Episode 740 | My New Book! The Entrepreneur's Guide to Selling Your Business Without Regret
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Welcome to Startup to the Rest of Us. I'm your host, Rob Walling, and in this episode, I sit down with Dr. Sherry Walling to talk about our new book, Exit Strategy, The Entrepreneur's Guide to Selling Your Business Without Regret. The Kickstarter for this book launches today. If you want to back it or you're interested in checking out the tiers and seeing all the amazing copy that Leanna Patch wrote for us, head to exitstrategybook.com.

I hope you'll consider backing this book. I talk about it in the conversation, but I'm really proud of the end product of what we've put together. And we put a ton of time into it. We interviewed a lot of entrepreneurs across different business types. It's not just about selling SaaS. It's about selling, for the most part, any kind of business. And I'm really excited to get this into the hands of folks like yourself, entrepreneurs who

may be thinking about selling, maybe in the midst of selling, or who have sold and are trying to think about what's next. Or even if you are not thinking about selling today, having this knowledge in your head as you build your business can only help you. So exitstrategybook.com, it'd be amazing if you decide to back the Kickstarter. Before we dive into the episode, MicroConf Remote is going live on

on November 20th. Remote is our virtual event. We run it twice a year, and this one is focused on early stage marketing. I'm going to have three speakers, each doing Q&A after their talk, plus our founder by founder sessions. This is where you get to meet other founders in the MicroConf community. It's our digital equivalent of the hallway track.

Dr. Sherry Walling, thanks so much for joining me on the show. My pleasure.

So we wrote a book, another book. This one's called Exit Strategy. And I think a couple of clarifications right off the top. It's not just about selling SaaS. It's about selling any type of company. We interviewed folks who sold agencies. Yeah, professional service companies, a sort of chain of gyms, brick and mortar businesses. This book was really born out of my conversations with clients over the years who said things like,

this is the hardest thing that's ever happened to me, or I feel like I'm going through a divorce. And that's not limited to SaaS. The challenge of this process is pretty universal for entrepreneurs going through it. Right. And since the book focuses so much on the mental, the emotional, the psychological, the without regret part,

of before selling, thinking through, should I sell? What's it going to look like? Of during selling, oh my gosh, this is a pressure cooker. As you said, it's the hardest thing I've ever done. And then the after, like recovering, working for their choir, working,

what to do next. Those things apply broadly across pretty much any type of business that is not just a, you know, if you have, look, if you have a little 10K side project or some tiny little thing, is it this agonizing? No. But this is about having a, like a big, a bigger exit and, you know, maybe having a team and that kind of stuff. And that applies to a lot of different types of businesses. Yeah, it's about

the story of building a business that becomes very valuable and sellable. You know, people offload apps here and there or do things on a pretty small level. But this is the story about when you build something that is part of you and

and you put all of the blood, sweat and tears into making something that's very valuable and then what it feels like to go through the process of selling it, of releasing it, of putting your life together afterward. And there are a lot of really good books about selling your company. John Worlow has one, Art of Selling Your Company. Dan Andrews wrote Before the Exit. Bo Burlingham wrote Finish Big. So...

Why, I guess, what's our unique take? It's a two-part question. Like, why did we decide to write this in the first place? And then what is our unique take that you think we bring to the topic?

I mean, I think the pairing of you as a serial entrepreneur and me as a clinical psychologist is really unique. I think there's a lot of nuance and mental sort of analysis in this book that is different, or at least we are adding something pretty significant to the conversation when we think about the kinds of processes that people are going through when they're going through a major transition in the middle of their professional lives. You know, you've also been on the front row of

hundreds of exits at this point in your work in Tiny Seed and through your connections at MicroConf. And so I think the number of reps that you and I have done together from very different perspectives is unique and really shapes what we're offering in this book.

Yeah, and you and I, it felt like we were having similar conversations over and over where you were like, hey, one of my clients is thinking about selling or going through the sales process or has gone through the sales process and this is happening. And I'm like, well, didn't that happen to someone else? Or that did happen to a friend of mine that I know through MicroConf. And it was like, we would get asked questions of like, well, what book should I read? Or what resources are there around this topic? And it kept being like, well, obviously there's these good books, but they don't have...

Maybe the very specific opinions that you and I have about how to try to do this well from a mental health perspective and realistically without regret is in the subtitle for a reason.

