling your company's story the right way leads to a better price and the surprising importance of an exit uniform. This was a great conversation and we're super excited to bring it to you in this unique live format, which you may see in the future. Without further ado, here's Rob Walling and Dr. Sherry Walling.

Welcome back. Welcome back. You may have noticed when you came in the room, there was a book on your table. Well, by sheer coincidence, we have the authors of that book right here, Dr. Sherry Walling and Rob Walling.

They're going to do a special live, first ever live edition of Built to Sell Radio with John Morillo. So let me tell you a little bit about our guests. And they are both returning guests to Built to Sell Radio. Now, separately, Dr. Sherry Walling is a clinical psychologist, award-winning author, and mental health advocate.

who has helped thousands of founders through some of the toughest moments of their careers. Rob Walling is a serial entrepreneur, investor, and driving force behind TinySeed, the first accelerator designed for bootstrapped SaaS founders. And together, they are a powerhouse duo in the world of entrepreneurship.

bringing their unique blend of business strategy and emotional intelligence and resilience, helping founders to not just build successful companies, but live sustainable lives. Ladies and gentlemen, Dr. Sherry Walling, Rob Walling, John Warlow, and Built to Sell Radio. Dr. Walling. John. Rob.

- Welcome back to Built This Out Radio. - Great to be here. - Yeah, it's really good to have you guys back. And I think this is our third conversation between the two of you, so this'll be good, or four, there you go. You've just written a book. We're gonna get to exit strategy in a moment, but I wanted to go back. Some of our listeners will have heard either your story or the original Drip story. And I thought it might be good for us to kind of just reorient it. People haven't had a chance to hear that story.

to kind of level set on the Drip story. So Rob, walk me through the Drip story. How did it start? When did you decide you wanted to sell? That kind of stuff. Sure. Yeah. So Drip is a SaaS app, software as a service. And it

I started it to scratch our own itch. I had a small SaaS app before that, and none of the tools that we were using could do the things that I wanted. So as a typical software engineer, I said, well, I can build this in a weekend, which of course, nine months later, we finally launched. So it originally was just a very simple tool that could collect email addresses and send out email sequences, but it quickly became obvious that that just wasn't very valuable in the market, trying to build something new and novel

is hard trying to build something that people actually want. So we pivoted into basically becoming like an email service provider, marketing automation. So competing with MailChimp, ActiveCampaign and-- - How did you differentiate from those guys? - We positioned ourselves, the headline, the H1 on our website was lightweight marketing automation that doesn't suck.

And that either, it polarized people, but in a good way, right? The people who really believe that the other marketing automation tools weren't great and that the sales process wasn't good,

They just flocked to us and the people who were offended by the word suck on the homepage didn't sign up. But apparently there were enough in the former camp. And was it built to sell from the start? I mean, was the vision to kind of build it and sell it? No, it wasn't. I had built several kind of lifestyle businesses along the way. I never raised funding. So I've started six companies total and five of them were bootstrapped and Drip was the fourth one that I started.

And I was really building it as another income stream. I wanted it to be about 10 times the size of my previous one, which is doing what, like mid six figures, maybe mid to low six figures a year. And I was like, well, I'm going to do one that does millions a year, see what that feels like.

And so I thought we were just going to kind of run it like a Basecamp or a Mailchimp or, you know, Mailchimp has since sold, but at the time they were the example of a SaaS that just runs for 20 years, you know, and doesn't sell. Yeah. I mean, these are big competitors. I mean, Intuit bought Mailchimp, this billion, I can't remember what the actual transaction was, $12 billion. Yeah.

We were much, much smaller. The drip sale wasn't that big. Yeah. Knock off several zeros. Yeah. So how big did you get it before you decided to sell? We got it. We were 10 employees and we were doing a couple million a year. So we were kind of just getting started, if you want to know the truth. But it's hard. I mean, as everybody knows, capital becomes a constraint at a certain point. And I was faced with the decision, do I raise a round of funding?

Or do we sell, take money off the table? Because I had never had an exit. I had never, not a big exit, and I'd never had a life-changing, like, I don't have to work again moment. And we were getting in bet. It's SaaS. I mean, the value, you know, the revenue multiples on SaaS are quite significant. What were they at the time? Like, it's changed since then. Yeah. Yeah. This was 2015, well, it sold in 2016, but we started the conversation in 2014, 15. Right after we launched, people started approaching us.

with inbound interest and the multiples for uh annual recurring revenue so not profit but arr was i'd say they were four to six um and then market would take a dip and people would try to buy you for three and a half because hubspot was at three and a half in 2016 you know what i mean so you know how it is there's always a negotiation but and and then they since have they went up a lot higher in the early 2020s and i don't know now they're what four to eight if i were to throw a

you know, a sizable asset you're sitting on. Yeah, yeah. At this point. Yeah. And so you're at this crossroads between, on one hand, maybe we raise money. On the other hand, maybe we sell. How did you kind of weigh the pros and cons of those at the time?

There were a lot of conversations with Sherry, trying to figure out what I wanted long-term. And this is the hardest thing, right? In life, there are a lot of two-way doors, as Jeff Bezos says, and selling your company, much like getting a divorce and a few other things in life are one-way doors. So I spent a lot of time. From the time we really kind of decided to sell it until it closed was 13 months. And that gave me and my minority co-founder plenty of time to think about it.

I would have had a really tough time if it was like, I decided to sell today and 90 days later, I'm signing paperwork. That would have been really tough. But the factors to answer your question, it was if I raised money, I needed to raise money or sell really. I mean, we were growing. Why couldn't you just stay as a lifestyle business? What was...

Because I realized how ambitious I actually was once things started hitting. I mean, we were one of the top 10 fastest growing email service providers in the world. Even though we were still small, we were just chewing up market share. And as a result, we were chewing through working capital. And I mean, there was a...

tax time one year where I like borrowed, I was borrowing against my 401k to make payroll. And this is not something I do. Like I'm very risk averse. And I realized if I'm going to give this business the best shot to be, you know, an eight figure or nine figure business, I either need to raise some money and go at it, or I need to take money off the table and walk away from it. So you mentioned you'd been talking to potential suitors since 2014, 15. How did that coalesce into who ultimately bought it?

There were, I mean, we got five or six folks that were pretty serious. I say folks, these were companies or private equity who were approaching us. And this was back before, like right now,

There's a lot of private equity that's buying SaaS. But in 2015, '16, it was just getting on their radar, especially trying to buy something that's only going to sell for low eight figures maybe, high seven, low eight figures. There just weren't that many PE firms that were interested in dealing with that.

So there was inbound interest and it became obvious that there were a few folks who really were willing to pay. They weren't trying to get a value buy out of it. I didn't want to sell it for two or three. What made you realize that was the case? What were the buying signals that told you they were willing to pay? It was when I said we're profitable and growing and not for sale.

