The Wise Exit

Cashing Out Podcast | Episode 12 | Exitwise CEO, Todd Sullivan's Entrepreneurial Journey - Hockey, Building Companies, and 20+ Years of Exit Stories (Part II)

Todd: [00:00:00] 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. Cashing out listeners, this is part two of a two part podcast.

Today based on multiple requests from our listeners, my friend, fellow entrepreneur, and co-founder of Exitwise, Brian Dukes is going to interview me to help our listeners learn a little bit more about my background and how we came to start Exitwise. We'll take you through the four companies I've started and sold while sharing a few memorable stories about my co-founders, investors, customers, and acquirers that have made my professional journey worth the risk, the sacrifices, and the emotional rollercoaster that is entrepreneurship.

If you haven't listened to part one, we encourage you to do that first.

Brian: So, Gets closed down - what do you do next?

Todd: So, you know, I licked the wounds and there was a business plan contest. It was called the Tech Crunch 50. Sure. And out in Silicon Valley that I'd heard of. And I think it started out as the Tech Crunch 40.

And then that year became the Tech Crunch 50. So, you know, gaining some popularity and I think today they call it Tech Crunch Disrupt. So I took a business plan that I wrote in one of our classes and just said, all right, let me, I'll send this over and, uh, you know, smoke and mirrors, Hey, I got [00:01:00] this business here and I got this call.

I wish I could remember who from, but it was somebody that, it was the name I definitely recognized. I was like, whoa, I can't believe I'm on the phone with this person. And she says to me, you know, you, you're one of the tech crunch. . And I was like, oh, awesome. So what does that mean? And she's like, well, you're going to present your product on stage in front of a lot of people out here in Silicon Valley.
Are you ready for that? I was like, oh, I, how much time do I have? Yeah. Like, and when is this? And uh, I said, so I have to admit that. The product doesn't actually exist. I would love to build that product. And she's like, okay, so we actually have to launch products on our stage, and since you don't have a path to launching this product, you can come out, but you're part of basically the mosh pit of other entrepreneurs just hoping that they can have a chance at the last spot.

So they assign 49 names and then they leave one for the hundreds of startups that [00:02:00] are there trying to win that last. So, um, I was like, well, sure, if they thought it was good enough to put me in, I guess I'm gonna win this. I get there and I really have no idea what I'm getting into, but I've got my little poster board and uh, I show up and Wow.

Right. It is amazing. All of the businesses lined up, everybody vying for that spot and you have two days, I think it was two days, to pitch as many people as you could that are just walking by. So I got to the point where I was like tackling people to listen to me and that each person had a poker chip, and if you could win that person's poker.

Your jar would fill up and whoever had the most poker chips at the end would win. And so again, I had to call my brother. I'm like, this guy does not lose. So I call him in and he helps pitch as I, you know, tackle and grab poker chips from people, . And then, you know, after bruises, he would take the tackling mode and I would pitch.

And after two days we won. We won by a [00:03:00] huge landslide. And I can tell you, Like all the other products, they would wait, they would wait for people to come and ask them, tell me about your business. And we were like, go up to these people. We're gonna tell you about our business and you're gonna give us our, your chip.

Right? It was just a matter of we can't lose and sure enough we win. I get that last spot up on stage and I dunno if I'm the last one to pitch, but it's, you know, near the end of. And you still, it's, it's an environment that I have, I have no idea what I'm stepping into. And I step on that stage and next to me are now judges and all the lights are right in your face.

And Jason Calacanis is MCing the event and he's looking at me saying, go, don't screw up. I don't know where the microphone is. I don't know anything. And the guys sitting next to me who are my judges are Reed Hoffman, founder of Linked. Sean Parker, founder of Plaxo Napster, and the president of Facebook at one point.[00:04:00]

Dick Costolo, Michigan grad. Go blue. Right? Go blue. But president of Twitter and. I'm in this Disney world of entrepreneurship with the biggest names in the world. It was incredible. And so I have no idea what I said. I don't know if anyone clapped or laughed or what. I know Sean Parker said I had the worst name for a company at the time.

Good. And my justification was, well, it was free and I don't have any money. . Yes. So anyway, when you get up on a stage like that and someone else has said you're a top 50. In Silicon Valley. Everybody at that point wanted, when I say everybody, venture venture capitalists wanted to know more, so it really allowed me to go up and down Sand Hill Road, meet with venture capitalists, pitch an idea really, and.
These guys are seeing incredible business ideas. Businesses grow. It felt like they really have the keys to the kingdom. You know, every meeting you're [00:05:00] walking into, they've probably heard that pitch from somebody way smarter 10 other times. And so I really took the approach of can you take your investor hat off and put your advisor hat on, right?