I think what's also interesting is that not only have we been in this sort of consulting seat in lots of exits, but we've been through an exit. You've been through it directly with Drip. And I've been through it as your partner, as your significant other. And I think that's a piece that is often overlooked in business books.

is the relational impact of some of these transitions, not just on the founder, not just on the founder and their team, but on their family. And this book isn't a heavy, heavy focus on that, but it is woven through. And it's, I think, really shaped by our experience of having done the reps ourselves.

and then done them on behalf of other people. Yeah, there's definitely a running thread through this book of A, how difficult this process actually is, and B, how much of a toll it takes on not only the founder or the entrepreneur, but on the people around them, their family, significant other, and so on. And that it doesn't have to be that way. So the default setting is this is hard and can be surprisingly destructive. Yeah.

But it does not have to be that way. So I think that's the whole, you know, the point of the book is to help offer the ability for people to like open their eyes, look to see what's happening, do some self-assessment, and then have some tools to help make more aware and more intentional choices about how they go through this process. And if someone's starting a business today,

And, you know, they're not going to sell it here in the next 12, 18, 24 months. I still feel like there's value in experiencing this journey alongside the entrepreneurs that we interviewed for the book, right? What did we interview? 15 people, 20 people? I mean, we did a lot of, it wasn't just out of your, in my head. I mean, we did a ton of legwork to pull it in. And there's a lot of stories, a lot of quotes.

You know, I think this book is actually about how to have a healthy relationship with your business. And that's where it's relevant to anyone at any phase of their entrepreneurial journey. I think it would be a super great book to read at the beginning.

Because it talks about this balance between going all in and being very careful and very attentive to what the business needs from you and how to protect it well and how to think about your team. And also on the other end of the spectrum, this de-identification between your selfhood and the business that you're running.

And if you can strike that balance well early in your business, I think you are just set up for success in a lot of ways, not just in your exit, but in your mental well-being and balance throughout the course of the journey. And the book's not out yet. And the reason we're talking about it today is the day this episode goes live, our Kickstarter for this book goes live. And so folks can head to exitstrategybook.com and there'll be a link there where they can go straight to the Kickstarter page and

And they can back the book. We're going to have it in three formats, right? We're going to have a hardcover run like I did with SAS Playbook.

where we have an offset printer. It's just amazing. It's like the same printers who print for, you know, any big publisher. And so the quality of the book is just really outstanding. Do you have it there with you? I was like, I should have it in my hand. Yeah, I have a digital copy of it that, you know, is like a print on demand version, but it's so neat to finally have it here in my hands. And, you know, it's a meaty book. It's a couple hundred pages, right? 250 pages or so.

But with the Kickstarter, we're going to have an audio version that you and I are going to read together. Oh, isn't that sweet? It's going to be adorable. It's going to be so adorable. I'm sure we won't have any arguments about it. Nope. During, we're going to, I'm going to be like...

Josh, please edit a lot of any arguments out. But I do like to riff on the audiobooks. We haven't recorded it yet, but that's something I'm looking forward to doing with you is kind of riffing on different things. And then, of course, we have an electronic, like a PDF EPUB version. But in addition to that, we're offering things that like we've never offered before, right? Oh,

All kinds of opportunities to hang out with us, either in some Q&A sessions where you can come and ask questions about your business, your exit, things that you're thinking about to one or both of us. I think we have an option where both of us are involved. All the way to the opportunity to come to beautiful Minneapolis in the summer and do a founder retreat with the two of us together. So the dates and all the details about that are on the site, but

I am personally really excited about doing it that way and the kinds of interactions that it allows us to have with people that we might not necessarily bump up against in our day-to-day lives. Yeah, I would agree. At one point on this very podcast, it was probably 2021. Yeah.

I did a call for anyone who is in the middle of an exit or really on the cusp of an exit. If you're thinking about selling, just email me and I will send you a 20-minute Zoom link and I will Zoom with any and everyone who's going to do it. And part of that was I wanted to talk to more founders who were doing it. But the other thing is I said, this is one of the most important moments slash transactions ever.

of your life. And I talked to so many people who were like, I'm going to sell that. Like I started this kind of listening to the podcast and thought it'd be a little side project. And I got an offer for $9 million. Right.

And I was just like, what? And so I had these great conversations and part of those, you know, anonymized and everything, like go into the knowledge bank of writing this book. But I realized through those conversations, even more the need for this. And so we've been, you and I've been talking about writing this book for three, four years at this point. And it took us, what, about a year and a half, I guess, to get it all put together. Yeah.

Yeah. And it was such a fun process. You know, there's obviously lots of different ways to write books, but because we spend so much time talking to each other, podcasting and things like that,

But I really enjoy the process of like having a really detailed outline and then going chapter by chapter and basically recording audio of it and transcribing that and then turning that into the written word. So I think it's a fun way to collaborate together. And so there really is a mixture of both of our voices in really every chapter, even though some chapters are more based on my expertise and others are based more on your expertise. There's still this sort of weighing in and question asking of the other person, which I think

helps it to be a much better product because you have thoughtful questions that are guiding the development of content.

