Exit Story: How Grace & Stella Survived a $28M Setback to Sell for 5.8x EBITDA

Imagine personally guaranteeing millions in debt to fill a $28M order—only to have it yanked at the last minute. It nearly bankrupted founder Adi Gullia as well as Grace & Stella. Yet he overcame it all and sold at a 5.8x EBITDA multiple.

In this episode, you’ll learn:

• A surprising strategy to minimize the impact of a bad year on your valuation—by creating three versions of your P&L.
  • How to navigate supply chain risk when rapid growth forces risky bets.
  • How to sidestep the “Amazon seller discount” and protect healthy margins (like selling a 65¢ product for $13.95).

Show Notes & Links

Connect with Adi on LinkedIn

Grace&Stella

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

Adi Gullia

Adi Gullia is the founder of Grace & Stella, a global skincare and beauty brand that began with a $600 investment and grew to serve over 5 million customers worldwide. Known for its vegan and cruelty-free products like the cult-favorite energy drink eye masks, Grace & Stella thrived under Adi’s leadership, achieving multimillion-dollar revenues and a strong presence on platforms like Amazon. In 2022, Adi successfully exited the business through a sale to a European private equity group, marking his third entrepreneurial exit. Passionate about mental health, Adi continues to make an impact through his ventures and insights.