BTS Header Logo

The Bait & Switch

June 4, 2021 |  

About this episode


Carrie and Dave Kerpen started Likeable Media, a social media agency, in 2006.

The business grew to more than 50 employees when the couple met for their annual partner’s retreat. The Kerpens realized their business had blossomed into a big success which they estimated was close to 90% of their net worth.

The Kerpens decided to sell and quickly received a 100% cash offer of 6.5 times EBITDA, which seemed too good to be true given that marketing services businesses almost always involve an earn-out.

Turns out it was.

After the Kerpens signed a Letter of Intent (LOI), the acquirer changed the terms of the deal offering just 60% upfront. The Kerpens realized they had fallen victim to a bait and switch and decided to walk away.

Lucky they did, as soon after, the Kerpens accepted an offer of around 8.5 times EBITDA.

In this episode, you’ll discover:

  • How to productize a service.
  • The power of naming and trademarking your offerings.
  • How to leverage interns to get your business off the ground for pennies on the dollar.
  • How to stop billing by the hour.
  • The difference between a small business owner vs. an entrepreneur.
  • How to ensure you control the outcome of your earn-out.


Check out our article on Stop Selling Your Time.

And 5 Lessons On Building To Sell From Billionaire Alan Sugar too.


Check out our full M&A Glossary

Show Notes & Links

(05:58) Dave Kerpen: “I was fortunately one of the first people to write a book about social media. And of course I didn’t really know much then, but I wrote what I knew, what I could figure out. And then, because the world of social media changes so often, I was asked to update the book. Again and again, I had to keep doing new editions.”

(10:15) Carrie Kerpen: “It was called the Content Credit System. This is one of Dave’s greatest hits.”

(11:15) Dave Kerpen: “packaging in those in a subscription model allowed us to sell annual recurring subscriptions. So whereas most agencies are going project to project, which doesn’t create value and it doesn’t create predictable revenue, we were able to create a recurring revenue stream based on client subscriptions to the content credit system.” Article: Eight Key Drivers of Company Value: Recurring Revenue

(20:20) Carrie Kerpen: “Content Cubed is different. We name everything. So Content Cubed is our process for subscription. So we always named and marketed everything. So The Content Credit System is how we charge, Content Cubed was how we executed, which was consult, create, connect, the three areas of what we did. Every piece of that is productized and then all of them together form what the subscription is.”

(21:33) Carrie Kerpen: “A training program called Smarter Social. Smarter Social helped combat social media going internal, everyone hires internally, but things change and you’re in your own ecosystem and your bubble and so you lose perspective from an outside agency. So we would come in and do internal trainings and refreshes and all kinds of stuff.”

(21:55) Dave Kerpen: “We did a conference called LikeableU allowing clients and prospects to come in and learn from the smartest and social. The name itself, I mean, Likeable itself obviously was a very, very valuable piece of the puzzle. We were able to own a word and a pretty popular word and the word is associated positively, right? So being able to own the word Likeable in our name itself, and then have a Likable Blog and a Likable Media and a Likable Podcast, and Likable books, et cetera was very valuable.”

(23:54) Dave Kerpen: “I think the thing is mindset. I mean, I’m President of EO, New York and I mentor quite a few small business owners. And the reality is that there’s a huge difference between an entrepreneur and a small business owner.”

(24:41) Dave Kerpen: “In the very beginning when we had no staff or revenue, the way we did that was hiring buzz builders who were interns and we built up our buzz builder force. I mean, we had 60 buzz builders working for college credit at the beginning and stipend.”

(26:05) Dave Kerpen: “of course, with Built to Sell, you build the sales team that can help to execute the work and then you build teams that can execute the work at X profit per product and then you can scale. And I think that we learned a lot from you in that regard, John. And Built to Sell and other great books that we read early on were Verne Harnish’s Mastering the Rockefeller Habits, now Scaling Up.”

(28:45) Dave Kerpen: “when we don’t delegate, we don’t give any chance at working on the business and getting out of our own way. And so I’d always rather take the chance on people even though I know they won’t do the work as well as I will, because if they do the work 80% as well as I would have, I can move on and build the business and that’s enough.”  Article: Eight Key Drivers of Company Value: Hub & Spoke

(43:34) Dave Kerpen: “it hit me just how right he was and just how much of our net worth was in fact tied up in our business. And I do think that’s a big part of that decision to take some off the table.”