And the ones who kind of walked away said, all right, I guess we'll come back later when I get, you know, when you plateau or when you get right, you can kind of tell they were value versus the other ones who said, I still want to buy you. And then it's like, ah, we're not for sale and you still want to buy us. That's a good signal, right? Because then you expect you're going to get a pretty good multiple out of it. And what happened? We wound up getting in negotiation with a couple buyers. And here's the interesting thing. I talked to, well, I talked to some friends who had sold in this range before and they

Several of them were like, yeah, no broker will take this deal. It's too small. They kept telling me that. Yeah. So I eventually did find a broker in the SaaS space. There's a handful of folks who operate in that space. And I run a conference in a community in the space. So it was pretty easy to find them. And they helped me negotiate the deal. In what way? Like what was their, it sounds like you were kind of running things. You had buyers coming to you. Like what was, what did they add to the equation?

really level setting for me what standard terms were, you know, because I didn't know what like a hold the hold back what the 10 or 15%. I didn't know what that was still don't even really understand. I don't need to they cut my money and then I got it back a year later, you know, but it was like saying things like that. They're like this is industry standard and also helping me on the calls. I mean as much as I was running the company. I had never sold an asset of this magnitude.

I had had like a mid to high six figure exit, which is a whole different thing. It's like selling technology. But this was the most money like Sherry and I grew up solidly working class, you know, the poverty line like this was more money than we had ever seen. And so how do I not screw this up was really the thing.

And in that case, I'm willing to pay someone a cut of the purchase price so that I don't screw it up. Because any sentence I say wrong on a phone call can cost me six or seven figures. That's why it became obvious. I've heard this idea of the lawyers in a deal also refer to, well, that's market, meaning that's standard. Yeah, yeah. Meaning that's not out of market. That's not out of scope. It's sort of like that's normal. Yep.

Which gives you a peace of mind to say, oh, okay, other people agree to this clause or don't agree to that clause. And also there's a little bit of therapy going on there, as I'm sure many of you have experienced. They had to talk me down a couple of times where I almost rage quit the deal because I was so stressed during the deal. One of the reasons we wrote this book was coming out of that and decompressing and being like, boy, I've read all the books. I'd read your books. I'd read Bo Burlingham's Finish Big in the space, but I felt like there was more to be said in terms of getting through it without imploding because I definitely...

uh almost i'm kind of close to it if you did you say rage quit rage quit the deal i've never heard that term before okay so what made you want to rage quit like give me a specific example of something that would be like too soon i'm ptsd around this are you gonna ask me i can feel my hair standing up right now it was little it was some little things and some big things um pick one they they made an offer with that was uh

Some cash and a chunk of stock. It was a minority of stock But it's in a privately held venture backed company where I know that the VCS have some type of liquidation preference because they've raised 38 million Right, so I know the VCS have at least a 1x and maybe a 2x like they're getting a lot of money back So why would I take stock in a privately held entity when I said I want all cash? It got really contentious really quick and I was just like, you know what? I

I used some colorful language that I won't use here on your podcast, John. And I said, screw the deal then. I'm not doing the deal. And the broker was like, the advisor, you know, hey, this happens. And we were, you know, the actual process didn't take 13 months. The whole thing probably took from starting negotiation until it closes about five months. It took a couple months to get to LOI.

this was only two weeks into that process. So it was really early. And already I was just like ready to flip a table and be like, I don't, I need to go run this company. I'm taking my eye off the ball here. And I'm going to, is growth going to plateau because I'm too busy focused on this deal. Yeah.

And Sherry, what's going on? I mean, you're sharing a pillow next to this entrepreneur who's going through this. Most nights, yeah, yeah. What are you witnessing? Like, what are you observing in this process? Yeah, it is really interesting to remember the role of entrepreneurs

of the broker that Rob worked with because it was actually really essential, I think, in my mental health. It's having him have someone who can go through the ups and downs detail by detail in the deal. Because I'm sitting in the front row, but I'm not in the business. We're not co-running it. It's his business.

And he's making really big decisions that of course have huge implications for his life as well as for my life and the lives of our children. And I'm watching this man who I have known, we met in college, so I've known a long time, who is creative and generous and really loves to build things and create opportunities for people. And he's moving into this space of negotiating this deal and becoming this like,

paranoid, like angry. He's like line by line through the contract, almost constantly like obsessive. And I'm like, who is, who is this human? Like, this is really unpleasant. And I think if it was a couple weeks, that'd be cool. But it was months, months of

carrying the weight of wanting to make this magical deal happen that was going to set him and us up for the rest of our lives. But the pressure of that was really rough on him and then therefore on me, because I don't have any decision-making power to have any control, but I'm often asked to be an advisor, give guidance. And it was just a very, very rough time, both on him individually and then on, on all of us.

on our marriage, on our family. In psychology, we sort of talk about the contagion of emotion. And even if you do your best to have separation between what stress or what emotional experience is coming up for you in the context of trying to do a deal, it will shape your family life. It will shape the lives of those close to you. So again, the coming back to this book was a little bit of our attempts to think about how do we help people do this a little bit

Yeah. Without so much angst. And I want to get to the book. I just want to ask you a couple more questions. Are you living at home during this tenure? Are you working from an office outside of the office? Are you in at home most of the time? I, we had an office. I went in two and a half days a week. Okay. It was about half, half and half. And boy, that was, that was tough being around because I didn't tell the team right until the last week or two. Right. And then I was stressed at home as well. We had two young kids at the time. There was a lot going on. Yeah. How did you choose to tell the team?

And luckily, the team was so small that I told them one at a time, actually, which I know if you have a large team, 40, 50 people, you can't do that. But it was just, I mean, we were coming in real close to two weeks, maybe before closed after months and months of negotiation. And I just sat down with each individual and said, I'm going to tell you something that's going to sound like bad news. But trust me, I actually think it's going to work out better for all of us. We're about to sell to Leadpages in two weeks. You know, we're going to sign paperwork and then

Let me answer any of your questions. So I had the luxury again of having a small team and being able to- How did you spin it to be good news for them?

I talked about how we had been cash constrained. Everyone knew we were cash constrained because they would come up with great, amazing marketing ideas and great, amazing, let's hire this next person to take the pressure off of us. And I was like, we don't have the money. We don't have the money. I kept saying that every month. Like, we don't have the money. I can barely make payroll. Even it was this weird thing of like, you're growing fast, but you're just chewing through. We grow 10 grand of monthly recurring revenue in a month. And I'd hire a developer because the market is so frothy, right? To try to keep up. Yeah.

And so I said, A, we're going to have more budget. B, they pay market salaries, which we are not, as you know. You know, anyone who worked for us was really doing it because it was a fun ride and they wanted to be part of something amazing that we were building. But none of us made market salaries. And so I said, we're going to try to get that in place.

you know, taking care of as well. So there were a few other things, but those were the big points. How was the deal structured that you actually signed? The original deal was a bunch of this crappy common stock that was going to get washed out by the EC. What actually was the deal in the end? Yeah, it did wind up being an all-cash deal, which is what we wanted. And there was a...

