The Surprising Secret to A Big Exit
We see many company founders contemplating an exit. Some of our customers get lucky early in life, but it is not their first rodeo in most cases where a founder gets a seven—or eight-figure offer. Most owners have had multiple failures and modest successes before their first big exit.
One of the most compelling reasons to consider selling your business is to give yourself a clean canvas for designing your next business. You can apply all the lessons you’ve learned building your current company to a new idea.
What would you do with a clean slate?
Michelle Romanow partnered with two friends from her engineering class. In their early 20s, they founded Evandale Caviar. The trio’s idea was to sell caviar to high-end restaurants worldwide.
The partners built a fishery and had just started to get the business off the ground by the summer of 2008 when the luxury restaurant industry started to wobble. By the fall of that year, high-end restaurants worldwide were suffering, and by the end of 2008, the industry was on its knees.
Evandale Caviar failed.
The partners licked their wounds and came together to start a new business, a deal-of-the-day website called Buytopia. They had learned from their Evandale experience and were building a good little business—call it a single, to use a baseball analogy—when the partners started to tinker with a third idea.
From nothing to $25 million in 12 months
Romanow saw big companies wasting millions of dollars printing paper coupons and reasoned that a more efficient way to distribute them must be. They dreamt up a mobile app that would notify shoppers in a grocery store of special offers, let them snap a picture of their grocery receipt, and give them money back on the products being promoted. The SnapSaves business model was to charge the company advertising its offers through the app.
Romanow and her partners poured more than $100,000 a month of Buytopia cash into SnapSaves, and within six months, they had a product they could take to market. They launched SnapSaves in August 2013, and the company was a quick hit with consumers and advertisers. Within a year, the founders were entertaining venture capital investment offers with an implied valuation of around $25 million for their young company.
That’s when Groupon called and said they wanted to buy SnapSaves outright. The partners haggled with Groupon and got them to double their offer. Less than a year after launching SnapSaves, they agreed to be acquired by Groupon.
The third time’s a charm.
A casual observer of the SnapSaves story would likely chalk it up to luck: a couple of friends leave school, start a business, and become an overnight success. That’s a convenient story, but it’s not true.
SnapSaves would only have happened with the lessons the partners learned from Evandale. And therein lies the secret to many successful entrepreneurs: they got their first few businesses out of the way early in their working lives to make the time, room, and capital for true success.
Mark Hartmann is a three-time Inc 500|5000 CEO with a rich sales, operations, and leadership background in the insurance, financial services, and healthcare sectors. With extensive experience growing and selling his own businesses, Mark leverages his expertise to help owners grow and sell businesses valued at $1M —$25M. He’s earned a master’s degree in organizational change management from St. Elizabeth University and a graduate certificate in executive coaching from Columbia University. Mark’s professional certifications include Certified Mergers and Acquisitions Professional (CM&AP), Certified Business Intermediary (CBI), Certified Exit Planning Advisor (CEPA), and Certified Value Builder (CVB).