The 8:1 Flip
November 2, 2016 |
Want to increase the value of your business by up to 71%?
Take the 13-minute survey and get your Value Builder Score
About this episode
Subscribe:
Steve Huey bought The Learning House for $2.7MM in 2007 because he saw the opportunity to professionalize its sales and account management. Five years later, Huey sold the business for $27.5MM earning his shareholders an 8 to 1 return.
In this episode, you’ll hear Huey’s advice on:
- How to raise a $4MM angel round in seven days.
- An inexpensive way to figure out what your business is worth.
- Buying a business with little of your own money down.
- Handling a buyer who drops their offer after signing an LOI.
- Differentiating between an earn-out and an escrow.
Have You Built an Automatic Business?
The Learning House garnered an offer from a private equity firm of almost four times their top line revenue because they had a recurring revenue model. Turning your transactional model into an annuity stream is what we tackle in The Automatic Customer Builder tool, our focus in Module 5 of The Value Builder System™. Complete Module 1 by getting your Value Builder Score.
Click to Tweet: Episode 67 of #BuiltToSell Radio: The 8:1 Flip with Steven Huey.
To hear the entire episode on iTunes, click here and don’t forget to subscribe! You can also find us on Stitcher , Soundcloud, or anywhere podcasts are found!
At Built to Sell we’re all about shifting the balance of power from the buyer to the seller. If you support our mission, please write a review on iTunes—and if you have any comments or questions you can find us on Twitter and Facebook. Tune in every Wednesday for another episode of #BuiltToSell Radio with John Warrillow.
Our guest
Steve Huey is passionate about helping others reach their goals. His belief is that human capital is quickly becoming the only differentiator between good companies and great ones. He strives to create a corporate culture that embraces the entrepreneurial spirit in order to align both personal and professional goals. Huey believes if you can do that, you are assured success. Huey also loves integrating cutting-edge technologies into already existing markets that desperately need them. An experienced executive in leading and growing technology-based businesses, he manages aggressive and innovative management teams—including business development, product design and management, software architecture and operations management.
Related to this topic
Inside the Mind of a Private Equity Investor
Frank Cottle led an investor group to buy Hi-Mark Software for 10 times EBITDA. Cottle then sold a chunk for 15 times and ultimately sold his last tranche of equity for more than 16 times EBITDA to Lufthansa.
From Technological Obsolescence to a Multi-Million Dollar Exit
From a service no one wanted anymore to a growing business and a strategic buyer, find out how AMI was rebuilt to sell.
How One Key Hire Helped Dimple Up Their Value By 500% in 2.5 Years
Teetering on the brink of liquidation, a key hire at Dimple led to a dramatic turnaround that resulted in a $13.4M exit.
The Kevin Harrington Way to Structure the Sale of Your Business
Mark Timm built Cottage Garden, a company selling decorative music boxes, to $8 million in revenue and around $1 million in EBITDA when he decided to sell it. Timm sold the business for around 4.5 times EBITDA. He got half of his cash upfront, with the other half paid over a five-year earn-out. Timm not only stayed for his earn-out but when the acquirer decided to move the offices of Cottage Garden, Timm agreed to repurchase the business, only to sell it two years later, for a second time.
How To Package Your Expertise Into A Subscription
Marc-Andre Seguin launched JazzGuitarLessons.net in 2009 to share his knowledge as a guitar teacher.
Raising Money? Avoid This Sleazy Investor’s Trap
Barry Hinckley founded Bullhorn with his two partners. They raised three rounds of financing and went on to sell for $135MM in 2012. Hinckley and his team raised money from family, friends, and venture capitalists and have the scars to prove it.
3 Ways to Untangle Yourself from Your Business
Debbie King was running on a treadmill so familiar to service company owners. Her company, Association Analytics, helped associations make sense of their member data, and she was wasting time on proposals that often did not get accepted. Then, when King did win a project, she was creating a custom solution for every job that required her to hire senior-level staff and personally get involved in client work. The model put a cap on her business, and when she reached 20 employees, she decided it was time to get out.
When To Hire A President To Run Things
Want to bring in a President to run your company day-to-day? Here’s how to get it right.
Peach New Media was launched in 2001 and sold in 2015 by Dave Will. Will had built his software company up to 40 employees when he received an offer from the private equity group Accel-KKR that he simply could not refuse.
How to Punch Above Your Weight Class With Acquirers
Peter Carlin started Logicearth to improve how companies teach their employees online. They built e-learning courses that were almost as good as being there in person. They caught the attention of a marketing agency called The Creative Engagement Group (TCEG), which had clients that needed online courses.
Walking Away From an 8 Figure Exit
Josh Davis started Spirit of Women, a marketing agency selling content about women's health to hospitals. Davis built the company up to almost $10 million in annual revenue when he kicked off a process to sell it, which he hoped would garner an offer of around 7x Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).
How To Recover (and thrive) After Splitting From Your Co-Founder
Four years ago Nexalogy CEO Claude Théoret was counting the employees he had to lay off. His company had burned through their $600,000 seed round of investment and he was running out of cash. An ugly split with a former co-founder had divided his team, and Théoret had to turn to his wife for a $40,000 loan.