Exit Story: How Dave Sifry Lost $100 Million, Lessons from Starting 9 Companies, the Dangers of Raising Money, and Why He’s Doing It Differently with Warmstart

Dave Sifry has founded nine companies, including Technorati and Linuxcare, raising more than $170 million along the way. In this episode of Built to Sell Radio, he reveals how he went from being worth more than $100 million on paper to watching that value disappear — and what he’d do differently if he had the chance again. 

Despite those scars, Sifry has built an extraordinary career. He has founded nine companies and today is founder and CEO of Warmstart, a platform that helps entrepreneurs turn old contacts into new business. 

In this conversation, you discover how to 

• Decode how a new round quietly resets your exit bar to 5–10× the post-money. 

• Recognize veto rights and preferences that can block a sale you want. 

• Weigh majority control versus dilution when the board takes over. 

• Avoid the ego trap that leads owners to pass on life-changing offers. 

• Read an earn-out and judge how much of your price is truly at risk. 

• Build the “business physics” of your company before hiring ahead of revenue. 

• Use investor relations strategically to create leverage, not distractions. 

Listen now to hear Dave Sifry’s hard-earned lessons on the real cost of waiting too long to sell. 

Show Notes & Links

Warmstart.ai

Follow Dave on LinkedIn

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.

Errors and Omissions Insurance (E&O): This is a form of liability insurance that protects companies and their employees against claims of inadequate or negligent actions, particularly in professional advice and services.

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

Dave Sifry

Dave Sifry is a serial entrepreneur and software engineer best known as the founder of Technorati, the pioneering blog search engine that helped define the early social web. A longtime advocate for open source and open data, he also co-founded Linuxcare and Sputnik, launched Offbeat Guides, and later led the Center for Technology and Society at the Anti-Defamation League. Based in San Francisco, Sifry continues to advise startups and organizations at the intersection of technology, media, and social impact.