You can know your business cold and still be guessing at what it is worth to somebody else. The first number a buyer puts in writing tends to become the benchmark, by default.
Heath Adams bootstrapped TCM into a cyber security company with two revenue lines: working with companies to hack into their systems in order to expose vulnerabilities, and selling courses and certifications that trained others to do the same work. He owned every share, raised no outside capital, and never relied on outbound sales. Every lead came through a YouTube channel that grew to more than a million subscribers.
Then a competitor raised $50 million and matched his price and his quality, and for the first time Heath could see where his growth ended.
For years he had been deleting the emails asking whether he would ever consider selling. Then a friend who had sold his own company a year earlier gave him a rule: never say no to a conversation. So Heath started answering.
One of those emails became a letter of intent for more money than he had ever seen. Half of it was an earnout. He said no.
He hired a sell-side firm instead, put the company in front of 300 buyers, and collected four letters of intent. The one he signed was worth more than double what he had turned down.
In this week’s episode, you discover how to:
- Mine the acquisition emails you’ve been ignoring for free valuations and buyer intel
- Tell the difference between the money in an offer and the promise attached to it
- Pass on the highest offer and pick the buyer instead
- Set a walk away number from the life you want to fund, not a multiple of earnings
- Push back on diligence deadlines so the company does not stall while the deal closes
Watch the full episode below.
Quote of the Week
Cash at close is king, because that’s guaranteed. The earnouts are never guaranteed.
Heath Adams.
Curious what an acquirer might think of your business? Let’s take a look.
Deals
FIS Water, a California-based company that makes filtration and water management equipment used in commercial and industrial cooling systems, including data centers, was acquired by SPX Technologies (NYSE: SPXC), an HVAC and cooling solutions company, for $410M. FIS Water is expected to generate approximately $105M in revenue in 2026, implying a valuation of 3.9x forward revenue.