What was it? It was a, we got a big chunk up front, the majority up front, but then there was a payout a year if we stayed employed there. And I actually had to move. Part of the negotiation was I wanted a purchase price. It was pretty ambitious. It was above market multiples. And we were going back and forth, the CEO and I back and forth. And I said, what would it take for you to hit that number? And he said, you'd have to move out to Minneapolis for a year. And I said, all right, we'll do that. And they hit the number. Where were you? Well, you came home to me and said, would we do this? Yeah.

That's actually the truth. And actually, the beauty of it is that we were living in Fresno, California, which is a fine place to live. But we struggled with it a bit. We were transplants into there. And so we were already thinking about moving out of Fresno. And Sherry had come to me and said, this company's in Minneapolis. Don't tell them. But if they ever say, we'll move you to Minneapolis, just say yes, because it would be a great city to live in. I had never been there. I didn't know what it was like.

So when they brought it up on the call, you'd have to move out. I said, ooh, we really can't do that. You know, my wife is a psychologist. She has a private practice. We have two kids in school. We own a home. My office is, you know, I really pulled one of those. Let me check with the boss, you know? So I went home and I was like, by the way, you want to move to Minneapolis? Yes. So it was, it did turn out pretty good for us. Yeah.

And you moved to Minneapolis. And we still live there. Nine years later, we live in Minneapolis. So, yeah. Why did you write the book? Aren't there enough books on exit? A couple that I can think of off the top of my head. There's a couple really good books on exit. Dr. Wallach, go first. Why did you write this book?

You know, I think from our own personal experience of watching Rob go through this process and I spend my days also talking with entrepreneurs about the ins and outs and ups and downs of their life as business owners. It is a place in the life cycle of an entrepreneur where I have seen the most implosion, the most kind of mental health crisis, the most lostness. So I...

I think both of us really have the sense that even when it's an amazing outcome and people are walking away with buckets of money, like when everything goes well on paper, there's a psychological, there's sort of this meaning crisis for many people around this part of their business journey that it feels like we can just do better.

So the book really is our attempt to both give some guidance, but also help people ask some questions to prepare not only their business. There's lots of people who know a lot about how to help prepare a business, many in this room. But we really wanted to help people think about how to prepare their minds, their hearts, their families to make it a smoother process. I know we're going to talk about lots of

of things, but if you could distill it down to one or two themes, like why, why the crisis? Like what, what is it that triggers this crisis for a lot of entrepreneurs? Yeah, I think it's a, it's a unique experience. So you have kids in college, we have kids newly in college, and there's a bit of a parallel process in the sense that we are raising our children, hopefully to live without us, to launch and to do well and to thrive without us. And

We want that to happen, but it doesn't really stop the heartache of what it feels like when they no longer live in our house. I guess that depends on the kind of teenager they are. But, you know, for many of us, there's like...

I did a really good job and now it hurts. So that is also though a pretty normal process. Like you're going through it, we're going through it. Probably lots of people in this room are going through it. So we're on this developmental trajectory where we have other peers and other people who are doing the same thing. But for many people in the context of an exit, they may be the only

one in their forum who's exiting or they don't, there's not a community of people who are all going through this life experience together. And so I think that's pretty notable in human psychology. When we do these big transformations, often we do them in a cohort.

an age cohort or some kind of community. And the isolation that people experience around exits, I think is pretty unique. That's a really interesting point because I can think of like, you know, even though we're becoming empty nesters, we've got five other couples that we see every weekend that, that, you know, are going through the same thing. So we can commiserate and strategize and plan our trips together. But,

Entrepreneurship in particular exit is a solo exercise. Rob, what was it like for you in the first few weeks after signing or getting the check in your bank account?

Yeah, it was a mix. And I thought that it, I thought I would just feel so much better right away. And I can't, I did cause there was a lot of zeros in our bank account, but it also, I didn't decompress as quickly as I, as I thought it took months and months, um, to kind of undo, um,

the trauma is too strong a word, but just that the punishment that I had felt like I'd endured for months, you know, and then negotiate and then negotiating and the going through line by line and having to say, no, like I'm a harmonizer. I like, I like saying yes. I like, heck yes, I can get that done. And just every call, it's like, no, can't do that. No, can't do that. Why? Because like, because we can't, because we just got tired of it, you know? And so I had to kind of, um, it really decompresses the best way I can think about it for months. And, um,

had this money in the bank that I, you know, they say don't spend anything. I didn't want to go buy a Porsche or something, you know? So it's like, well, I can't really spend this. So I need to, it's the most money we've ever seen in our lives. Um, and just, let's just take it easy. And I just felt like I was kind of white knuckling after a, uh,

like a roller coaster ride where you're still a little rattled and a little dizzy. And that lasted for at least a month. And then it was probably four or five months after that before I finally felt like I could really exhale and be like, okay, this is the next phase of the rest of my life. What was the first thing you bought yourself that was out of the ordinary? So I bought a Porsche. Did you really? Rob bought a shirt. So...

I'm six foot two and I weigh 160 pounds. No shirt in my life long sleeve has ever fit me because they're always too short. If they actually fit me here, then they're too short. So I went online and I put up in my measurements and I got a tailored shirt for $100 online from Proper Cloth. And so now, but here's the thing, my whole life I've gotten in the habit of rolling my shirts up. So this shirt actually fits me, but you wouldn't know the difference because I roll my shirts up. So now every shirt in my closet fits.

is tailored and there's like 15 of them. And I was like, that's it. And I always get the guac on my burrito at Chipotle. That's the other thing. I always say yes. Never say no again. Always add avocado. And eventually I bought a Volvo.

So those are my big ones. Did you really buy a Porsche? I did. She brought a Porsche. I bought an old used Porsche. You're blowing everything I think of you out of the water here. This is like you're the most reserved, balanced, and here you are blowing the water on a Porsche. What are you thinking? I'm like, I'm a bit of a car girl. I don't know what to say. Okay. But it is interesting because, you know, I'm like, we've arrived, dude. Like, look at all this money that you have, we have. Thanks. Thanks.

But I think it was also really heartbreaking for me to watch him not feel like he could celebrate and not feel like that sense of safety that now is very real based on the deal. And I think it's so painful to watch someone who can have some ease not go towards the ease. So that's why I was like, well, I'm having fun even if you're wearing...

Shirts. I go on my walk. Was part of it some subconsciously trying to get him to celebrate the win for you? Yeah, it was for me. Interesting. Yeah. Do you still have the car? I don't because then I wanted a dog. Okay. It felt really weird to have a dog and a Porsche. Anyway. Go over to the Porsche. Now I have a Volvo and a dog.

