One question from an acquirer. One honest answer. Nearly $20 million gone.
David Sinkinson bootstrapped AppArmor for eleven years, with no investors, no debt, 50/50 with his brother, and built it into the most widely used campus safety platform in North America. When a buyer came calling, the deal nearly fell apart because of a single exchange in the negotiation. The brothers had turned down a $20 million offer the year before because the terms were too complicated. Then the same buyer came back with double the price, all cash, and none of the strings.
But the exit wasn’t the end of the story. Recorded live at the Value Builder Summit, David returns to Built to Sell Radio for the first time since selling and goes somewhere most exit stories never do. He talks candidly about the identity crisis that followed a life-changing deal, what nobody tells founders about the years after the wire hits, and a take on employee equity that most owners will find uncomfortable.
You’ll learn:
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Why one offhand answer to an acquirer nearly cost the Sinkinson brothers $20 million, and what to say instead
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How turning down a $20 million offer led to a $40 million all-cash deal a year later with no earn-out
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The unexpected emotional struggles David faced after the exit and what eventually replaced them
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Why David believes giving employees equity is a mistake and what he thinks works better
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The co-founder dynamic that made two brothers with a ten-year age gap one of the most effective founding teams in the room
Quote of the Week
We turned down $20 million. A year later, we got $40 million, all cash, no strings.
Deals
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Royston Group, a company that makes the shelving, signage, and refrigerated display cases you see inside gas stations and retail stores, was acquired by LSI Industries (Nasdaq: LYTS), a U.S. manufacturer of commercial lighting and display solutions, for $325M.
Royston generated $38M in EBITDA on $272M in revenue, implying a valuation of ~8.6x EBITDA.
