The Wise Exit

Derek Gaskins - Episode 39 of the Cashing Out (M&A) podcast

00;00;00;26 - 00;00;02;28
Derek Gaskins
I think I exceeded 51%.

00;00;03;00 - 00;00;17;05
Derek Gaskins
I was decisive. And I think I was, you know, probably making good decisions, call it 75, 80% of the time. That's great. But you have to make decisions quickly and you have to learn from your mistakes and pivot and just go right back at it and, you know, if you sit and toiled and you don't make decisions. And

00;00;17;05 - 00;00;17;19
Derek Gaskins
so that

00;00;17;19 - 00;00;18;20
Derek Gaskins
that was always my approach.

00;00;19;23 - 00;00;34;13
Todd Sullivan
Welcome to the Cashing Out podcast, where our fellow founders share real stories and offer honest advice around selling their companies to some of the top acquirers in the world. My name is Todd Sullivan, CEO of Exitwise, where we help business owners create the exits they deserve.

00;00;35;02 - 00;00;55;15
Todd Sullivan
Today. My guest is Derek Gaskins, a good friend and founder of Retail Bloom, a full service e-commerce and digital marketing company which Derek created inside the walls of his family's third generation business. Derek grew this business quickly and then separated it from his family's business to sell it to a private equity firm in a very creative and lucrative transaction.

00;00;55;21 - 00;01;19;15
Todd Sullivan
After learning how truly valuable his business had become on its own, Derek is an e-commerce and digital marketing visionary and in today's discussion shares his advice on how to value a business inside a parent company, when to sell your business, and how to structure a transaction to really bet on the future. I hope you enjoyed my conversation with Derek Gaskins.

00;01;20;10 - 00;01;52;01
Todd Sullivan
Derek, thank you so much for doing this. I think this is going to be a really exciting episode for our fellow founders and business owners. I think you got a very unique story right? We've known each other for a little while and I got to follow your transaction really closely. I'm really excited to get into this realization that you actually had two companies on your hands, you know, the one that you really created on your own, and then the decision to separate that entity out into its own company and do it go through an M&A transaction.

00;01;52;08 - 00;01;52;10
Todd Sullivan
I

00;01;52;10 - 00;02;07;06
Todd Sullivan
think we're going to learn a ton. And, you know, I've been trying to get you on for a while, so I appreciate you being here. And when you said you could take this date, right. We came running over to your office and we bumped Mark Cuban from the spot. So thank you for being here. I think he should be second fiddle.

00;02;07;07 - 00;02;21;07
Derek Gaskins
I agree. Yeah. Thank you for having me on this. This. I've been looking forward to this. This is. This is. This is going to be a lot of fun. And yeah, I certainly had an interesting journey through the transaction, as you know. So yeah, excited to talk about it and singles and goes but we'll see if we can do it.

00;02;21;09 - 00;02;43;00
Derek Gaskins
So I think it's just it would be great to take us back right to the beginning. You were kind of your entrepreneurial career, right? Jumping into a family business. Maybe you start there and and take us through, you know, what you created out of that business. Yeah. I mean, well, the reality is there's the Sir Isaac Newton saying right, that for if I see further, it is by standing on the shoulders of giants.

00;02;43;00 - 00;03;04;24
Derek Gaskins
And that's really where it started. So my grandfather was born in 1914 in a small farming village south of Terre Haute, Indiana. At the ripe age of three years old. He stepped on a rusty nail. He lost his leg to infection. Fast forward, I want to say it was like ten years. I think he was like 13 years old and he received his first prosthetic leg.

00;03;04;26 - 00;03;19;21
Derek Gaskins
And that was a life changing event for him. And he made that decision at that point in time that he wanted to help other people and he wanted to make legs. And it was literally that was his decision. I'm going to make legs and I'm going to help other people experience this freedom that I've now found with my prosthetic leg.

00;03;19;21 - 00;03;46;18
Derek Gaskins
So he ended up, you know, finishing school and worked his way up to Indianapolis, did an apprenticeship with a prosthetist there, learned the art of making legs. Fast forward now probably another ten years or so, and he works his way up to metro Detroit, where he was working with Becker Orthopedics as the prosthetist. And then in 1957, he started his own business, American Orthopedic Services, where he was make, you know, continue to make legs and built a team around that.