We talked before and exit strategy is a great, I mean, it's got obviously tons of content chapters, but we talked about the way we might break this conversation up into three parts. So what do entrepreneurs need to think about before they go through this process, during the process, and then after the process? So I'd love to kind of start with before. So, I mean, I think a lot of entrepreneurs are wondering how they know when the time is right. Like that's a kind of,

big broad question and I think they go on these roller coasters where sometimes it feels like I'm getting rid of this thing right now I'm sick and tired of it whatever and then something good happens and they're like you know what I can probably stay on for a few more years and then it kind of goes on these waves of not sure when I'd be curious to know like from your perspective your research what what are you seeing in terms of how you answer that question

Yeah, I think the best case scenario is when the business is ready and you're ready. But of course, there's much complexity to getting both of those things done. And your work in terms of helping people begin a business from the beginning that is able to run without them, I think is obviously just extraordinarily helpful. But the sense in which...

It's wonderful to make these decisions thoughtfully and reflectively and over time and not reactively, not because you're burnt out, not because you've impulsively made bad decisions. And so it's so important when people are really at the beginning phases of entrepreneurship to think about how to sustainably prepare their businesses and themselves. And then when they're beginning to enter an exit process,

to really undertake that as if it's a part-time job, right? You need a team, you need a variety of sources of support, a lot of intention and strategy even to the doing of the thing and to preparing yourself, your schedule, your family members. So,

I think the bottom line is like, go slow and do it strategically. It shouldn't be a reactive, I'm hungry, I'm angry, I'm just rage quitting to borrow Rob's term and acting out of emotionality instead of acting out of

real like strategy in one's life, not just in one's business. Talking about practical, pragmatic ways to answer the question. There was a section of the book I loved. It was, it was around this kind of concept of the kill criteria. Can you explain what, what you meant by that? Yeah. I think there's a sense in which, do you want to speak to this? Yeah. Yeah. And it's from Annie Duke's most recent book. And I can't remember. Quit. Quit. It's called

It's called Quit. And she talks about how quitting... She's a poker player, right? She is. Yeah, professional. Former professional. She's written several books. Not Art of the Deal. That's a different book. She... Gosh, what's it called? Well, someone can call it out. Thinking in Bets. Thinking in Bets. Thank you. That's her most famous book. But her most recent one is called Quit. And it is about... It's destigmatizing quitting. She talks about how sometimes in life, quitting is actually the right choice. And she talks about all the startups where someone...

had an idea and it just wasn't working, wasn't working. And then they quit that idea, started a new one and that one took off, right? So she has examples like that. But kill criteria is a, usually it's a number and a date or a criteria plus a date. And it's like, if I, in the context of business,

I heard an entrepreneur, because I'm invested in 210 SaaS founders, SaaS companies. And one of our founders who sold in the last six months said, when I hit, and he said the number out loud, I think it was like 3 million ARR, then I'm going to sell the business. So for him, the criteria, that one didn't have a date. It was just the criteria of hitting that. Whereas other folks I might hear say, if I am not at...

at least a million ARR by December 31st of 2025, then I'm going to sell. Those are two different trajectories. The 3 million is like I'm selling because it's so good and I don't want to write it over the top. The other person's kind of like, I'm going to bail on this idea. Basically, the opportunity cost is $1.

is a little too much. But it can be helpful to have, you know, you don't want to live and die, but like, let's say the person said a million by the end of the year and they got to 980,000, you know, should they truly quit? Probably not. You have to be within reason. But having some type of semblance of when to give up can be helpful as an entrepreneur. Otherwise, you can just spend years toiling away on something that really isn't working or, like we say, ride it over the top, right? To where once you, we all know, once you plateau or even start going down in revenue, the multiples are just, you know,

the not, not great. Yeah. We talked about this, that this morning, this notion of, of, of riding it over the top and how that, if you don't have growth in the business or the potential for growth, the other concept that I loved, uh, that you wrote about was this concept of rich versus King in, in the context of how do I know when to sell? What's my biggest aspiration? Do you want to describe what rich versus King is all about? Yeah, there's, there's a really great, you can just Google rich versus King, um,

but is a blog post or an essay by Jason Cohen, who is the founder of WP Engine. He actually lives here in Austin. You've had him on the show, actually. Yeah. He sold at least one company, maybe two. But WP Engine now is a billion-dollar-plus company. And in the essay, he talks about, if you're running this business, do you want to be rich?

Meaning sell the business and walk away with enough money you never have to work again? Or do you want to be king and you want to kind of run your fiefdom? And different folks, like if you know of Basecamp, they're like one of the longest running SaaS companies, project management software. And they have never sold. And their big thing is we're never going to sell. We're never going to raise money. And they just run it, run it. And they want to be king of their domain. And that's fine. But also in the essay, Jason says...

But everything changes when you're sitting at a Tex-Mex restaurant and someone writes a number down on a piece of paper that means you never have to work again. And your whole life can just change. And I remember that moment of seeing the zeros and it changes. When it's hypothetical that that's going to go in your bank account, that's one thing. But once someone actually says, no, you can walk away, it changes. So that's where he was really, the rich versus king thing is trying to get around the stigma because there are folks who are, if they're on the king side, they really tend to be dogmatic about it.

it, never sell. If you sell, then you're selling out. I've heard that phrase. And in fact, someone called me a sellout when I sold my company. I was like, really? I set my family up for life. This is generational wealth and you're going to judge me for that, for building something incredible? So that was what Rich vs. King is trying to destigmatize both things, that both are fine as long as you know what you're in for. You've now built a new life for yourself as an investor and conference producer. What

I wonder how you would answer that question today. Do you want to be rich or do you want to be king? It's easy to say I want to be rich when I already am. I mean, honestly, back before, I mean, before I even had a company, I was working a day job as a salary developer and all I wanted to do was not work for other people. So that was the number one goal. And I was like the Terminator. I absolutely would not stop until I got there. And then suddenly I'm working for myself and it's like, wow.

well, how long is this going to last? And then you'd start a company and it was like, well, that one just got smoked by Google. I built a company that a quarter million dollars. It was great. Just thrown off, got cash in a year and then Google just destroyed it. And it was like, well, that's not great. So I guess I need enough money in the bank. That became the next thing, right? So it was like one step after another. And so I find it hard. I think if I didn't have a lot of money in the bank, I would still be going after that, to be honest. And these days being king is fun.

