They Got Acquired - How to exit an agency

July 11, 2023
​Read on web​

Yesterday we launched our Agency Deals Report.

It's a *free resource* for agency owners who are building with a sale in mind.

It will help you understand how agencies are valued, how most agency founders find buyers, and what deal terms tend to look like — so you can prepare for your own future sale.

If you haven't downloaded it yet, here's your chance:

How to exit an agency

Many agency owners who sell face an earn out.

They agree to continue working for the buyer post-acquisition, and if they hit certain targets, they take home the rest of their payout.

But earn outs are notoriously risky.

Even if you negotiate targets that are somewhat within your control, lots can go wrong. And if the plan goes off-track, so does your payout.

That’s one of the reasons Robert Glazer, who grew an affiliate marketing agency called Acceleration Partners, chose to take a different route, selling a majority stake to a private equity firm, Mountaingate Capital.

He preferred retaining some ownership rather than selling outright to an agency holding company, which would likely require an earn out over several years.

“The earn out, with not having control, is so much less attractive than putting your risk in the deal but separating your role from your equity,” he said on the Built to Sell podcast.

Glazer launched his agency in 2007 and grew it to $28 million in revenue with 170 employees.

He sold a majority stake in 2020 for about 8-9x earnings (that’s roughly revenue minus expenses).

Here’s our full story:

​Marketing agency founder grew to $28 million revenue before selling majority stake​

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Behind the business (of TGA)

Whenever someone asks how They Got Acquired is going, I answer honestly:

We are still figuring things out.

Yes, we've found a niche content gap that needs filling.

Yes, our reach is growing as more founders hear about us.

Yes, we've got systems in place to publish content regularly.

Yes, we recently launched our first online course.

Yes, founders we support are successfully selling their business.

And yes, we're bringing in enough revenue to cover expenses.

But...

It's been a year-and-a-half since we launched, and we're still in the phase of figuring things out.

We're still running lots of experiments.

Still looking for feedback to inform our growth.

Still nailing down which of our opportunities is most worth pursuing.

When you're building something new, you have to figure things out constantly. That never ends.

But being deep into figuring it out feels... different.

It's a distinct phase of growth, full of excitement and uncertainty. It's marked by baby steps forward, with occasional bigger spurts of momentum. And it's dripping with potential.

The only way to successfully make it to the other side is to lean into it, to own it.

So if anyone asks, I say it proudly:

We are still figuring things out.

See you next time,

Lexi Grant
Founder & CEO
​They Got Acquired​