00;03;46;20 - 00;04;07;29
Derek Gaskins
Fast forward another 15 years or so and my father came into the picture in that second generation of the business. It was my father and grandfather. They went beyond prosthetics and the orthotics. They started getting into wheelchairs and other medical supplies. And that business, you know, had some ups and downs over the years. And then when I was in college, by default, you just kind of work for the family business, right?

00;04;07;29 - 00;04;24;29
Derek Gaskins
So I was helping data with some of the accounting and bookkeeping and things like that. You know, at that point in time there was a gal that sold medical compression hosiery, and I just really admired this little business model she had because these people would come in, they would get their compression stockings, and then six months later they'd wear out and they'd come back and get more.

00;04;25;02 - 00;04;48;25
Derek Gaskins
What's an interesting model? So I ended up listing some of that product on eBay, and it was selling wildly fast. So then I went to school hard knocks and taught myself how to build a website and it launched for your legs dot com in 2003. And that was really the catalyst in the e-commerce world for me. And you know, continued down that path, did some acquisitions and some other website launches.

00;04;48;25 - 00;05;11;20
Derek Gaskins
We continued to expand that digital portfolio. And then I want to say around 2008 or so, 2009, we kind of faced this inflection point where we realized we're either going to continue burning the candle at both ends and be pretty good at two things one being the medical equipment and supply business, the other being this digital business, or we're going to get hyper focused on the digital business.

00;05;11;22 - 00;05;31;28
Todd Sullivan
So, yeah, you know, Dad and I sat down and we hammered through that and, you know, we made the decision to go digital. That's great. Thanks for sharing the history. It touches me because, you know, I started a business that really was enabled by my dad's business is very similar apparel manufacturing. And I decided, hey, how do we take this all online?

00;05;32;00 - 00;05;51;20
Todd Sullivan
And he was in manufacturing facilities really all over the world in Jamaica and El Salvador and Mexico, trying to find like the least expensive place to make it and really fighting for pennies. And we saw, you know, maybe the digital way, the online way was going to be, you know, the future model. So I understand kind of that relationship.

00;05;51;23 - 00;06;16;09
Todd Sullivan
But those are tough decisions, right? If they're going to pivot a business that your grandfather started into something that you've kind of figured out, what was that like coming to that realization and making the decision to go kind of all digital? Yeah, I mean, you know, me being who I am and, you know, being I guess sort of technically third generation in this business, I wanted to put my spin on it, right, which was the digital thing.

00;06;16;09 - 00;06;36;15
Derek Gaskins
So my decision was, you know, my mind was made. You know, Dad had some emotion with it. Right. There is history there, obviously, long history of my grandfather as well. Yeah. So certainly a little more challenging for him. But I give my father a lot of credit. He not only did he see the opportunity, but he also had the realization at that point in time that this truly was not the same business.

00;06;36;15 - 00;06;56;24
Derek Gaskins
Right. You know, this was a business that I had created that was inspired by the business that he had been running, that my grandfather had founded. So it was it was a pretty neat moment, I feel like, in our relationship, because, you know, he saw that, you know, in support of it 100% and just believed in me. And we made that leap of faith.

00;06;56;24 - 00;07;13;24
Derek Gaskins
So the the main business at that point in time was in Pontiac. And, you know, I said, hey, I think I found a great little place in Rochester Hills. And we went for it, right? And he was fully supportive and to this day is, you know, continually supported. Yeah. I mean, it was obviously the right decision. So let's get into that, right?

00;07;13;24 - 00;07;35;07
Todd Sullivan
You end up growing this business and you're making acquisitions to grow it, you're growing it organically, but you're seeing opportunities. Right? And one thing I want to touch on is that place that your standing as an entrepreneur, how do you get to see other opportunities? How do these things come to you to make all of these right decisions?

00;07;35;07 - 00;07;56;29
Derek Gaskins
Because really, right, successful entrepreneurs are making the right decisions over and over and over, right. To find real success. Yeah, well, I would argue that a successful entrepreneur is decisive and makes decisions that are correct at least 51% of the time. Right. And that was always my approach on it was just like especially in the digital space, things move quickly.