Because you are in control of your destiny. You don't have a lot of control. I don't have to do it. It is, yeah. Now that honestly, there's a little paradox here. We talk a little bit about this in the book, but one of the things we hear from founders, I mean, we know founders who've exited for seven figures, eight figures, nine figures,

And something a lot of them have in common is, all right, so I'm 35 or 45 or whatever age. I've sold this thing. I never have to work again. But I want to do something really interesting. And I want to have impact. And I want to have personal growth. And I want to impact people. But I don't want to do anything that's very hard. How do you do that? How do I never do anything that I don't want to do but have an impact? Because those two things, you know, the Venn diagram, it doesn't work, right? So that is a paradox in the course.

if you're worth $50 million, you can't just go complain to your aunt and uncle or your dad or whoever at the, yeah, I'm really unhappy. And it's like, well, why? You have 50 million in the bank. It's like, well, I'm unhappy. I'm unfulfilled, right? So that's something that you have fewer and fewer peers, you know, after you exit. But that angst is still really real. Like it may feel unseemly to complain. I'm lonely. I'm bored. I'm listless. I'm 35 and I have nothing to do that anchors my time. But it is a real human problem.

to try to figure out what makes meaning when all of your scarcity needs are taken care of and you are in security. And I think it's really...

worth diving in and helping people figure that out because obviously there are many mountains to climb. And David Brooks has this concept of the second mountain. Like once you have secured your first success, there's often still a second mountain to climb that is whether it's a legacy project or it's something that you want to contribute to the world that gives meaning to you, but also makes the world better. These are the kinds of things that we want to help people get into when they've had their exit is like the what's next question is not just another business. The what's next is like,

what's really meaningful to you in this phase of your life. How do you get entrepreneurs there? Because for a lot of entrepreneurs, what has been meaningful since they were very young, frankly, was financial success. It was sort of how they prided themselves or take pride in themselves, how they measured themselves against others. When that is off the table and there's no meaningful difference between having X and Y at the bank, it's all just more than you need.

how do you get them to this next sense of purpose? What are techniques? What are the questions you ask? Like take me inside the therapist's office for a moment. Yeah, yeah.

It's such an individualized process, but I think generally people have to have a bit of a pause, which is really uncomfortable. But when it's at all possible, I really recommend that people take three to six months of a sabbatical time between when they are finished at their company and when they make

like a real decision about what's next. There's such a tendency or desire to like solve the next thing before the first company is done or before the ink is dry on the deal. But it's often in the space, it's in the pause between the company that you're ending and the next thing that people begin to get a sense of remembering often who they are and what mattered to them before the business.

We, of course, look at family variables. Like what are the things that you want to be doing with your kids? Do you want to have kids? Do you not? Like what are the things in your relationships that might use more of your time and energy? And then what are the things that really bring you to life? What are the problems that you care about solving now? Um,

So it's a conversation, but it also does require a little bit of open space, which many entrepreneurs are pretty uncomfortable with. How do you deal with people who are in an earn out? So let's say they get a check. It's more money than they need to live for the rest of their life. But they've also signed up for a...

an earn out or they've rolled equity so they're still being asked to be involved in the company. There's not the motivation to the scarcity is no longer there, but they have to show up for work every day. I feel like an earn out is a little bit of a wind down, right? It's a kind of a process of like slowing down slowly

Um, and obviously with the NARNA, people are still really focused on making sure that they're meeting their benchmarks so that they get that payout at the end. But it is a slow off-boarding of the role that they've been in because they're often not in control anymore. They're not making all of the decisions over the company in the way that they were before they sold it. And so they're beginning to loosen their attachment to the identity that they'd had in the business. And it's

pretty rough on them, right? It's rough to make something and make all of the decisions. And now someone else is telling you how to set up your spreadsheets and like do the details of your job. It's kind of insulting. People don't like it, but it, it does begin to unweave or unwind the way that the entrepreneur is pretty, um, in union with their company.

And we talked about your business is not your baby, but neurologically your business sort of is your baby. There's some interesting studies looking at the brain function of entrepreneurs when they're thinking about their companies. It's very, very similar to how brains operate when parents are looking at images of their children. There is an attachment there. And so this earn out process

can be that kind of first year with the kid at college, like this beginning of the unraveling of those threads to create more space between the individual and the company. It reminds me, and this is sort of a morbid analogy, so forgive me, but it kind of reminds me of the death of a family member. Would you rather it, a parent, for example, would you rather it be over many years where you have a proper time to say goodbye and mourn together and eventually, but know that that's going to be an emotional just moment

really difficult period or would you rather rip the bandaid off find out that it was immediate and knowing that you didn't have time to uh to properly say goodbye but at least you didn't have to go through that i know you've dealt with grief in your other books um

What would you say to somebody who's trying to decide like, do I sign up for an earn out? I mean, sometimes it's not an option, but other times there is, you know, if you're willing to take maybe a little bit less for your company and maybe you can walk away. What advice would you give someone in that throes? I think I would ask some questions about how well equipped someone is to really structure open time for themselves. Because I think, again, an earn out provides this kind of artificial wind down period from the psychological perspective.

But if someone can create a bit of like a syllabus for a sabbatical of things that they might want to do for themselves in this interim period, from when they've left their company to when they're kind of like ready to do something else in this holding period, if they're able to, I'm going to read these books, I'm going to run this marathon, I'm going to train for this. If they're able to structure their time and like really follow through.

through on that, then that's kind of ideal. But of course, a lot of entrepreneurs aren't. There's a high rate of just attention jumping that happens in entrepreneurs. And the...

sort of the structure of an earn out can be really helpful to keep people doing something during the day while they are in the midst of this transition. I see a lot of entrepreneurs go from one challenge to the next. So their challenge is I'm going to build the cell. I'm going to have this huge, big seven, eight, nine figure exit, whatever they have that. And then it's like, okay, now I'm going to do a marathon. I'm going to, I'm going to climb Malcula Majora. I'm going to like start this another business. And they've got another big goal. Are you,

Do you think it's wise to have a new goal or is it dangerous? I like it when people have a new goal, but especially when that new goal is very separate from what they've been doing in their business. So it activates a different part of them. It actually uses different circuitry in the brain. So if you've been running a tech company and then you're going to run a marathon, that's a whole other part of you that's getting some life. The thing that we have seen...

in a number, unfortunately, of people that we know where they're buying a new business before the old business has closed or they're really like leaning into some new plan that's just a bit of like a rinse and repeat of the thing that they just did because it has that sense of stability of like, I know how to do this. And they're...

First of all, it's like a really strong recipe for burnout because you really are overtaxing the same circuitry in your brain. Burnout is a little bit of like a repetitive stress injury for your neurology. And so when people just do this rinse and repeat thing without even thoughtlessly considering what's most meaningful and they really are not resting, they're just not resting their brains.

That's, I think, where a lot of problems can arise. But if you are this really driven, and let's face it, entrepreneurs are pretty driven. They don't do real well with a lot of open space. But let's just take that driven energy and put it into a marathon or a mountain climb or a meditation retreat or writing a book of poetry. Just direct it somewhere else. I find that that is actually a way to rest. It's a way to give part of the brain a break and to mix and match some of the things that you're giving your attention to. Yeah.

