The Broken LOI: How George Hartley Salvaged the Sale of SmartrMail
December 13, 2024 |
About this episode
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Bluethumb, Australia’s largest art marketplace, spawned SmartrMail—a SaaS business that grew to $2 million in annual recurring revenue (ARR). When George Hartley decided to sell SmartrMail, he faced a major setback: the buyer he signed an LOI with didn’t have the funds to close.
In this week’s Built to Sell Radio, George shares the lessons he learned when his first deal fell apart and how he ultimately salvaged the sale.
You’ll discover:
- Why relying on a proprietary process can derail your exit.
- The red flags to watch for when vetting a buyer.
- A hard lesson: always verify your acquirer has the funds to close.
- How to handle cap table challenges in a carve-out business.
- Strategies for avoiding dilution from unscrupulous investors.
George’s story underscores the importance of running a competitive process to create leverage and ensuring any buyer you sign an LOI with is prepared—and able—to close.
Show Notes & Links
Connect with George on LinkedIn
Visit Bluethumb
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.
Re-Trading: This occurs when a buyer attempts to renegotiate the purchase price of a deal after initially agreeing to one. It is often seen unfavorably as it occurs after due diligence, seemingly exploiting newly discovered information.
About Our Guest
George Hartley
George Hartley is the founder of Bluethumb, Australia’s leading online art marketplace, and SmartrMail, an email marketing platform for e-commerce businesses. With a passion for art and technology, George has created innovative platforms that empower artists, entrepreneurs, and e-commerce brands to thrive.