00;07;56;29 - 00;08;16;17
Derek Gaskins
Like we can't sit around and toil over decisions. We have to make decisions quickly. I've always been incredibly decisive and it's certainly frustrated people around me at times because I'm just like, Let's go. Let's just make a decision and go. Thankfully, I think I'm you know, I'm in enough of a of a visionary and I really have a good feel for where we're heading that,

00;08;16;17 - 00;08;19;03
Derek Gaskins
you know, I think I exceeded 51%.

00;08;19;05 - 00;08;36;02
Derek Gaskins
I was decisive. And I think I was, you know, probably making good decisions, call it 75, 80% of the time. That's great. But you have to make decisions quickly and you have to learn from your mistakes and pivot and just go right back at it and, you know, if you sit and toiled and you don't make decisions. And yeah, so that that was that was always my approach.

00;08;36;02 - 00;08;55;00
Todd Sullivan
I want to call that out. Right? Because, you know, one of the things I have up on my wall are like, what am I superpowers and what are my deficiencies? And the other that decisiveness, well, is one of those deficiencies for me. And I see the value in that, right? I've had co-founders that will say, Yeah, I'm going to make a decision really fast.

00;08;55;00 - 00;09;13;03
Derek Gaskins
I'm right 80% of the time. So, you know, get in line, join the crowd. We're going to move away from failures really quickly, too. And I really, really do believe great entrepreneurs make decisions. We're never going to have perfect information. You just got to move, right? You move, you learn, You move again. Yeah. So that that's great advice.

00;09;13;03 - 00;09;28;21
Derek Gaskins
Something I wish I had heard, you know, 25 years ago. Yeah. Make the mistakes, make the mistakes and learn from them. And, you know, the quicker you expose the flaws, the quicker you can do the root cause analysis and resolve that and be stronger going forward. So the longer you wait, the more bruise and the worse it gets.

00;09;28;21 - 00;09;52;02
Todd Sullivan
That's great. Yeah, you want to say so. All right. So clearly, you are making the right decisions. You're building this phenomenal company. Tell us, like the name of the company, how it's evolving. And then I really want to get into the meat of how you decide, Oh, my gosh, we've got multiple opportunities here. Sure. Yeah. So, I mean, the name of the business today is a leave a store com and you can visit the site and see what we're all about.

00;09;52;02 - 00;10;08;13
Derek Gaskins
Beyond that, we have a lot of really strong strategic relationships with some international brands that we represent that aren't publicly known. So the business is a little bit more than that. We're kind of a, I don't know, a full service kind of go to market provider to a certain degree. It's kind of an odd scenario that we're in there.

00;10;08;13 - 00;10;30;08
Derek Gaskins
It's not necessarily an agency, but we certainly have some strong allegiances within categories that we know well, and we continue to support those brands in a very strategic fashion. That's probably the best way to put that. But yeah, so we'll leave the stores. E-Com is the business. And you know what it really is, is a more traditional e commerce play going back again like I said the 2003.

00;10;30;08 - 00;10;50;25
Derek Gaskins
Right. And it's a reselling of products as we do have a handful of our own house brands. But the primary business itself was was resale. And as a result of that, you know, as things grew with the Internet, the race to the bottom began. So we saw a lot of people just competing on price. They were losing integrity.

00;10;50;27 - 00;11;11;00
Derek Gaskins
They were going on Amazon, a lot of shady sellers. They're just kind of like trying to hide behind, you know, whatever curtain they had. And, you know, we saw that. And it was hurting our business, too, because we're trying to run a legitimate business and we're seeing all of these gray market type sellers and activity taking place. That was with the brands that we represented that was causing a lot of harm.

00;11;11;05 - 00;11;27;23
Derek Gaskins
And that that was really the epiphany I had. I was just tired of seeing all of this take place. So that was probably 2015 where I'm like, okay, this is getting out of hand, like, and we knew how to fix it, right? We knew how to address the situation. But you have to do it with the authority of being the brand, right?

00;11;27;25 - 00;11;54;28
Derek Gaskins
So the this is where the concept for Retail Bloom was born was really just seeing the need of the brands that we were already selling. And we knew that they needed help navigating the Amazon marketplace, navigating the digital landscape, ensuring that pricing content integrity was in place, that everything was positioned and managed the right way to uphold their brand equity because we were seeing their brand equity just continually decline.