Rob, when we first had our, I guess it was our last conversation on this show, I complimented you because you're among the people in my universe that I think have done a better job than most about making this transition from hard-charging entrepreneur,

building a SaaS company to really reinventing yourself with an amazing YouTube channel, podcast, which is now in its 10th, 12th year or something, 13th, 15th year. People haven't listened to startups for the rest of the year. They should. It's a great pod. And obviously, MicroConf, TinySeed, there's a lot going on in your world. How did you go from there to here? Like what

What was that journey like for you? The transition. Yeah. So I took six months off and that was a time to, this is something we talk about with entrepreneurs. It's the you that ran the business for however many years it was may not be the you that

that you should be in a year or five years from now. And that's why if you go and buy another business or you have another idea for the same type of business, all right, right now I run an HVAC, an HVAC contractor, and I'm going to start another one right after I sell this one, or I'm going to start an electric, or I'm going to do some other type of construction thing. It's like, really, is that what you want to do? Or do you want to do something slightly different? So for me, I took six months and I was saying, I'm never going to start another SaaS again. Never going to do it. I

And so, but I have to start businesses. That's just what I do, right? I've done it for

forever. So I actually looked, I started talking to the number two board game website in the world, number two in terms of size, and I was going to acquire it because it's a hobby of mine. And I started playing the guitar again. And so I played a bunch of guitar. I was going to acquire this board game site. And then I saw the economics of the board game industry and it is brutal. And so I'm used to, I'm pretty, we're pretty spoiled in SAS where the margin, you know, your margins are

are 80, 90%. So I was like, I don't think I can do the board game thing. And then of course I looked and said, yeah, I guess I'm just going to go keep recording this podcast I've been recording. I recorded episode, you know, 502 of the podcast, right? Or something. And I've been doing it for free on the side as a hobby for like 11 years and or eight years, nine years, whatever it was. And that's when folks like Sherry and some good kind of long-term friends of mine said, yeah,

You've been doing this for free. Like the podcast, you've already written a few books. You run this conference that kind of breaks even. Do you want to just do that? Why wouldn't you just do more of that? And that became kind of a spark. And then I went on a, we call them founder retreats, but I took two nights and went away. I didn't listen to any audio books, had no one else with me. Almost a silent retreat, although not intentionally. And I just thought for two, two and a half days about what do I want to do for the next act, maybe 10 years. And I was really like, man,

I have a lot of equity, like brand equity. And just, you know, like much like you have in this, in this room, I have a similar type of brand equity in my space. And I was like, why would I give that up? I still love it. And so that became part of the process of like,

what's the next act, right? So at the time, MicroConf was just a conference and a podcast. And then it was like, the next act was let's raise a fund and actually invest in startups. What's the biggest difference in you? I'm going to ask you to also weigh in. I'd love to see some self-reflection for Rob. What's the biggest difference in your personality between when you were a SaaS founder and now? What's the biggest difference?

I'm so much less stressed. So much less stressed. I deal on a day-to-day basis with things that are... Every dollar amount has an additional zero or two compared to what I used to deal with. Every decision impacts people's lives, whether it's mine or others, in a bigger way. And none of it seems to phase me anymore. What's up with that? I think it was two things. One is deep, deep, deep down,

I have this now groundedness of like, I know that if everything imploded, we're still fine. Like it's way, I never think I'm going to walk away from it all, but I could walk away from it all. I never want to, but I could. And if it went to zero, we'd be fine. You're talking about being financially free. You've got that sort of asset. Exactly. So that's something at my core. I think growing up again,

not financially stable you know we always had stuff to eat but like hey i drank powdered milk as a kid you know i was like one one notch above uh you know being being concerned about food that was always that was almost most of my adult life scared there was no fallback there was no if we missed rent like we didn't have parents to bail us out right so i think that alone settled it the

The other thing is after the experience of selling Drip and the stress that it took on me and the family and our relationship, I remember telling Sherry, I said, I'm never going to do that again. I'm never going to be that person who I was for those years. It was a couple of years where it was really hard. Cash strapped, not meeting payroll almost, and then the acquisition, and then the earn out, just all of that. It was like a big compressor, a pressure cooker.

And I said, anything I do from here on out, I will never feel that way again. And so I decided, and then I went to copious amounts of therapy, if I'm being honest, every week. Thanks, Allison. I'm years into just, you know, unpacking all this stuff that you build up. So it took some work and it took some, a decision, I think a really deliberate decision.

Okay, Doc, how well does he know himself? He's amazing. He knows himself well. I think I would say you're much more present now, which is, I guess, related to not being stressed. But I think in the life of running a startup, it became just like series of one problems after another, and you kind of problem hopped, and you needed to. But now it feels like you're much more present.

of the humans in your world, myself and many others. But I will maybe just echo this like plug for therapy, especially at this phase of life. I think many people who are starting and running a business, you're just in motion. There's so much momentum and energy in the building and the growing and the getting ready to sell. And then there's this moment when it kind of stops.

And sort of like if you're driving a train, when the engine stops, all of the sort of the cars are going to stay in motion and smash up against that engine. And that's a little bit of what happens, I think, with entrepreneurs when they end a business is all of the things that they've been out

running, all of the shadows, all of the trauma, all of the old stories of trying to impress their father, prove it themselves or whatever it is for that individual. Like it kind of comes crashing in on them when there's not so many things to distract.

And that's also this danger of like jumping into the next thing is like you're always out running the little kid that you are somewhere inside of you. So it's an important time in these transitions to like spend the time to go to therapy and figure yourself out. So you're making conscious and free choices. Yeah.

I could talk about how do we figure out the date and decide to sell for ages. But I want to move to the second of the three areas, which is this idea of like, how do you keep yourself together during the process? And what are the secrets? Because not only, I mean, obviously a lot of the book is...

focused on the psychological impact of selling, but there's also a lot of practical things. One of the real practical tools that I love was this idea of like telling the story of your business. Who's best to answer that question? Do you want to, if you want to start? No, you got it. That was your concept. Yeah. I think. So what is telling the story? So people understand what you mean by that. I think it's this sense of, yeah,

you know, talking, well, talking about the beginning, the middle and the end of your business and what it is that you're trying to accomplish in the making of your business. And you're often also telling the story externally, like you're telling the story to potential buyers, like this is what this business is. This is what it means. This is, you know, and the, the way in which you are, um, it's like coming from the inside out, um,

Yeah. And a big piece you talked about, because obviously sharing and collaborating on the book, but different elements came from each of us. And you talked about actually writing out the story of the business, which I never...

