Anne Mahlum on selling [solidcore] for $100M | Built to Sell Radio
May 23, 2024 |
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Today’s episode of Built to Sell Radio features Anne Mahlum, a fearless entrepreneur who redefined the fitness industry. After wandering into a Pilates studio in L.A. and thinking, “I can do this better,” Anne threw all her savings—$175,000—into launching her own version of the company, founding [solidcore], a fitness powerhouse that she later sold for $100 million.
Anne shares her remarkable journey, detailing the strategies she used to transition leadership, navigate fundraising efforts, and build a company with enduring value.
In this episode, you’ll learn how to:
- Handpick your second-in-command.
- Retain control after raising money.
- Tell your employees you’re selling your company.
- Avoid putting up a security deposit when you lease space.
- Create a category of one.
- Take some money off the table without giving up control.
- Cultivate and protect a strong work culture.
Show Notes & Links
Connect with Anne on LinkedIn
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Definitions
Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.
Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.
Letter of Intent (LOI): This document outlines the basic terms and conditions of a deal before a formal agreement is drawn up. It serves as a mutual commitment between the buyer and the seller to move forward with the transaction on the agreed-upon terms.
Convertible Note: This is a type of short-term debt that can be converted into equity, typically during a future financing round. It’s often used by startups when it’s too early to determine the company’s valuation. Imagine your friend is opening a lemonade stand and needs $10 to start it. You decide to lend them the $10 they need. But instead of just asking your friend to pay you back in money, you both agree that you can choose to get paid back with lemonades once the stand is up and running.
A convertible note works similarly in the business world. It is a form of short-term debt that converts into equity. In simpler terms, when you give money to a company using a convertible note, you’re initially lending money to the company, just like a loan. But, instead of getting paid back with money, you have the option to get paid back with shares in the company. So, if the company does really well, having shares might be more valuable than just getting your money back with interest.
In essence, a convertible note is like lending money to a friend’s lemonade stand with the option to choose lemonades over your money back in the future if you believe those lemonades will be worth more than your initial $10.
About Our Guest
Anne Mahlum
Anne Mahlum is an American entrepreneur, motivational speaker, and CEO renowned for her impactful leadership and innovative approach to empowering individuals. In 2007 she founded Back on My Feet, a national non-profit that uses running to help those experiencing homelessness achieve self-sufficiency. As CEO, Anne expanded Back on My Feet to 14 cities.
In 2013 Anne launched [solidcore], a Pilates-inspired fitness company that quickly became one of the nation’s most successful brands. Through strategic fundraising, she scaled [solidcore] to over 115 locations across the U.S., exiting the company in April 2023 for over $100M.
Nowadays, Anne focuses on investing, advising, and speaking engagements, covering topics such as leadership and entrepreneurship. She is dedicated to supporting initiatives aiding individuals struggling with addiction and wrongful conviction, earning recognition from CNBC and features in prominent media outlets.