(45:50) John Warrillow: “It’s a great illustration. We call is this thing called the Freedom Point, but when you’ve reach this point where selling your business would allow you to create this amount, nest egg that will fund whatever you want. Fantastic.”

(48:35) Carrie Kerpen: “one thing that was very interesting was because I was staying on, I was the person in the interviews and Dave was not, which was also very hard for the dynamic, because I would have to communicate to him. But the broker suggested that when you’re the person who’s staying on, you should be the person doing the interview because they’re really evaluating you and what if they fall in love with Dave? And then it’s like, it would really complicate it with Dave, which was pretty crazy.”

(49:39) Carrie Kerpen: “picture at this point, I have an LOI from 10Pearls, which is my acquirer, which is a fair offer. At that time, it was probably seven and a half times EBITDA. And I was feeling really good about them. I had met them in person, I felt good, but then this all cash kind of crazy offer comes in wacky, wackadoo, everything about it was wacky. And I met the woman that was in charge of this acquisition on behalf of this agency and I got caught…”

(54:06) Dave Kerpen: “That is a really important lesson. And there are those that would go into a negotiation pretending to be in good faith when their plan all along, I’m not saying this is what happened, but there are those where their plan all along or one’s plan all along is to go late into the process and then the last minute try to… And now I’ve heard stories too, literally folks on the closing table are trying to then change the terms of the deal at the last minute.” Article: Do I Need a Broker to Sell My Business?

(1:05:08) Dave Kerpen: “And it was really surprising. I mean, I felt very surprised given how much money we had in the bank. And ultimately I think the lesson learned, which is important for everyone listening to hear, John, is our issues are our issues and selling a company doesn’t change what we have anxiety about or fear of or depression around or issues with. I mean, our issues are our issues, right?”

(1:10:10) Dave Kerpen: “Carrie’s book is Work It: Secrets For Success From The Boldest Women in Business. That’s a great book.”

(1:10:26) Dave Kerpen: “Likeable Social Media is in its third edition and it’s in 13 languages. And I’ve written books called Likeable Business and The Art of People as well.”

(1:10:53) Dave Kerpen: “It’s called Apprentice and it’s a managed marketplace that connects CEOs and entrepreneurs with the best and brightest college students that serve as their executive assistant.”

(1:12:11) Dave Kerpen: “ Mention Built to Sell and get 25% off.”

(1:13:00) Dave Kerpen: “if anyone has any questions, comments, needs for help, I do office hours every week. Thursday afternoons,, I meet with anyone that wants to meet and you can hit me up on any of the social networks. I’m happy to be helpful if I can be.”

About Our Guest

Carrie Kerpen
Carrie Kerpen is an entrepreneur, best-selling author, speaker, & global champion for women. She is the co-founder and CEO of Likeable Media, a women-led digital agency that she sold to 750-employee 10Pearls in 2021. She is the author of WORK IT: Secrets for Success from the Boldest Women in Business and a columnist for INC and Forbes. Carrie has been featured in the New York Times, ABC World News Tonight, FOX News, & CNBC. She has keynoted conferences in London, Las Vegas, Mexico City, & NYC.

Dave Kerpen
Dave is a serial entrepreneur, New York Times best selling author, and global keynote speaker. Dave is the co-founder and co-CEO of Apprentice, a platform that connects entrepreneurs with the brightest college students as well as the co-founder and CEO of Remembering Live, a virtual memorial service company. Dave is also the co-founder of Listening and Beyond LLC and the co-founder of Likeable Media, an award-winning social media and content marketing agency for big brands. Dave is also a columnist for, an investor, and most important, husband to Carrie and a Dad to 3 amazing kids. Dave’s newest book is The Art of People: 11 Simple People Skills That Will Get You Everything You Want.

Connect with Carrie:

Connect with Dave:
Clubhouse @davekerpen

Watch the interview

BTS Footer Logo

Build, Accelerate and Harvest the Value of Your Company

© All Rights Reserved | Built To Sell