Yeah. I'm super, super proud of this book. Like I think it turned out really well. Potentially, I hate to say it, but almost like better than I could have expected when we started, which is how I like. Wow. Look at you in the low expectations. I know. But I like having, I don't know. I just, I like it when it's an end product and it's like, yeah, no, this is, this is dialed in.

Something that I really like about the book, as I said earlier, there's the before, the during, and the after your exit. Those are kind of the three sections we have. And one part of the before, chapter two, when is it time to go? And we look at external and internal cues for thinking about when you may want to exit. And I remember putting this chapter together, and one of the things that

is interesting is that you and I have seen so many people sell that these things just kind of rolled. It was like, let's brainstorm. Why do people sell? And then run this list by other people I know who've sold. Are we missing any of these? So it's like, I feel just really good about the list we put together. Some of the external cues we mentioned are, you've built something amazing. The business needs more capital. You're no longer the best person to run the business. The competitive landscape shifts.

a change in life status and another opportunity arises. Just to give folks an idea of the kind of... And then we dive obviously deep into each of those and how those might come about and how to think about them if you're in that situation. And also assessing like what are helpful motivations to sell and where are... So we talk about some of the internal cues like existential restlessness or energy levels, some even burnout issues.

And when maybe those things lead you to want to sell because you want out, but they're not always the best for you in the long run or the best for the business. And so thinking through just how to be an observation, an observer of your own mental internal process, and then what to do if you maybe want out, but don't necessarily, you know, it doesn't make sense to sell right now. So we sort of dive into some of those options. Yeah.

And in typical Dr. Walling fashion, this is something I've never done in my books, we have making it real at the end of each chapter where it's like, look, I just told you a bunch of really interesting things. And now there are questions to think about and to journal and to take action on. In my last book, Touching Two Worlds, I worked with a traditional publisher and they really pushed me on this. They were like, your stories are great. Thank you for the wisdom. But what do we do about it?

And I frankly like the challenge of helping people really apply it to their specific situation. So it's all fine and good to absorb content, but if you can't do anything with it, then it's really not in your best, highest service. So we've worked pretty hard on those sections to give you at least some journaling prompts and thoughtful questions that will help you to go deeper with some of the content that we've presented.

And throughout the book, we try to set expectations of what an exit might look like. And I find that we repeat it over and over so much that eventually we had to take it out at a certain point of like, we just can't keep saying this, but this is really hard. This is going to be really hard. Isn't this really hard? Wasn't that really hard? Like that felt like a message of the book. Why do you think that we have to say that so often?

It's such a dream outcome, right? I think the like stories that persist on social media or Twitter of the founder who sells for a huge bucket of money and rides often to the sunset or, you know, starts a farm in Austin. But it has this glow to it. And...

I just think that it's kind of like giving birth. Like it has a great outcome. Babies are great, but it's a grisly, bloody, messy process. And because we've so glorified the end result, I don't know that we collectively as an entrepreneurial community have kind of told the truth about the process.

Yeah. And I think I know for me, a chunk of the entrepreneurs that I talk to, the founders I talk to who are about to exit, I'll tell them it's going to be really hard. And I've had people tell me, yeah, not for me. It's not going to be hard for me. And then come out the others. I got it.

I'm not attached to my business. I'm rational. I'm objective. This won't be hard. I'm not that worried about it. I'm so prepared. And then come out the other side like, oh my gosh, you were right. And it's like, I know, I know. It really is this hard. It always, and it starts relatively simply. I mean, the wonderful story is somebody gets an LOI and like you agree quickly on the terms and-

You know, it just feels like it's going to be smooth sailing. But inevitably, there's some series of disruptions in the deal that require sleeveless nights and long conversations with lawyers. And it's just the way it goes. Inevitably is pretty much my experience.

And the interesting thing is, as entrepreneurs, we do hard things. And we think, as you said, that it's like we can logic our way out of it or that we can just, you know, we've done hard things in the past and I know that I can do it. But you get in this position where it's like, all right, I've signed this letter of intent for $10 million and we're going to close in 45 days. 45 days. I could do anything for 45 days. And then suddenly you find that you're like, whoa, there is a lot of uncertainty here.

And, well, there are a lot of people that are kind of pissing me off here with the pushback on the thing and asking for the stuff. And you start to get in your own head. People start sleeping like they're entrepreneurs who you can't sleep because you're so stressed about it. And then you get towards the end and everything's up in the air still. And then it's not 45 days. It's 50 days. It's 60 days. It's the lawyers on vacation. Yeah. Yeah. And so that is something we talk about. We have a, I mean, you know, obviously there's what, 40s?

