She sold for $25M. Here’s how she knew the timing was right

August 6, 2024
​Read on web​

Sharon Gillenwater sold her business for $25M.

How did she know the timing was right to sell?

She shared her thought process with us in this column.

So let's kick it over to Sharon...

Back in April 2021, I was sitting in my office with my business partner when I got a call from a private equity firm with which we’d had a few conversations the previous year. They were checking in to see if we wanted to explore selling a majority stake in our business to them.

I was running a data company called Boardroom Insiders and we’d seen record growth in 2020. We had a mammoth pipeline that gave us confidence that we would reach $5 million ARR in 2021. We’d just hired a VP of Operations and formed a leadership team. The business was growing well, so selling was not top-of-mind.

“I am sorry to hear that,” the PE guy said. “Because we could get you a term sheet for $48 million today.”

That single, five-minute conversation changed everything. While I knew that the PE guy’s verbal offer was mostly BS, it caused me to ponder whether the timing was right to sell. Multiples for SaaS companies were at an all-time high and my partner and I knew that it was just a matter of time before there was a major correction.

I called my advisor/angel investor and told him about the PE firm and my concerns about timing. His response: “Then hire a banker and run a process. Don’t negotiate with a single buyer.” So I did.

Read Sharon's full column, plus tips for getting the timing right with your sale:

​I sold my business for $25M. Here’s how I knew it was time to sell​

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Advice for founders who want to sell 🤔

We've interviewed 100s of founders who've sold a business. And we always ask:
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​What advice would you give to other founders who want to sell one day?​
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We fed all of the advice we've collected into ChatGPT and asked it to summarize it for us.
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My big takeaway: We interview a lot of smart founders!
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Here's what they said...
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💰 1. Understand industry multiples: Gain a deep understanding of the financial multiples that businesses like yours are sold for in your specific industry to estimate your company's potential selling price.
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💰 2. Systemize and delegate: Develop robust systems and cultivate a competent team that can operate independently of your daily involvement. This increases the company's value by showing that the business can sustain its operations without the founder.
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💰 3. Be prepared for unsolicited offers: Be ready to act if approached by potential buyers unexpectedly. Have a strategy in place for such scenarios, including understanding the legal and financial implications.
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💰 4. Set clear goals: Clearly define what you hope to achieve through the sale, both personally and financially. This will help steer your decisions and negotiations effectively.
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💰 5. Maintain impeccable records: Keep detailed and accurate records of all business operations and finances as if you are preparing to sell immediately. This demonstrates transparency and operational excellence to potential buyers.
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💰 6. Optimize business fundamentals: Focus on strengthening the core aspects of your business such as profitability, customer satisfaction, and operational efficiency. This makes your business more appealing and can enhance the sale price.
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💰 7. Plan for long-term value: Build your company with a focus on long-term value and profitability, rather than short-term gains, to attract serious buyers willing to pay a premium.
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💰 8. Start planning early: Begin the preparation process well in advance of the actual sale to ensure that every aspect of the business is optimized and ready for due diligence.
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💰 9. Maintain your own pace: Stay true to your business's pace and values during the negotiation and sale process. Avoid being rushed or pressured into decisions that do not align with your goals.
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💰 10. Consider market dynamics: Pay attention to market trends and dynamics, as they can significantly influence the timing and success of your business sale.
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If you've sold your business, which of these resonates most? What else would you add?

See you next time,

Lexi Grant
Founder & CEO
​They Got Acquired​

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P.S. If you want to read about the details of Sharon's $25 million deal, we covered Boardroom Insider's sale to Euromoney (now Delinian).

Plus, Sharon has a new book out, Scaling With Soul. ​I found it both inspiring and full of practical ideas to apply to my own business.