I had never thought of, but then when I, after I sold Drip and decompressed a bit, I actually did start writing and it was for me. And I said, and I've never shown any of that to anyone. And I wrote it knowing no one would ever write it. And I'm sorry, knowing no one would ever consume it. So I said, I gave the details on the times I was super mad at my co-founder. And I gave the details on there was a competitor that ripped us off and I'd name him by name in this thing in a way I would never say in public. And I mean, I went in and I was like,

It was a harrowing journey of mystery and intrigue. And when you said, oh, you should write down the story of your business, you don't have to do it to the extent that I did. Mine's like 10,000 words. It's like, you know, it could be a short story. I think for entrepreneurs, it can help. Not only does it help you process it like journaling, but it's also...

It's a bit of a memorial, almost a eulogy, if you will, of like, this is the story of this amazing thing that I birthed. And then I sent off on its own. And here now I have this artifact of what I accomplished. But it also has practical implications because it can be part of the narrative you talk to acquirers about. This is the story of our journey. It's not just zeros and ones, a profit and loss statement of balance sheet. This is actually...

a journey, a story that we've gone on. And I think we all buy with emotion, we justify with logic. So acquirers, I think, are the same way. They're buying an emotional story. And if you can articulate that in a compelling way during the process of selling. I would agree. The other idea I wrote down was this idea of the walkaway mindset. Maybe walk through what you mean by the walkaway mindset.

It's so much pressure when you start getting these numbers, right? The number gets written on a piece of paper and slipped off the table to you. And it

many people just sort of start spending that money in their mind, right? The dream of possibility. - A Porsche, for example. - The Porsche, right, right. For themselves and for their partners, you know, often it's the partner who's booking the wonderful celebratory vacation before the check is cashed. So I think it's imperative that people really keep fixed on this idea of until the money is in the account, the deal is not done.

and the ability to walk away at any point. And it, I think, becomes really important for people to really get clear about their values. What do they want? Not just the dollar amount, but the things that matter to them in terms of what happens to the team or what happens to the brand, if those things are important, that they are known at the beginning of the deal. So that if those really key, I must have this, if those get taken from the deal, you're ready to walk away.

And it gives you a lot of power when you are psychologically free, psychologically prepared to step away at any point. Rob, what were your lines in the sand when it came to Drip? I mean, did you have an employee, you know, hard line that you said all these employees must be hired by Leadpages or did you have anything like that? That was one of my, yeah. I mean, my team was

My team was loyal and that would have been a real struggle for me. I don't think I would have sold to an acquirer if they were going to fire the team. We'd only worked together for a few years, but that was a deal breaker for me.

I didn't want our customers. I mean, a lot of the customers that had trusted us in the early days were personal friends of mine. So I said, don't screw our customers. Don't screw our employees. I had the luxury of being able to say that. I was willing to keep the business and keep going and raise that round of funding. How did you pay for that though? I mean, was that just a verbal commitment or did you- Verbal. Verbal. It was verbal. Yeah. Luck, I also had this luxury. I was negotiating directly with the CEO of the other company. So the other company was about 175 people. Yeah.

And it was doing tens of millions a year in revenue. It's not like I was negotiating with Target or Best Buy or some huge company where it's like you're dealing with someone and then verbals go out the window. So I did have to trust a bit that that was at least- You could see the whites of the eyes of the CEO and say, make this commitment to me. Yeah. And I guess if they'd agreed to the deal and then laid people off, I would have been really upset. But really, what recourse would I have had? Yeah. Yeah.

- Sure, you talk about the brand and do I keep the brand? Is the acquirer gonna keep the brand? And I know that this can be very polarizing for a lot of entrepreneurs, in particular when their surname is in the company name.

I remember I sold a company where my surname was in the company name. And I remember when the acquirer came to me saying, we're going to change the name. And I was thrilled that they were going to change the name. But they were really nervous about having the conversation. I could tell they were kind of amped up to have the conversation. I'm like, no, no, you get rid of my name on this thing because I don't own it anymore.

What's your experience with people whose surname is in the company name, have real attachment to the brand, that kind of stuff? Yeah, that's that interweaving of the identity with the business, right? The business is an extension of the person. And however we do it, we have to unwind it so that people can feel free to go about their lives and let the business go its own way. And it is a journey for people.

especially when your name is attached or you've been the face of the business and all of your customers, you know, when...

after Drip was acquired, they did a rebrand and they changed all the colors and they changed all the logos and all of the loyal old customers were like, what is this? It doesn't look right anymore. And would complain to Rob and Rob's like, I don't have anything to do with this anymore. But I think hopefully in the exit process, in the closing of the deal, it is sort of like you experienced where like, I am separate from this. Take my name off, take my face off,

Let me be free from it. And so to bring founders along and help them sort of see that as a positive, as a necessary part of launching the business, launching the kid to college, like there should be some separation and that's healthy. But there's some loss in that too. And I think one of the themes of this book is like all good things involve a little bit of loss.

Having a wonderful exit for your company is still some grief for you. There's some emotional process of it used to be this way and it's not going to be that way anymore. So let it hurt a little bit. Let yourself have the moment of quiet grief and then...

Let it go. Move on and do the next thing. Rob, how did it feel when they rebranded Drip? I was letting it go. Really, it must have been hard to see. Here's the problem. Just between you and I, they said, we have this fancy agency that's going to redesign everything. It was called Drip. The logo was a nice little drop of water. It was totally appropriate. It was really basic, but it was nice.

And the agency had this concept that was so amorphous and it looked like an oyster shell and with a bunch of ridges. And I was in a meeting like, what? This doesn't make any sense. What are we doing here? And actually, as the founder, even though I didn't own it anymore, I still carried some weight. And so I said, how about we just do something that's kind of like a drip? Because they wanted to be able to...

own it visually, right? And there's a bunch of things that have a drip in it. So they said, how do we make it a little more custom? You can go to drip.com and see what the logo is. But I said, how about do something XYZ? And I kind of threw it out. And they eventually did run with that, which I appreciated. They changed all the colors to like pink and other stuff, which was a whole situation. I got a lot of complaints. I...

I had a tough time with it, but I did let it go, you know? And then I got the old Drip logo tattooed on my arm here. It's the only tattoo I have of any company. So eventually I moved on. But this is my reminder of the old days. The real deal. Yeah, the real deal. Sherry, what's an exit uniform?

I love this process of helping people think about how to get themselves in the exit mindset when they're doing exit work. Because, of course, some of the things that can be really challenging about this is you're still running the company. And you need to run the company as if you're always going to run the company. So to stay in that present and future mindset in your running of the company. But if you're trying to work on an exit deal at the same time, you're really shifting the

Timelines are shifting jobs. You're running the company over here and sort of killing the company over here not killing it but like preparing to leave it and so I think it's really helpful to have an external cue that helps you shift your mindset whether that's a baseball hat or a piece of jewelry or something that puts you in the mindset of like right now I am in exit mode. I'm negotiating a deal I am thinking about the process of getting this company launched to a new owner and

And the external cue helps you put on a certain set of personality characteristics or qualities. It helps you focus on getting that job done. And then you take off the hat or take off the jewelry or shift out of your exit uniform and go back to your day job running your business.