14 chapters in the book, but, and only two of them are really about kind of deal structure and deal points. Because again, there are really good books like The Art of Selling Your Company that cover that type of stuff. So the vast majority of the book is thinking through whether to do it and how to do it well, and then how to be on the other side and ask what's next. But I really like in chapter seven, it's called Collateral Damage Minimizing Negative Impact.

And we talk about minimizing negative impact to your mental health, your physical health, your family, your team, your company, and the deal itself. And then we have specific strategies for that, right? It's learn how to time travel, take on an exit process,

project, go on that vacation, let your partner in on your emotional state and other things. A lot of those came from you. I mean, I was pulling out the, here's all the collateral damage it can do, but really the strategies for how to minimize those or how to stay healthy. That's a lot of that comes in your voice, right? Because that's a lot of your work. Yeah.

Okay. It really is a challenge to construct some internal buffers around your own anxiety, especially for entrepreneurs who have often used their anxiety or their agitation as fuel to get things done. But in this process, you can only get done what is on your to-do list in that moment. And then you're waiting on all of these other people, on the buyer, on the broker, on the whoever else.

And so it's a really abrupt, difficult lesson in holding agitation and anxiety when there's nothing really effective to be done with it because there are things that are happening or that you have to wait for that you can't control. And so a lot of these strategies are around what to do with that energy, frankly, how to like not let it eat you alive and not let it

spin out of control in a way that hurts the people around you and leaves you trying to push the deal forward or being thoughtless or reactive because you are uncomfortable and agitated. I like that you bring up that point of there are things outside of your control that you just can't do anything about. Because again, as entrepreneurs, as founders, we start companies, some of us, because we want to control everything.

And suddenly you're in the middle of a process where it's like some clown shoes lawyer on the other end, as you said, is on vacation or has taken four days to turn things around. And you're like, dude, this is $10 million. This is like the biggest thing of my life. This is my life. But it's just another day for them. It's just another deal. And it's just another email. Yeah. And we talked through in chapter 10, we have the 3am what ifs. And all of these quotes are things that you...

You and I have either heard from entrepreneurs or we heard in the interviews, you know, as we talked to entrepreneurs, things like, what if my team falls apart? What if the deal falls apart? What if I'm not up for this? What if this deal is my only chance? What if I take a bad deal? And there are more. There are a lot of 3M what ifs.

Another thing that I don't think is talked about enough is life after the exit. We have a chapter called Purgatory. It's sad. It's about working for the acquirer and reporting to a boss. You lose control of your team, of your company, but there are also upsides to it as well. And that was something that I'm really glad we covered. Yeah.

You know, I think this question of life after the exit is maybe some of the content that I'm personally most proud of that feels like a real contribution to this conversation around exits that I just haven't seen dealt with as thoughtfully and as carefully as we've dealt with it. And I think coming from my life as a psychologist...

There is this deep appreciation for what it means to be going through a really significant life-changing developmental disruption at a time when like your peers aren't going through that. Exits are such extraordinary events. They're just not commonly occurring.

And so it's like getting divorced or sending a kid to college or watching your parents pass away. It's this major reworking of your identity and what you do during the day and what matters to you. But you're not doing that along with your peer group, right? Like you and I know lots of people whose kids are going to college because that's the age group that we're in.

And so this idea of going through a major developmental transition alone is pretty unusual and kind of extraordinary in the human experience. And so I think giving people some grounding in that, some understanding and some perspective about why this reworking of your entire life midstream is so challenging.

and then what to do about it, how to avoid the isolation and how to avoid the kind of spin out that can happen when people lose perspective about just how significant this transition is.

Yeah, I like that you call that out. A lot of people have kids who go to college. A lot of people have a parent who passes away. A lot of people get married, get divorced, have children, whatever. There's a lot of events that completely can turn your life upside down. And so few people sell a company. And so few people, I mean, almost no one else is selling a company when you are. And what's interesting is

During the sale, again, there is only so many people you can talk to. We do have a whole chapter on support team and how to put together people to support you. But afterwards, there can be this sense of,

shouldn't I be happy now? Hey, you know, my company was really stressing me out. I don't have to work on that anymore. And I have this huge pile of cash in the bank, but now I'm unhappy. We have this expression whining on the yacht. It's like, you can't just go on Twitter and say, man, sold my company for $10 million. Life sucks. And I'm so sad every day. I'm so bored and lonely. Totally. Even if that's really the case, right? And we talk a lot about that of

first day of the rest of your life, like how to recover from this and how to find a peer groups. Cause there are other entrepreneurs who've gone through this. And to re-anchor into meaning, like you're, you're getting a second act. You've built something, you've gone through the whole journey and then sold it.