00;11;55;01 - 00;12;18;09
Derek Gaskins
So 2015, that's when Retail Bloom was formed and it was, you know, kind of that point where I said, you know, hey, I think we got something here. Yes. Yeah. And so that business obviously grows, right? And it's growing on a slightly different trajectory than leave the stores. Right. You're solving problems for other people in more of like an agency way on Amazon.

00;12;18;09 - 00;12;37;08
Derek Gaskins
Is that right? Way to say it. Yeah, exactly. So at first it was, you know, we knew there was opportunity to help the brands that we were already selling, Right. So at that point in time, you know, I want to give a shout out to, you know, my co-founders of Retail Bloom, Tom Sesti and Nicole Reich. Those two were pretty outstanding.

00;12;37;08 - 00;12;57;26
Derek Gaskins
It was it was really the idea I had I shared with Tom. And, you know, again, he thought it was a phenomenal idea and he was running the DOE Entrepreneurship program at Signal Valley State at the time. And he said, I've got this girl, and this is the only student I would at this point in time that I've been running this program.

00;12;57;26 - 00;13;13;28
Derek Gaskins
This is the one student we have to hire. And then he introduced me to Nicole, and we sat down and I shared the concept of retail when we didn't even know it was going to be called at the time. I shared the concept with them. And then, you know, Nicole came on as an intern. We asked her with like, Hey, see if you can build a go to market plan for this.

00;13;13;28 - 00;13;42;11
Derek Gaskins
And let's see where it goes. So that's how the whole thing really got started. And we got a line. Tom, Nicole, me, you know, we kind of some details to throw into this thing and all of a sudden we had a marketable service. That's fantastic. Okay, so you're growing on a business within a business, and at some point you guys decide or maybe you're seeing what's happening out in the market for companies that are similar to this, and we might call them like e-commerce brand aggregators, right?

00;13;42;13 - 00;14;00;20
Derek Gaskins
At least that was the timing that from my perspective what I was seeing in M&A. But you've made some conscious decision, right, to say, hey, what if we separate this business really out? It already has its own name and see what it's worth in the market. Can you talk to me about the conversations that went on to make that decision?

00;14;00;22 - 00;14;19;07
Derek Gaskins
Yeah, I mean, hindsight's 2020, right? Like if I could do this over again, I would have done it. You certainly done it differently. Really? Looking back at it alive of stores was the incubator in retail bloom Was the concept that it was incubating and we used to construct a lot of stores really as the catalyst to drive that thing forward.

00;14;19;07 - 00;14;36;26
Derek Gaskins
And in two fashions, one fashion was like we already had some active leads because there were brands that we were already working with and we knew we could help them. And the other fashion literally is just like the reality is we had backing, we had capital, we had, you know, we had an administrator of function, we had a back office, we had this ability to run that.

00;14;36;26 - 00;15;05;22
Derek Gaskins
And, you know, those those two components were pretty key to, you know, what Retail Bloom ended up becoming. And, you know, God bless Nicole and Tom because they really helped me grab reins on it. Tom, From an operational perspective, Nicole, from a sales perspective, and we went well beyond the, you know, clients that were kind of thrown into our laps as a result of the relationship with the stores and found very quickly that there is a lot of clients out there to be had.

00;15;05;24 - 00;15;28;12
Todd Sullivan
So the business went on a pretty steep trajectory relatively quickly. And yeah, and then fast forward a few years and, you know, like you said, you know, you were seeing money kind of flooding into the space from an aggregator perspective. And we saw it, too. And really it was it was an article that I had come across and I forget the exact number, but I was like, oh, Q4 of fill in the blank year.

00;15;28;12 - 00;15;49;07
Derek Gaskins
And, you know, we pumped $3.8 billion into this Amazon stuff, like, okay, well that's interesting. You know, and, you know, there was some realization that this aggregation model might be flawed to a certain degree, but I know what's not flawed is long standing, strong consumer brands, and that's who we were supporting. So that was that was the moment, right?

00;15;49;07 - 00;16;10;00
Derek Gaskins
That was the moment we're like, okay, we might have something. We might have something. Let me let me back up a second, because I know you're certainly giving kudos to Tom and Nicole, which is awesome, right? But I think true entrepreneurs are constantly looking for ways to disrupt, you know, their own businesses. How do you improve them? How do you take the next step?

