Built to Sell Radio

The traits that make someone a great entrepreneur are the same ones that get them into trouble once they sell. Optimism, conviction, the belief that any problem can be solved with enough effort. Those instincts build a company. Pointed at an investment, they lose money.

Justin Donald has seen it happen to exited founders again and again. Justin built a mobile home park portfolio that covered his cost of living by 34, wrote the Wall Street Journal bestseller The Lifestyle Investor, and now studies how single family offices allocate serious money. He joins John Warrillow for the latest After the Deal episode of Built to Sell Radio, the series about making the most of life after a sale while avoiding the biggest mistakes founders make once the money lands.

Have you ever considered how you would tell your employees you've sold your business? It's one of the conversations most founders fear. You hope your employees will be happy for you, but you also worry some will view you as a sellout.

Dr. Michael Filosi experienced the entire spectrum of reactions when he told his 35 employees he had sold his dental practice, the biggest in Adelaide, to private equity. While he had some congratulations, he also had one team member walk out saying "that's a bit disappointing," and another who wouldn't meet his eye for three days.

Lior Pozin started AutoDS to run his own eBay dropshipping stores. The software finds trending products to sell, tracks supplier price and stock changes, and fulfills orders automatically so a dropshipper never touches the inventory. He bootstrapped the company for eight years, keeping the bank balance at zero on purpose, and grew it to 200 employees and more than $20 million in annual recurring revenue. Along the way he turned down a $38 million private equity offer one day before signing, and still ended up selling to publicly traded Fiverr for roughly $55 million in cash plus a $36 million earnout.

In this episode of Built to Sell Radio, Lior walks through what made him kill the private equity deal, why he chose Fiverr over higher bids, and how the earnout changed the way he ran the business.

Jim Fitzgerald bootstrapped Taradel from a spare bedroom into a $30 million direct mail company. In 2016 he took the business to market, and the five buyers who made it to an indication of interest all offered roughly 4x EBITDA, about half of what Jim had in mind. He had spent years reinvesting every dollar in growth, and the market told him growth alone wasn't enough.

So Jim rebuilt his company around profit. He started pulling cash out of the business so it couldn't be poured back in, and built a leadership team that could operate without him. When he went back to market, 120 teasers produced nine indications of interest, seven management presentations in two days, and a low eight-figure sale, all cash.

Clean Energy Associates acted as the eyes and ears on the ground in China for solar and battery storage buyers, inspecting factories to make sure the products they ordered were built correctly before they shipped.

In 2016, a banker sat down with founder Andy Klump in Shanghai and asked him three questions. How would he triple his business in a short period of time? Who was on his executive team? Did any single customer account for more than 20% of revenue? Andy had no investment plan and no leadership team beyond one salesperson, and one client made up 40 to 50% of his sales. The banker's verdict was that the company wasn't sellable and there was nothing he could do to help.

Six years later, Intertek Group acquired Clean Energy Associates for $112 million, and the banker who had delivered that verdict ran the sale. In between, Andy survived six straight months of losses, heard from an executive coach that his team saw him as a micromanager, and went through five hires to find the right head of sales.

Zac Smith was a mechanical engineer who wanted more flexibility and upside than a corporate career could offer. He bought an existing CertaPro Painters franchise in North Carolina with three employees and under $1 million in revenue. He put down about 10% in cash and financed the rest with an SBA loan and a small seller note, backed by a personal guarantee.

Three years later, the company was on track for $3 million in revenue and $600,000 in profit. Smith sold it for $1.5 million, all cash at closing.

Adam Spector co-founded LiftIgniter in 2014, which used machine learning to personalize websites the way YouTube does. Growth stalled, and with no way to prove the company was causing the results customers saw, it could never charge what the work was worth. The board brought in a new CEO to sell, and when Adam argued to keep building he was outvoted two to one. It sold in 2018, mostly for its engineers, and he left soon after.

Like a lot of owners, he wanted to stay in the game. Keeping a hand in, backing people doing interesting work, staying near the part of the job he really enjoyed. For Adam that meant putting money into other people's startups. More than a decade in, that portfolio shows seven to eight times on paper. In cash, it is roughly break even.

Heath Adams bootstrapped TCM into a company with two revenue lines: hacking into companies' systems to expose vulnerabilities, and selling courses and certifications that trained others to do the same work. He owned every share, raised no outside capital, and never relied on outbound sales. Every lead came through a YouTube channel that grew to more than a million subscribers.

