When NIKE Wants To Buy Your Company

Data analytics provider Zodiac was preparing to raise an A investment round for its customer lifetime value software when NIKE decided they wanted to buy the company.

Peter Fader co-founded Zodiac in 2015. The company integrated the Wharton professor’s decades of research into customer lifetime value into a software system that could estimate the lifetime value of a customer.

By 2018, the company had built itself up to 13 full-time employees, and an additional roster of part-time specialists. Zodiac had Fortune 500 companies and was optimistic about closing an A round of financing when NIKE, one of Zodiac’s customers, offered to buy the entire business. Fader and his team had prepared to keep running Zodiac post investment, but how could they say no to NIKE?

In this episode, you’ll learn:

• How to structure the non-compete you’ll sign when you sell your business
• The most gratifying part of selling your company
• Why Fader and his team chose not to look for other buyers after NIKE’s offer
• How to sell your business while carving out the part you want to keep for yourself
• The surprising thing Fader wishes he’d hung onto after selling Zodiac

Although many consulting firms offer customer lifetime value analysis on a one-off basis, Zodiac built a Software-as-a-Service (SaaS) platform giving them recurring revenue. Figure out your recurring revenue model in Module 5 of The Value Builder System™ — get started for free right now by completing Module 1.

Check out our article on The Secret To Avoiding An Emotional Breakdown After Selling.

Check out our full M&A Glossary

About Our Guest

Peter S. Fader is the Frances and Pei-Yuan Chia Professor of Marketing at the Wharton School of the University of Pennsylvania. His expertise centers around the analysis of behavioral data to understand and forecast customer shopping/purchasing activities. He works with firms from a wide range of industries, such as telecommunications, financial services, gaming/entertainment, retailing, and pharmaceuticals. Managerial applications focus on topics such as customer relationship management, lifetime value of the customer, and sales forecasting for new products. Much of his research highlights the consistent (but often surprising) behavioral patterns that exist across these industries and other seemingly different domains.