00;16;10;02 - 00;16;35;13
Todd Sullivan
So now you're seeing this new industry evolve and it looks like there is an opportunity to potentially sell into that industry. Is that what you saw when the realization of billions of dollars floating into this to this space? Was it how do we capture that or is it time to sell the business? Like, what were you thinking to make the eventual sale a business?

00;16;35;15 - 00;17;01;00
Derek Gaskins
Yeah, I mean, really, at that point in time it was I was intrigued, you know, I didn't understand that world at all. And, you know, the the first time you see the term private equity and you think maybe there's a path for me there, it's daunting. Yeah, it's it's a little scary. Like it's intimidating. It's like, I don't I don't understand this that much.

00;17;01;00 - 00;17;27;18
Derek Gaskins
Yeah. So, but yeah, when I first saw that article, it was definitely intrigue and, you know, again, thinking like we might have something here. I'm not sure what that is, but let's find a way to explore it. That's great. I think for a lot of our founders, what you just said is very typical. I didn't know what private equity was and in fact that term is a pretty big term.

00;17;27;20 - 00;17;48;24
Derek Gaskins
It can mean minority investments, which venture capital firms tend to make, and it can mean majority control investments. So more than 51% of your business. And that's kind of typically how we talk about private equity. But, you know, what is that model? How do they acquire your businesses? What does it mean to you going forward? Those are all complete mysteries.

00;17;48;27 - 00;18;06;12
Derek Gaskins
And frankly, one of the reasons one of the main reasons we started exit why is right the whys part how do you get smart about the exit and private equity is a very important class of buyer so I appreciate you bringing that up because I think a lot of founders feel like they need to know all of these answers and be really familiar with the terms.

00;18;06;12 - 00;18;32;27
Derek Gaskins
And frankly, they shouldn't be. They should be great at building their businesses. And when it comes time to selling, you can go out and there are a lot of places to get educated and we can certainly be one of those sources We'll no doubt. And Todd is, you know, Matt Damon made a connection and we connected on this exact deal and it was you and Matt in the early stages there that really helped inform me because again, I was naive and just didn't understand this world.

00;18;32;27 - 00;18;51;14
Derek Gaskins
So, you know, I'm forever grateful for the two of you to, you know, that you were able to provide some of the guidance and and help fill the blanks for me because, again, I was totally firing blindly. Yeah. I mean, that was a really fun process because for us, we really start from how do we all get smart, how do we all get educated around this?

00;18;51;16 - 00;19;11;07
Todd Sullivan
And I think when we started looking at your business, we didn't really know what this was worth, right? It was it really interesting thing you had profitability, you had growth rate, but we had to tap into the experts that we have around the world to really say what this valuation could be. And when you realize, oh my gosh, right.

00;19;11;07 - 00;19;32;09
Derek Gaskins
This is the range of what my company could be worth and who could be interested in it and how long it would take to do a transaction, You can start making really, really smart decisions. So we appreciate, you know, being part of this and certainly, you know, mentioning Matt. Matt was instrumental in putting all the pieces together and your transaction was not really simple, right?

00;19;32;09 - 00;19;57;03
Todd Sullivan
Ultimately selling to private equity, but almost merging. Right. Having a strategic partner out there that you knew of finding like amazing fit. And I think that that is what our founders need to understand, right? It is you really trying with private equity is it's finding that needle in the haystack for them And you guys manufactured that right? It is really that was your effort in making that all work.

00;19;57;03 - 00;20;22;10
Todd Sullivan
So fantastic amazing transaction. What I think our founders can learn a lot from your story really is that you had a business, you disrupted it, you innovated within it and you saw that innovation being potentially very valuable in a market. And so you said, I want to go out, ask questions, I want to learn about this, and you get the realization we come back to you and say that division of your company is worth way up here.

00;20;22;17 - 00;20;57;00
Todd Sullivan
Right? So, you know, like you now you have information that made you say, I want to go sell this thing. And so it is it's really about all about getting smart, but being able to be flexible in the way that you were right to separate out a division of the business to create liquidity. Yeah. And, you know, not only did the, you know, multiple surprised us pleasantly, of course, but, you know, learning the phrase platform company and learning that this is just a rung on the ladder, this is not necessarily the end.

