The $26 Million Dollar Man

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Josh Delaney started FAB CBD, a CBD e-tailer, in 2017. Delaney’s Mom was his first customer, but his sales quickly went beyond family members. By 2020, through a combination of savvy marketing and good fortune, FAB CBD had risen to more than $10 million in annual sales. In early 2021, Delaney caught the attention of High Tide, a Calgary-based cannabis company that offered him $13 million in cash plus $8 million High Tide shares in return for 80% of FAB CBD (an implied valuation of $25.8 million).

In this episode, you’ll discover:

• How Delaney used affiliate marketing to double his revenue each year leading up to his exit.
• A breakdown of the two types of affiliate contracts and why Delaney prefers one over the other.
• The definition of “optionality” and why you want it.
• Why getting “too romantic” about your company can undermine your negotiating leverage.
• The one thing you absolutely must ensure if you’re going to take any of your sale proceeds in stock of the acquiring company.
• What “EBITDA arbitrage” is and how to use it in your negotiation to sell.
• What a put vs. call option is and how to use it to drive a fair deal for yourself.

 

Check out our article on Lessons In Building A $25.8 Million Business.

Check out our full M&A Glossary

About Our Guest

“I sell thousands of products a day so I can always afford two apps at dinner.”

 

Over the last couple decades, Josh has built, bought, operated, and sold multiple businesses. From small websites, physical franchise locations, and most recently large e-commerce companies. Josh’s “day job” is mostly affiliate marketing, SEO, paid media, daily operational stuff, product development, and brand development. He’s formulated most of his own products and takes pride in creating products that most others simply won’t attempt.

 

Connect with Josh:
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