So it helps to sort of be in the two modes at one time if you can make some external cue, remind you of which mode you're in. That's so cool. Just having something physical that you literally wear put on that sort of sends a trigger to your brain. Okay, now it's game on. We're talking exit. Yep, yep. I've had people like frame $100 bill and just get it out when it's the exit conversation time and then put it in the drawer when they're working on their business or just other cue things that help reorient your mind.

Yeah. Love it. Love it. Let's talk about after. So the check clears, everybody's happy. The champagne gets corked and, you know, brightened off under the sunset. What are the biggest mistakes you see entrepreneurs make in the after shock of selling a business? Not to celebrate.

Not to celebrate well, to move too quickly into what's next, what's the next order of business, what's the next challenge. Celebration is a really important part of this process. And again, it often is difficult for people who are so used to being in a fight or struggle or building an intense process of working towards something. In order to really pause and celebrate, you have to sort of stop

stop that level of struggle or that level of seeking. So celebration is important. It signals to yourself, like, I'm safe. I did it.

A job well done. So there's something really profound in that process, whether that's a party, whether it's a car, whatever it is for you, but to really take seriously your own accomplishments and not overwrite it with just the next challenge to solve. Long time listeners of this show know I always ask about the trophy, and I genuinely agree that there are some...

you know, physical manifestation of the sale that you can remember a tattoo, a car or whatever that is like, yeah, I did it. It's forever. And this is my physical thing that I can kind of touch and feel that reminds me of that. Rob, I mean, you've personally gone through this a few times. You've also seen lots of tiny seed entrepreneurs go through this. What do you see as the big mistakes entrepreneurs make on the back end?

not taking enough time off after and or even just having this deep existential dread and worry, what am I going to do next? Because usually I tell them, you're an entrepreneur. You'll figure it out. You solved all these problems all these years creatively. You're going to have a next act, whatever the next act is. Maybe it's on a beach in Tahiti. Maybe you start advising and writing books and recording podcasts. Maybe you do something, but you're going to be just fine. Trust me. That's usually the

that dread that makes them panic and want to start the next idea before the other idea is sold. And it's like, just give it, give it some space. What about the money stuff? What do you see in the money stuff? No, that's what I was thinking of. The other thing that we see people make mistakes in is not really updating their money script. Like there's this script. Well, it's like your relationship with money. So I,

As an entrepreneur, you're spending a lot of time trying to grow money, get money, keep money. It's an acquisition model of money.

After an exit, if there is a pile of money, your orientation towards that money changes. It's more about how do we keep that money sustainable or help that money to work for us. The nature of your relationship with money is really different and it requires this new level of skills, this new set of mastery around money that people aren't often thinking about.

So they might be making the same kinds of bets that they were making early on in their company, or they're treating their money as if they were still running their business when it becomes a different story after that business is sold. Yeah. We see folks who burn through $10, $15 million very quickly, or who have sold for, say, $15 or $20, and they're miserly. They don't get the guacamole. They don't get the guacamole. They don't buy the shirts. Yeah.

But they just hold on to it. And that's an old money script. If you grew up poor, now you have a bunch of money, but you don't spend any of it. Then why do you have the money? It's no fun, you know? And so it's like, how do you calibrate to the reality? And that takes a while, right? It takes months and months, probably some conversations of like, I don't have infinity money.

Even if I sold for 20 million, it's not infinity. And, but I also have enough that I can maybe relax and, you know, make some, you know, some expenditures that would have seemed foolish six months ago. How did you choose to deal with your kids when it comes to the money stuff?

We have not told them. We've never told them the sale price, honestly. And they don't know how much we're worth. But they do know, obviously, we're fine. We're well off, affluent, however you want to describe it. We started education, money education with our kids when they were very young, like four or five. There's some great videos on YouTube by this channel called Cha-Ching. Cha-Ching? Cha-Ching. Okay, we'll put that in the show notes. It's these animated videos. And there's like...

12 of them, 15 of them, but like we, they're music videos and we would just watch them with our kids. And then there's a book and I forget the name of the title, but it's kind of like the five money personality types might even be for kids. Cause something about, yeah. And we all took the personality test and you learn that like, I was the saver risk taker, which is like, oh, that sounds about right. I'm the risk taker. Cause I'm an entrepreneur, but I'm pretty, I was pretty miserly with money and you were like a saver. I forget what yours were, but each, it just gave us a

you know, the ability to talk through each of these things. And one of our kids is a spender and one of our kids is a saver. And so I think educating, I mean, I think if people often ask me, should they teach entrepreneurship in schools like in, you know, here in the U.S.?

And I'm always like, sure. But first they should just teach personal finance and budgeting because we, I'd never learned that. Like I did, we all had to figure it out, you know? So that's kind of my, we, we just educated our kids from, from the time that they were young. And then the other thing we talk about is like, look,

You're not going to, when you graduate from college or go off on your own, you're not going to be able to live like we live. Like we struggled for years and lived in crappy apartments and you weren't there to see that, but like we tried a reality check and we

We'll see. We're still working on it. They're 14 and 18, so we'll see if this takes. And I think the conversation fits in a larger story about your values. Like we really value generosity as a family. So we'll sit down with our kids and we'll make Kiva loans or think about different organizations that we want to back.

Like if you have this pile of money, let's say that we give a certain amount of it away and a certain amount of it we save and a certain amount of it we spend and help them to really be strategic about that. But the values of generosity, the values of stewardship, the values of understanding the value of something. So Rob does a nice job when our kids were little, he would play this game with them of like, how much do you think that is? Like a muffin versus a car versus, you know, just this sense of like applying the relative value

dollar amount to these different items in your life so that your kids have a sense of where it's from. That said, one of our kids got invited on a school trip to Italy and he's like, I've been to Italy like six times. Like there's nothing there for me. And I was like, Oh no, we have not done well. Or have we? I don't know. It's hard to tell based on how you measure it. I think I could talk to you guys for hours. This was a pleasure. The book is called exit strategy for

March 11th comes out on Amazon. You can pre-order it today. Dr. Walling, Rob, thanks for doing this. Thanks so much.

And there you have it for today's episode with Rob and Sherry Walling. If you enjoyed today's podcast, be sure to hit that subscribe button wherever you listen to today's show. And if you want to help support this podcast, I'd encourage you to leave a rating and review. Just as a note, because it was a live recording today, we do not have a YouTube episode. So the only way you're going to hear this episode is if you're listening to it, it's an audio only version this week. But to check out other episodes along with the video, be sure to visit our YouTube channel at Built to Sell.

For show notes, including links to everything referenced in today's podcast with John, Sherry, and Rob, you can visit their 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

head over to valuebuilder.com. I'm Colin Morgan, and I look forward to talking to you again next week.