00;20;57;00 - 00;21;18;28
Derek Gaskins
This is more of the beginning. That it is the end. That was what, you know, me being the serial entrepreneur and like that's what excited me more about you know, as I learned what private equity actually meant, how these, you know, transactions were actually structured, learning that like, okay, we're we're stepping on the first rung of the ladder, like we're at ground level right now.

00;21;19;00 - 00;21;36;10
Derek Gaskins
I didn't realize I thought we were doing pretty good. I'm like, well, shoot, we're at ground level and now we're on the first rung of the ladder and the ladders relatively tall. So it really, you know, sparked that entrepreneurial spirit of mine. Right. And knowing like, hey, there's a lot more this is going to get even more. Yeah.

00;21;36;10 - 00;21;58;12
Todd Sullivan
Let's tap on that. So you said platform, right? And that's usually for a private equity firm. It is the first investment that they are making in a particular thesis that they think will grow both organically right through sales and inorganically. They're going to go out and buy what they might call a bolt on. So they're bolting on to the platform so you can have growth.

00;21;58;19 - 00;22;18;01
Todd Sullivan
And when you're saying you're at that bottom rung, you're really you are the platform, you're the first purchase that is made and you have rolled equity into that deal, right? So you own a significant portion of this. And if you're choosing correctly, which I really believe you have, this private equity firm is going to make that equity worth a lot of money.

00;22;18;02 - 00;22;36;25
Todd Sullivan
Right. And so you're at the beginning of that journey and you've got to help steer that ship and drive that future outcome. Yeah, absolutely. And yeah, shout out to long term Capital Partners because we're super happy with Nick and the team there. They've been phenomenal in no doubt in my mind at least that we made the right decision there.

00;22;36;27 - 00;22;55;13
Todd Sullivan
And you know, to kind of circle back a minute ago, you mentioned, you know, this other entity, and that was kind of in discussions and it was we were talking to this other agency at the time, even prior to the introduction to Long Shore, and we knew there was a lot of synergies there. And, you know, we were already in discussions with that.

00;22;55;13 - 00;23;24;12
Derek Gaskins
So, you know, being able to roll into this deal and step on the first rung in the ladder and not only establish ourselves as the platform, but to immediately round out our service offering by doing this strategic merger with Blue Hill Media was absolutely outstanding. And, you know, when we look at what we are, which now, you know, for anybody listening, we were retail blooming and now we are working towards a final rebrand as blue wheel.

00;23;24;14 - 00;23;52;03
Derek Gaskins
So we feel that we are really that 360 degree e commerce digital marketing provider and, you know, just hitting on the full gamut of what all of these consumer brands really, really need. And it was so great Blue wheel, what they had created, how seamlessly it fit with what we had created. It's just it's so cool. And then yeah, to have the team along shore behind all of us is really phenomenal.

00;23;52;08 - 00;24;18;12
Todd Sullivan
Yeah. Let me let me talk about, you know, the idea of Long Shore when Matt, one of our partners, makes this, you know, introduction, we are not making introductions to private equity blindly. We have to know that we've had done deals with them before. We know how they behave. And I think it's really important when you're bringing on anyone that's going to advise you on who to sell to, that they actually know who these people are, right?

00;24;18;14 - 00;24;34;13
Todd Sullivan
They got to behave well. So you have just first rate partners. So we're really excited for you there. We we have really good sense that this is going to work out well. But I think that that is a lesson, right? It isn't just sell to any private equity firm. You've got to know them. You got to have relationships.

00;24;34;13 - 00;25;00;17
Todd Sullivan
And, you know, fortunately, we had one here. So anything else that you would share with our fellow founders about going through that process that you think could be kind of good learnings, any hiccups along the way that you were able to jump through that, combining with another company, right, to become that big enough to become a platform is pretty unique, right, that you're putting multiple pieces together in order to get this amazing transaction done.

00;25;00;20 - 00;25;25;16
Todd Sullivan
I don't want to put words in your mouth, but you know, what else do you think we can learn from prior? The biggest thing I learned from going through this is really, you know, again, I mentioned earlier, looking in the rearview and hindsight is 2020 right. But looking back at it, I've always been, you know, the visionary and the idea guy, and I'm always come up with new ways of doing things and whatever else in retail boom was one of those ideas.

