The Shotgun Clause | Built to Sell
October 3, 2023
Think of a shotgun clause as a high-stakes game of “buy or sell.” Partners use it to quickly resolve disputes and set prices. Here’s how it works:
Think of a shotgun clause as a high-stakes game of “buy or sell.” Partners use it to quickly resolve disputes and set prices. Here’s how it works:
Private equity investor David Kennedy was clear when he invested in Jon Coss’s business: the goal wasn’t to sell but to be sought after by acquirers. Kennedy felt that sellers who approach potential buyers are at a disadvantage. Instead, he urged his CEOs to build irresistible businesses that attract acquirers.
When most founders think of an exit, they think of the giant company swooping in and writing an enormous check to buy all of their shares. However, the more likely exit for a lot of owners is something that looks more like half an exit. It’s called a “majority re-capitalization” or “majority re-cap” and there are pros and cons.
Most business people find themselves on a corporate conveyor belt with a singular direction: upward. A traditional career is akin to climbing a precariously steep mountain. Every step matters, and one misstep—like taking a sabbatical—could send you tumbling down the career ladder while you watch others scamper past you.
Bob Barker, the long-running host of the game show “The Price is Right,” died last month. Barker was renowned for games where contestants had to choose between a good prize, like a new washing machine, or the chance at a fabulous prize, such as a new car. The catch was, that if you gambled for the new car and lost, you ended up with nothing.
Ever heard of the Kolbe A Index? It’s a psychometric assessment that measures the ways you instinctively take action. It’s a great barometer to use when assessing a COO or General Manager who will run the daily operations of your business.
When you’re building to sell, being a solo founder comes with incredible rewards. You get to hold on to all the equity—why give it away to co-founders or sell it for peanuts to early-stage investors? With 100% ownership, the whole pie is yours.
Developing a knack for spotting high-potential employees can significantly enhance the value of your company. This week, we’re revealing three techniques you can use to help find them.
It’s tempting to think that selling a business is a dramatic boardroom struggle with dozens of anonymous companies trying to outbid each other for access to your business.
Ian Fraser, a former professional golfer, has assisted some of the world’s top golfers in finding the appropriate clubs as a master club fitter for TaylorMade Europe.
In 2017 Chris Mole founded UK-based Molzi, a full-service digital marketing agency catering to Amazon sellers. As a pioneer in the field, the company witnessed significant growth. By 2020, amidst the pandemic fuelled e-commerce boom, Molzi doubled in size to over 70 employees generating £4.5 million in sales.
Paul Johnson co-founded Lemonaid Health in 2013 with the intent of offering doctor visits over the phone. As he shared with John in this week’s Built to Sell Radio episode, initially, the business had a slow start. However, when the pandemic struck, virtual doctor consultations became a necessity, leading to the company’s rapid growth.
Think of a shotgun clause as a high-stakes game of “buy or sell.” Partners use it to quickly resolve disputes and set prices. Here’s how it works:
Private equity investor David Kennedy was clear when he invested in Jon Coss’s business: the goal wasn’t to sell but to be sought after by acquirers. Kennedy felt that sellers who approach potential buyers are at a disadvantage. Instead, he urged his CEOs to build irresistible businesses that attract acquirers.
When most founders think of an exit, they think of the giant company swooping in and writing an enormous check to buy all of their shares. However, the more likely exit for a lot of owners is something that looks more like half an exit. It’s called a “majority re-capitalization” or “majority re-cap” and there are pros and cons.
Most business people find themselves on a corporate conveyor belt with a singular direction: upward. A traditional career is akin to climbing a precariously steep mountain. Every step matters, and one misstep—like taking a sabbatical—could send you tumbling down the career ladder while you watch others scamper past you.
Bob Barker, the long-running host of the game show “The Price is Right,” died last month. Barker was renowned for games where contestants had to choose between a good prize, like a new washing machine, or the chance at a fabulous prize, such as a new car. The catch was, that if you gambled for the new car and lost, you ended up with nothing.
Ever heard of the Kolbe A Index? It’s a psychometric assessment that measures the ways you instinctively take action. It’s a great barometer to use when assessing a COO or General Manager who will run the daily operations of your business.
When you’re building to sell, being a solo founder comes with incredible rewards. You get to hold on to all the equity—why give it away to co-founders or sell it for peanuts to early-stage investors? With 100% ownership, the whole pie is yours.
Developing a knack for spotting high-potential employees can significantly enhance the value of your company. This week, we’re revealing three techniques you can use to help find them.
It’s tempting to think that selling a business is a dramatic boardroom struggle with dozens of anonymous companies trying to outbid each other for access to your business.
Ian Fraser, a former professional golfer, has assisted some of the world’s top golfers in finding the appropriate clubs as a master club fitter for TaylorMade Europe.
In 2017 Chris Mole founded UK-based Molzi, a full-service digital marketing agency catering to Amazon sellers. As a pioneer in the field, the company witnessed significant growth. By 2020, amidst the pandemic fuelled e-commerce boom, Molzi doubled in size to over 70 employees generating £4.5 million in sales.
Paul Johnson co-founded Lemonaid Health in 2013 with the intent of offering doctor visits over the phone. As he shared with John in this week’s Built to Sell Radio episode, initially, the business had a slow start. However, when the pandemic struck, virtual doctor consultations became a necessity, leading to the company’s rapid growth.