And it is an immense opportunity to, you know, to use the phrase from David Brooks, to climb a second mountain, like to do something else that is interesting and meaningful and valuable to you and to your family and to the world around you. But people have a complicated relationship with that. Sometimes people rush. They can't tolerate this in-between space, the patience of really considering what's next.

So they buy a company before they finish selling their other company. We tell this story in the book. Or they get so like churned around about what to do next that they spend years kind of

spinning their wheels, not doing anything. So this conversation about what to do next is really important because it does help people re-anchor to what they want their lives to be about in this next iteration. Yeah. And we talk about it in, well, we talk about purgatory of, hey, you're working for the acquirer still, where it's this weird in-between of I've sold, I have this money, I don't control the company anymore, and I got to figure out now how to be an employee. And

But then once you do have that break, assuming you move on from that at some point after an earn out, then we talk about how to recover, right? How to rest up, how to physically recover, connect with yourself. And as you're saying, kind of take stock of the past, embrace the present and look ahead and ask yourself, what's next? And with what's next, there are a couple traps we call out that we've seen over and over. It's the prove I can do it again trap. And

And the sail away forever trap. Why do people fall into these same traps over and over? It's so deeply part of us, this story that we create about who we are because of the business that we've built. And so the Prove I Can Do It Again is about like, look how good at entrepreneurship I am. Look how creative. Look how, you know, it's just look who I am based on this outcome that I can create. And-

the pressure to try to do it again just is to reinforce your perception of your identity. And then the sail away forever trap is a little bit like, I don't need any of it. I'm just going to go retire on a beach in Mexico, which is also like not true for the vast majority of entrepreneurs. It's, it's not an accurate read of themselves. So it's about like needing too much to be an entrepreneur in the prove I can do it again sense, but

or not having a proper respect or reverence for how deeply you are a maker and a creator in the sail away forever trap. So finding your balance between those two edges of the spectrum. And of course, we also, I like this chapter title, What Do You Do With a Big Pile of Money? We talk about how money reduces your circle of peers and how it changes your friends and your family relationships and even romantic relationships. So obviously, this is not a book on...

you know, specific investing advice, but we do dabble a little bit in that as well. I really liked one quote in that chapter where a founder said, I had all this money and traditionally I'd been investing in index funds and just kind of following the basic financial advice that you would do. And,

And now I had all this money. So shouldn't I invest like a rich person and started making risky bets and like investing in private equity and this stuff that's like not necessarily, you know, it's like you still like Vanguard index funds or Schwab index funds are still really, really good. Even if you have 10, 20, 30 million dollars that you need to invest.

Well, again, that speaks to this identity piece, right? I was a scrappy founder and now I'm someone with a big bank account. So doesn't that mean that I act or hold myself in this different way that my identity shifts now that I'm a rich person or now that I'm a post-exit founder? And that's not necessarily true. Like your identity is your identity. Like you can weave it through these changes and

But we have this idea that we put on these certain roles and then act accordingly to those roles. And so I think the theme of the book really is about being able to step back and to see your pull to some of those default settings and then the ability to choose whether that setting really fits or doesn't, whether there is a way that rich people invest or not. And then to cap us off,

I'm not going to tell the story. I'm just going to tease it. But one of the cringiest stories in the entire book is when you ran over my original Andy Warhol in your Porsche. That did happen. And I'm just, I'm going to leave that there. I am a person who does not identify as a rich person. And yet, there you go. That actually happened. So in order to hear that story, you're going to need to go to exitstrategybook.com, back the Kickstarter. And we look forward to getting this book in your hot little hands.

Dr. Walling, thanks so much for joining me on the show. Folks want to keep up with you. They can follow you on ex-Twitter at Sherry Walling. And ZenFounder.com is your home on the internet and you have a newsletter that you send out every week as well as a podcast called ZenFounder. Thanks again for joining me. My pleasure. See you in the kitchen.

Thanks to Dr. Walling for joining me on the show. And thank you for joining me this week and every week. ExitStrategyBook.com if you would like to pick up your hardcover copy. This is the only hardcover printing we will do. After these ship, we will then have print-on-demand paperbacks from Amazon. So if you want to get the fancy-schmancy version. These look really good, honestly. You know, again, I'm really...

Proud of what we put together. Head to exitstrategybook.com. Thanks so much for joining me this week and every week. This is Rob Walling signing off from episode 740.