00;25;25;19 - 00;25;47;00
Derek Gaskins
But when that idea came to fruition back in 2015, it didn't come to fruition with the thought of I can turn this into something and there's an exit. And I never thought of business that way because, you know, my grandfather and my father, I've sat there and watched them work until they were 80 years old. And and it's like, well, it's just what you do, right?

00;25;47;00 - 00;26;06;13
Derek Gaskins
You just kind of work. And if you got a great ideas, you implement the great ideas and you just keep working. So framing, any idea, like my advice to anybody that's an entrepreneur comes up with a great idea is to always frame the launch of that idea with this assumption of an exit to make sure that things are just structured the right way.

00;26;06;15 - 00;26;21;26
Derek Gaskins
So you got the right people involved, that the source of capital is what you want it to be. All of those things that can just heavily influence the actual exit. Just be very cognizant of that on the front end and going forward. Now in my career, I will always be cognizant. Yes, because you're right, there were there were a few hiccups along the way.

00;26;21;26 - 00;26;45;25
Derek Gaskins
There were some challenges because I do have some investment partners in the business. At the end of the day, you know, selfishly, I'm okay with how it played out because it afforded me the opportunity to roll forward a book. A vast majority of my equity is still in the deal, right? Like I had a very minimal cash. You know, it was very much focused on the future.

00;26;45;25 - 00;27;06;13
Derek Gaskins
And to me, I'm like, well, typically in, you know, as you know, in a transaction, that's not always the opportunity where you can roll 90 plus percent of your equity. The only way that happens is if you kept somebody out entirely. So that's what happened with the investment partners, is we were able to cash them out in in their entirety, which just allowed me to roll, you know, a huge portion of my equity.

00;27;06;13 - 00;27;32;12
Derek Gaskins
And again, I feel like we're on the first rung of the ladder. So I'm really excited to see what that roll forward is going to do for me. That's great, right? I think, you know, the numbers are all relative, right? And I'm super excited with the outcome that you have. One thing to touch on is you make an amazing point of what are the kind of building blocks of the company that help you grow and be successful.

00;27;32;12 - 00;27;52;22
Derek Gaskins
But what is that going to look like when you cut when it comes time to exit? And the investor is a very important component of that. Oftentimes the investors become unaligned with the entrepreneur, and what's good for an entrepreneur or the investor might say, No, no, no, no. I want I want to put more money in. I want to keep this thing going.

00;27;52;24 - 00;28;10;21
Todd Sullivan
Because what we see, particularly venture investors, is they want to bet on their winners. They want to turn their home runs into Grand Slams. That's their model. And for us founders, we might say, Hey, I'm a career entrepreneur. This is what I do. I'm going to build another business. I want to take some chips off the table and materially change my life.

00;28;10;23 - 00;28;32;04
Todd Sullivan
So that is the conflict we can often see with investors in in these businesses. And then I think there's a lot of other things, right, that you have probably learned of how you will set up your next company to make that exit, that transition, you know, even easier. Derek, this has been awesome. I really appreciate you taking the time, getting to see that transaction.

00;28;32;04 - 00;28;56;07
Todd Sullivan
The evolution of how this all happened was really phenomenal. There was so many moments, I think, that had to go right to make this ideal outcome. And now you're on a train that is looking really, really exciting with Long Shore as a fantastic partner moving forward. So I'm really excited for you. Again, just thank you for being here and sharing the story.

00;28;56;10 - 00;29;19;12
Derek Gaskins
Yeah, absolutely. Thank you. Todd. You know, I feel incredibly blessed not only with having a great partner like Longshore, but again, the team that we have with now, what's called Blue Wheel is absolutely phenomenal at Tom, our CEO is incredible. Tom says that you're still with the team. They're running the operations. Incredible. Nicole Running sales, marketing, absolutely incredible.

00;29;19;14 - 00;29;28;10
Derek Gaskins
So I just feel incredibly blessed to be on that first rung of the ladder with a team that's just totally outstanding and definitely good things to come there. So thank you for having me. Thank you.

00;29;28;13 - 00;29;50;23
Todd Sullivan
Thanks again for listening to the Cashing Out podcast. For more founder exit stories, please subscribe to the Cashing Out podcast on Apple, iTunes, Spotify, or wherever you listen to your favorite podcasts. And please remember ex it was dot com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.