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January 11, 2017 |
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Julie Pickens and her partner created Boogie Wipes, a moistened tissue Moms use. But all was not well in Boogie land—in fact, the partners’ relationship became strained when Hardin announced she wanted out, forcing Pickens to find a buyer.
Julie Pickens and her partner Mindee Hardin created Boogie Wipes, a moistened tissue Moms use so their sick kids can avoid a raw nose in cold season. They patented their formula and won orders from Rite Aid, Walmart and Target leading to annual revenue of $15 million.
But all was not well in Boogie land—in fact, the partners’ relationship became strained when Hardin announced she wanted out, forcing Pickens to find a buyer for their company. The result would leave Pickens disappointed with her exit while partner Hardin had to file for bankruptcy.
Pickens described her exit as “a disappointment” because along the way she had to give up equity and take on debt in order to finance the 60-day terms retailers insisted on. Contrast Boogie Wipes with another consumer product with a cheeky brand, Dollar Shave Club, that used a direct-to-consumer subscription model. The direct model gave them cash when users subscribed and a direct relationship with customers which facilitated cross-selling. Most importantly, Dollar Shave Club’s subscription model gave them a premium valuation. The difference between Boogie Wipes and Dollar Shave Club comes down to the business model, which is something you will think a lot about in Module 5 of The Value Builder System™—get started now by completing Module 1 here.
What follows is a cautionary tale of what happens when partners decide to go their separate ways.
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Often referred to as The Boogie Mom®, Julie Pickens, along with her business partner, developed the first ever saline nose wipe called Boogie Wipes® as a solution for their kids’ sore, red, and runny noses. From this concept, Little Busy Bodies, Inc. was formed in May, 2007. Little Busy Bodies tripled their first year revenue in 2009 at $3.4 million and went on to achieve $10.2 million in 2011. In 2013, Pickens sold her interest in Little Busy Bodies. From there she took a role as VP of marketing for a consumer electronics company in Detroit, MI RFA brands, myCharge. Pickens now shares her entrepreneurial knowledge with other inventors and business owners through speaking engagements and media platforms.
Bootstrapping a 2-Sided Market to a 7-Figure Exit
Anna Maste built Boondockers Welcome, a kind of Airbnb for RVers, to $100,000 in Annual Recurring Revenue (ARR) when she received an offer of 3.9 times ARR. Maste was about to accept the offer when some soul searching led Maste to believe she could do much better. That kicked off a two-year journey of building the value of her business.
The Surprising Reason Ryan Kulp Sold Fomo
In 2016, Ryan Kulp launched Fomo because he saw marketers using aggressive popups on their websites.
Kulp reasoned that if he could show other people were shopping and interacting with a site, it would give new visitors confidence in the company.
Fomo allows businesses to show off real-time customer interactions (purchases, opt-ins, even pageviews) with a line of code the company installs on their site.
In 2015, Lorenzo de Plano co-founded Solace Technologies, one of the first vape manufacturers in the United States. The goal of the business was to create a discreet vape pen that customers could use as an alternative to smoking cigarettes.
The business boomed to revenue of more than one million dollars a month, but a looming threat had de Plano eyeing an exit. So, when a $15 million offer came in, he bit.
One Bold Decision That Led to a 20X Growth in Revenue
In 2009, Raman Sehgal started a small marketing company called ramarketing. In 2015, frustrated with the company’s progress, Sehgal decided to analyze his business.
That’s when he discovered something interesting.
Ramarketing’s most valuable customers (low-maintenance, sticky, high gross margin etc.) were in the pharmaceutical industry. Sehgal immediately pivoted the company to solely serve clients in the pharmaceutical supply chain.
In 2001, Haroon Mokhtarzada and his brothers started Webs.com, which allowed anyone to build a professional website. Eager to grow the company, they decided to raise money from a venture capital firm – a decision Mokhtarzada would later regret.
They ultimately grew Webs.com to over 50 million users and sold it in 2011 to Vistaprint for over 10x revenue, totaling $117.5 million.
How This Service Business Got Almost 20 X EBITDA
In 2019, Jonathan Shroyer, alongside his Co-Founder Scott McCabe, started Officium Labs with the goal to help clients turn contact centers into profit centers.
After two years of seeing incredible growth, Jonathan was approached by three investors to acquire Officium Labs. Shroyer ultimately ended up selling to Arise for around 20X EBITDA.
In 2013 South African entrepreneur Jason Bagley started Firing Squad, a lead generation company specializing in cold emails.
In 2020 Firing Squad signed an agreement to be acquired by Southern Web and was later rebranded to SiteCare.
The deal was something Bagley would later come to regret.
Yvonne Tocquigny built her advertising agency up over 35 years working with clients like Jeep and Dell. Then in 2015, she got a call asking if she would consider selling. The problem was that her agency had become part of who she was.
Why Candy Banners Sold for a Mint
In 2014 Tim Grassin founded Candy Banners, which designs ads that show up along the top, bottom, and sides of a website.
Grassin built a remote team in the Philippines to minimize his costs. Hiring inexpensive developers allowed Grassin to charge lower rates to agency owners, resulting in rapid growth.
The business had grown to over seven figures in revenue in 2020 when Grassin received an acquisition offer from one of his clients, Native Touch. The offer valued Candy Banners at around five times EBITDA, and the deal closed in 2021.
6 Things to Know Before Approaching an Acquirer
Touraj Parang has experienced the highs and lows of selling a company.
In 2009, Parang sold his first company, Jaxtr, for pennies on the dollar. He took the lessons he learned and joined Webs.com, where he helped Haroon Mokhtazarda sell his company for over $115 million.
Parang left Webs.com and joined GoDaddy as a leader in their acquisitions group, where they acquired dozens of companies during his tenure.
When to Tell Employees You’re Thinking of Selling
Lois Melbourne and her husband started Acquire Solutions, a software business that helped large companies manage their employees. After 18 years, they had grown to 85 people and received an offer from a private equity firm.
One Company, Two 8-Figure Exits
Ed Buckley started Peerfit, which allows companies to offer fitness classes as part of their employee benefits package. The company grew to more than 150 employees before receiving an acquisition offer for almost $100 million from a major fitness brand widely reported to be Peloton. Buckley retained some of the IP, which, in a strange twist, he was able to sell in another eight-figure exit months later.
