This week I spoke with a founder who is beginning the process of selling the company she’s been building for 10 years.
She runs a mission-driven services business and has a few exciting bites at a valuation that’s 5x(ish) revenue.
She described her current emotional state as “the moment before you start pushing when you give birth” - the moment when the pain is so unbearable that some part of you screams “f*** it, just make this end.”
Yuck!
A MISERABLE place to be - and a terrible foundation from which to negotiate the biggest deal of her life.
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Here are three things we spoke about that helped her regain her power and the sense of possibility and play that make her the badass founder she is.
(And even if an exit isn’t in your near future, read on. A lot of this applies to how you approach any big opportunity for your company.)
1/ Reconnecting with her why
At the end of our session, she reflected that the most powerful aha moment came in reconnecting to why she started her company in the first place.
Aligning her sale strategy with those values - business as a force for good in the community, business as a place where we get to be human, business as a way of creating dignified income for people of all backgrounds - gives her a much clearer north star as she navigates an impressive competing list of financial offers.
The “right” sale isn’t just about the best financial deal, indeed there is no black-and-white “right” deal so much as the next arc in the story of who she is, who the company will be, and the impact she wants to make in the world.
2/ Take the emotional pressure off the numbers
Our culture puts SO much emphasis on “the exit” that it can easily feel like a referendum on all the blood, sweat, and tears that preceded it.
If you get a “good” valuation then it was all “worth it”, and if you don’t it wasn’t.
Of course, this kind of pressure is going to make you pull your hair out.
And it’s also a pile of patriarchal capitalist bullshit.
The journey is WAY more important than the destination.
Think about all the people you have touched with your business.
The employees who learned a ton and got to be part of this ride.
The customers who enjoyed your product/service.
The lessons you’ve learned and how much you have grown.
The untold inspiration and ripples of goodness you and your team have put out into the world every step of the way.
THAT is your lasting impact.
Does the money matter?
Of course.
Especially to you and your co-founders.
But the money matters to fewer people than you probably think…
98% of the people who your business will impact in its lifetime will feel zero impact from your exit - your customers, your suppliers, your audience/followers/fans, even many of your extended team.
If you’re in the penultimate chapter of your business most of this impact is already manifest in the world and no deal can take it away from you or the people you have touched.
1% of folks will be materially impacted by the sale in a way that - if we’re honest - is nice but not material to them. This INCLUDES most of your investors and probably most of your team. The amount of money each of these people stand to make vs their current net worth means that a good valuation will be nice for these people, but it will likely not move the needle on what’s possible for them in this lifetime. Yes, you want to do good by the people who have believed in you and invested in you along the way. No, you should not kill yourself or compromise important values for this.
Also note that good investors will truly want what’s best for you. They want in on your next company more than they want you tied up making money for someone else for a long time!
Finally, 1% of people will/may be materially impacted by you getting a good deal on the sale. This includes you, any co-founders, and perhaps, your most senior team and some of your investors.
If you are leading the sale, I won’t lie, this part is on you. And it’s still a lot, but it’s also a lot less than you were probably carrying at the beginning of this thought experiment.
(Obviously, these percentages will be different for you, especially if you’re on target for a genuinely massive exit, but even then I suspect they're closer to this than you realize.)
Now, let's lower this pressure even further.
At this point in your entrepreneurial journey you, your co-founders, and your senior team are HIGHLY EMPLOYABLE at very good salaries. Plus you could probably start a new company and reach a similar valuation 5-10x faster next time round because now you know your stuff.
So is this a golden opportunity to realize financial value? Yes.
Is it your only chance to do so? Absolutely not.
For you and your team freeing up your time to work on something else might frankly be more lucrative in the medium term than trying to squeeze a little more out of your current business.
3/ What are you making this mean about yourself?
Chances are you are making the outcome of these negotiations mean a lot about who you are and what you are capable of.
This is unhelpful.
Does some part of you feel that a good deal makes you a good businesswoman? Even a better human?
We each have a particular personal nuance of a binary like this that we torture ourselves with.
And it always falls apart the second we look out into the world.
How many great business people have sold one or more of their companies for less than they raised? A ton of them.
Honestly, I suspect it’s actually positively correlated with financial success in building businesses over time.
Per the above, knowing when to get out is just as valuable as knowing when to stick it out.
And how many of us would judge a friend by these standards? Would one deal change your opinion of someone’s capabilities so greatly?
I have some practices we can chat about to help loosen grip the fear here. (DM me)
But at its core, the work is to remember that these binaries we create are a distraction. There genuinely are no good/bad business people, there are just people, doing their best and learning on any given day.
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Overall, the underlying theme of today’s post is a version of what so much of my work is about: As entrepreneurs, we all get sucked into a capitalist patriarchal version of what it is to build and sell a “successful” company - and when we do this we lose sight of what really matters.
Instead, when we harness the masculine in service of the feminine, we harness our hustle, our competition, our goals, and our focus on the numbers in service of our vision, our values, our community and our potential bigger impact.
The feminine points to the value of the journey over the destination.
It makes space for all the nuances of our humanity alongside the tangible numbers in your bank account.
And it points to a greater possibility of a win-win-win in a negotiation because we put more than just cash on the negotiating table.
Here’s a powerful practice at this stage in your business:
Don’t wait to write a letter to your team and investors until after the sale.
Write a first draft now.
Sure, you’ll leave some blanks to fill in when the deal is done.
But now is a great time to take stock and articulate:
What impact has your company had in the world?
What and who are you most proud of along the journey?
What have you learned that you’ll take into whatever you do next?
What do you hope is the legacy of this business going to be?
Take the energy of this letter into the negotiating room with you.
This is the queenly energy of a founder who’s ready to do a deal that aligns with her worth and her values - and to walk away from one that isn’t.
This is a woman who’s clear on the hard-won experience that comes with her into every room she enters.
And this is someone ready to find a win-win-win, a creative solution that gives her the launch pad for a stellar next chapter that plays to her vision and her strengths, and gives her company the landing pad it deserves, and gives her team and investors an outcome that honors their trust and investment to the fullest extent (without compromising) other equally important outcomes.
This is such a powerful and vital read. Thank you!