A competitor then raised $50 million and began matching TCM on price and quality. On the advice of a friend who had sold his own company, Heath started answering the acquisition emails he had been deleting for years. One became a letter of intent for more money than he had ever seen. Half of it was an earnout, so he turned it down, hired a sell side firm, and put the company in front of 300 buyers. Four wrote letters of intent. The one he signed was worth more than double what he had turned down. In this week's episode of Built to Sell Radio, you discover how to

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Turn the acquisition emails you've been ignoring into free valuations and a rehearsal for diligence

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Tell the difference between the money in an offer and the promise attached to it

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Pass on the highest offer and pick the buyer instead

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Build a walk away number backwards from the life you want to fund rather than a multiple of earnings

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Hold diligence at arm's length so it does not paralyze the company you are selling

Broadly speaking, there are two ways to build a company. Some entrepreneurs swing for the fences, spending decades building one big business. Others play for singles, building a series of smaller companies they can sell and repeat.

Stuart Faught has made a career of the second approach.

He has started and sold 20 software businesses, making him the number-one seller on Acquire.com. His model is deliberately small: build a simple tool for a niche of local businesses, grow it to $50K to $100K in annual recurring revenue, sell it for four to five times that, and move on to the next one.

Garren Hilow bootstrapped Abveris, an antibody discovery business doing $12 million in revenue, and sold it in 2021 for $150 million up front with another $40 million available in an earnout. His team came within one percent of the revenue target. The acquirer said they had missed it, refused to share the accounting behind that conclusion, and dared him to sue.

Rob Walling sold Drip with 40 percent of his purchase price tied to an earnout and collected all but a fraction of it.

In this episode of Built to Sell Radio, John Warrillow puts the two founders side by side to work out what actually separated the two outcomes, and you discover how to negotiate an earnout you have a chance of collecting.

You'll learn:

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Why a revenue-based earnout hands the acquirer the calculator, including the right to change how your revenue is recognized partway through the year

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Walling's ranking of earnout milestones from worst to best, and the one type he tells founders to refuse outright

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Why taking more cash at close makes an acquirer less likely to fight you over the back end

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What a private equity buyer admitted over dinner about how often his firm plans to replace the founder

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The reporting clause Hilow left out of his agreement, and what its absence cost him

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How old Slack messages and a verbal instruction to work from home became grounds for a termination with cause

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Why an acquirer who intends to fold your company into theirs should not be offering an earnout at all

Dane Pan and his wife built Monet Brands to $1.3 million in revenue with two employees, selling a $24.99 skincare tool that cost them $6.10.

When they took the company to market in 2025, nine buyers cleared the proof-of-funds screen and four of them wrote an LOI. The best offer came in close to four times SDE with a holdback attached. Dane countered for all cash at close, watched two of his four offers disappear, and signed at 3.6

One of the fastest growing groups of acquirers is the self funded searcher. A searcher is not a competitor nor a private equity group. A searcher is usually one person, often recently out of an MBA program, who puts ten to twenty percent down from personal savings, borrows the rest from a bank, often asks the owner to finance part of the purchase price, and signs a personal guarantee for the debt.

Owners find searchers appealing for good reasons. They may pay your asking price, and they promise to look after your employees rather than fold them into someone else's operation.

In 2016, Janessa White and her business partner started Simply Eloped, a marketplace that planned elopements and small weddings for couples in 35 cities across the United States. They also decided, before they had a single customer, which company they wanted to sell it to. The Knot Worldwide, the largest wedding platform in the world.

Over the next seven years, White told The Knot exactly that, met with their corporate development team every quarter for four years, and shared her revenue and margins with them along the way. When she finally emailed to say she was ready, the letter of intent arrived within a week.

There are four types of financial buyers who might make an offer on your business, and more often than any other type, the one approaching you is an independent sponsor. It is an unhelpful label for a group that raises the money for a deal only after the seller has signed an LOI, which is also when the seller's leverage is at its lowest.

Travis Jamison runs Capital Pad, where investors fund independent sponsor deals. He sees dozens of them for every one he approves. Independent sponsors are now behind roughly 28% of lower middle market acquisitions, which is more than traditional private equity does.

One day, you're going to sell your business, and when you do, you'll experience a step function increase in your net worth. Navigating that moment is something Adam Katz has spent his career helping owners do. He spent twenty years at Merrill Lynch as a Private Wealth Advisor to ultra high net worth families before he and his team left in 2018 to build KORE Private Wealth, an independent firm that grew to five billion dollars in assets. Just four years later, they sold. His new book, Making the Zeros Count: A Field Guide for Decamillionaires, Centimillionaires, and Billionaires, distills what he's learned into a playbook for owners who come into sudden wealth.

Katz says the greatest benefit of wealth isn't what it buys. It's the freedom of never needing anyone again. Not your clients, not a boss, not a buyer. He argues that kind of independence is impossible to understand until you're on the other side of the deal, which is why, even after decades of coaching founders through liquidity events, he admits he is still adjusting to it himself.

If you own a company, chances are you're its best salesperson. Put you in a room with a prospect and you rarely lose. But listen to your employees try to tell the same story and something gets lost. You've tried hiring salespeople. You've tried training them. The selling keeps landing back on your shoulders, and when it comes time to sell, an acquirer will see it too. Expect an earn-out or an equity rollover, golden handcuffs designed to keep the rainmaker locked in.

