Josh Pigford recently sold his startup, Baremetrics, for $4M.
In this article, Josh is fully transparent about how it all happened.
My Biggest Takeaways:
EXIT-FOUNDER FIT IS A THING, and it's just as important as Product-Founder Fit.
It's another one of these dumb startup terms that looks great on a conference slide but actually means NOTHING because it's partly art and partly science (but you won't know which part was which until afterward).
It's a mix of money, timing, intangibles, and luck.
Let's look at each of those...
Don't f*ck up the sale price.
You shouldn't exit for the wrong price. The wrong price is always easy to spot, but, holy shit: good luck figuring out what the right price is.
Right. Make sure to sell for the "right" price. Whatever that is. You'll know it when you know it. Or, you won't. Which maybe means it's bad timing? See the next bullet point...
So, on the surface, this seems easy. Sell at the right time.
You shouldn't exit at the wrong time. Everyone agrees that timing is crucial.
No one knows how to tell, in advance, if the timing is actually right.
Oh, okay. Well I'll just be sure to time it right. Got it. Right right riiiiight.
Hoping to get "timing right" is like baseball players agreeing they should try to avoid hitting into an inning-ending double play.
Baseball fans at home, screaming at their television sets: Ok, Jason Heyward, you got a man at second with only one out, so please don't send a bouncer up the middle to second.
Baseball Announcer: Annnnd... Heyward hits bouncer up the middle to second. Second baseman scoops it up, quick flip to short for one, shortstop throws to first for two. Inning-ending 4-6-3 double play. Time for the stretch. We'll be back right after this commercial...
Getting the intangibles right is the soul-searching portion of this exercise.
Sometimes soul crushing.
I really love how Josh digs into his thought process here on why he liked this acquiring team, why it's a good match for his employees (most of whom will be staying on with the new owners), and why having no earn-out was so important to him.
Josh doesn't touch on how luck was involved here, but I'd argue it was.
Josh sold his company for $4M during a once-in-a-generation global pandemic, with no earnout, convinced his early investors to walk away from their stake, and made sure all of his employees were not only happily staying on during the transition but each of whom will also get a nice chunk of beer money as a thank you — all to a person he met at a conference years back.
Don't tell me there wasn't any luck involved.
The next person who interviews Josh on a podcast about this, please, dive in here. Ask him about the concept of luck (what Jason Roberts of the TechZing Podcast has coined “Luck Surface Area”). I want to hear Josh's thoughts on intangibles and luck.
Anyway... Read the article. It's great.