Here's what most owners miss: you have a built-in advantage no salesperson can replicate. Your founder story defines the enemy, the problem, and why you built something better, and you tell it instinctively because you lived it. A new rep who tries to recite your story will sound like a fraud. The fix isn't better sales training. It's giving your team professional positioning, and nobody on the planet knows more about positioning than April Dunford. She spent 25 years as an executive at seven B2B technology startups, companies that were acquired for a combined total of more than two billion dollars, and her books, Obviously Awesome and Sales Pitch, are the standard playbooks for explaining why customers should pick you over the competition.

Jeff Church co-founded Suja Juice in 2012 with $300,000 and a green juice that had a four-day shelf life. Within three years, the company hit $70 million in revenue, and Coca-Cola and Goldman Sachs invested $150 million at a $300 million valuation. Then, two weeks after Coke flew its entire North American management team to Suja's plant, they passed on the option to buy the rest of the business, leaving Jeff with $40 million in maturing debt and a company losing $9 million a year.

More owners than ever say they are simply tired. A look at 10,255 PREScore™ assessments over six years found that 17.5% pointed to burnout, not retirement, as the number one reason they want out.

So the question went to two people who spend their days on the buy side, valuing companies and deciding what to pay. Lee McCabe is a private equity veteran who advises PE firms on the businesses they acquire. Jason Swenk built marketing agencies and spent time acquiring them. In this episode, you discover how to tell whether burnout is a signal to sell or a problem worth fixing first, and how a buyer prices the difference either way.

What do you need to know before selling your business to an ETA buyer?

Most owners have received the email. It usually starts with something flattering: "I love what you've built…" Then comes the ask: a quick call to learn more about your business.

Increasingly, those emails are coming from ETA buyers — entrepreneurs using entrepreneurship through acquisition as their path into business ownership. Instead of starting a company from scratch, they look to buy an existing business and run it themselves.

In this episode of Built to Sell Radio, John Warrillow talks with Will Smith, host of Acquiring Minds, one of the leading podcasts covering entrepreneurship through acquisition. Will has interviewed hundreds of ETA buyers and brings rare insight into how they think, how they finance deals, and where deals fall apart.

What You'll Learn in This Episode

Whether you're actively considering selling your business or just exploring your options, this conversation covers what every owner should understand before entertaining an offer from an ETA buyer:

• How to tell the difference between a funded searcher and a self-funded buyer — and why it matters for your deal structure
• Why some ETA buyers use heavy debt to acquire a business — and what that means for you as a seller
• How to spot the hidden risk in a seller note — a key piece of most ETA transactions
• How to evaluate whether a young buyer has the leadership experience to run your company after you exit
• How to protect your employees from a buyer who may not fit your culture
• Better questions to ask before signing a letter of intent (LOI) with an ETA buyer
• How to judge whether a buyer can actually close — not just sign

Are ETA Buyers Right for Your Business?

ETA buyers can be a great fit for owners of profitable niche businesses that may not attract private equity or a strategic acquirer. They're often motivated, passionate, and willing to pay fair value for the right business.

But they come with real risks. A buyer may need your financing — in the form of a seller note — to get the deal done. They may still need to raise money after you sign an LOI. And they may look great on paper but struggle to lead the team you've built over years.

That's why this conversation is worth your time. Before you take the next call from someone who says they "love what you've built," listen to this episode.

About Will Smith

Will Smith is the host of Acquiring Minds, a podcast dedicated to entrepreneurship through acquisition. He has interviewed hundreds of search fund entrepreneurs and self-funded searchers, making him one of the most knowledgeable voices on the ETA buyer landscape.

About Built to Sell Radio

Built to Sell Radio is hosted by John Warrillow, author of Built to Sell: Creating a Business That Can Thrive Without You. Each week, John interviews business owners who have navigated the process of selling their company — sharing what worked, what didn't, and what every owner should know before they sell.

Keywords: ETA buyer, entrepreneurship through acquisition, selling your business, search fund, seller note, business acquisition, how to sell a business, Built to Sell Radio, Will Smith Acquiring Minds, exit strategy, business exit planning

Knowing what kind of seller you are turns out to be one of the most important things you can figure out before you ever take a meeting with a potential acquirer. There are three: the transactional seller who wants the money and the door, the transitional seller who wants to land the plane, and the transformational seller who sells to go bigger.

Cameron Passmore built one of the largest independent wealth management firms in Canada, roughly 3,000 families and about $8 billion under management, and owned half of it. Most founders in that seat cash out and leave. Cameron sold to OneDigital at 60, and has no intention of going anywhere. He rolled 40% of the deal into equity, and now uses OneDigital's capital, deal expertise, and acquisition currency to buy other firms. He has acquired five and roughly doubled the business in under two years.