I'm willing to learn, I'm willing to adjust. And one guy, uh, Rich Wong at Excel Partners, we got up on a whiteboard and he's like, yeah, you gotta change that name. And we came up with the name Crowd Zone and I was able to get the URL and he said, we need to give this a shot. And actually I ended up having a different partner from the firm supported.

It was Peter Wagner at Excel and one of their eir, so entrepreneur In Residence at Excel to join me. And so it was 500. EIR go out and build this idea, right. Of crowd zone. Yeah. Just really, really exciting blur of a time. So when you say, what did I do next? It was almost like life entrepreneurship just took over and I was along for this ride.

Brian: And you're living out west now at this point.

Todd: Yeah, I quickly found a place to live [00:06:00] very, very temporarily during that. My brother lived out there, so it was kind of crashing with him until we could find a spot and, um, I was getting married, so my, actually it was my girlfriend at the time and, um, she got into UCSF'S dental program for a pediatric dentistry.

And so the star kind of aligned and we ended up finding an apartment.

Brian: That's great. I can't imagine that stage and what happens during and after you're standing up there pitching this idea, maybe it's going to have legs or not. And then you, you come out of there and you're, as you say, the Disney world of venture capital, right?

You're, you're walking into these offices, you're probably, um, balancing fears of, I'm not good enough, or they've heard this pitch 50 times already, versus like, this actually might be real and people are listening to me and I may actually be able to get some money to take this thing

Todd: off the. I think of it as, when I say kind of the Disney world of entrepreneurship, I think of it's more every entrepreneur who's out there who is [00:07:00] smarter, better funded, working harder than you are, and there's a hundred of them doing the exact same thing, the exact same idea, right?
So when you wake up to that fact, it's like what little competitive advantage can you. And so the only competitive advantage I really had at that point was people were willing to meet me. And when you get out there, when you get in right with the right people, then doors seemed to open. And I'm not saying that I was really in right, but I was kind of dancing around, knocking on a lot of doors, and people were very.

I met guys like Ravi Mohan at Shasta Ventures. He is the founder of the firm, Tomas Toga, who was at Red Point Ventures. His door was always open. Even fellow entrepreneurs like Jonathan Swanson, the co-founder of Thumbtack, was always willing to sit down. Ricky, Jeff, ma, all these guys, super supportive. Even Matt Kohler at [00:08:00] Benchmark Capital, I think he helped me write the final deck that I presented at the Tech Crunch 50.

He's a Yale grad. Right. And so maybe that was kind of the kinship that, you know, allowed him to help. But there's a lot of that out there, right? They're generally rooting for, uh, success even though it's like very cutthroat and competitive to get to the top.

Brian: Sure. I think that's what I enjoy so much about the founder community is, uh, the willingness to support. Right? Of course, business is cutthroat and it will be VC definitely. But the idea that there are so many people that are rooting for you to help and so willing to lend a hand to. Those different ideas and taking those first couple steps to see if you can actually make it. Now, of course it's a bit self-serving that if you take those couple steps, now they've got an inside track.

Right. But even so, I think that community is really, really strong and super helpful. Right. That's really kinda the backbone of it. So Pete Karmanos kind of helps you get into the hurricanes arena and you're in, in Minor League baseball and in other places.
Todd: So [00:09:00] yeah, maybe I should describe the product right of Crowd Zone.
So Crowd Zone was this idea that you didn't necessarily have to be friends with the people that were around you, but when you're in the same place at the same time, you probably have a common interest or have common needs. And where could this go? Kind of these, uh, temporal, physical location, social network.

And people thought, wow. Okay. So we, and we had some interesting examples like when you get outta the Vegas airport, everybody is going to the exact same place yet taking a different, at the time taxi right now Uber. But like how inefficient is that? Right. So what we found was the best crowd zones were really in sports stadiums.

People had the same parking. They had to order food, they had to get rides home. There were a lot of kind of commonalities there. They had the same amount of downtime when the game wasn't going. And we thought, all right, let's, let's create a system where people can leverage each other and bring value to each other and, and the [00:10:00] experience of being in the crowd.

So Pete Karmanos owned the Carolina Hurricanes at the time. His son Jason was the president. And yeah, they embraced it. They said, Hey, come on in. And we were able to kind of set up Crowd Zone as this mo it was all. The Hurricanes could market to, you know, people at home differently than those watching in a sports bar, than watching in the stands.

And so there was like cheering for the team and you could kind of communicate and shout out about your team, but you could also order concessions. And that was the big component that the ER from Excel had brought. His name's me, no. Fantastic entrepreneur, just cerebral, tactical, kind of high emotional intelligence.

This guy is unbelievable and had huge successes as an engineer and in management at other companies and has done extraordinarily well. So I was very fortunate to have this kind of talent. Behind me and all I had to do was, you know, [00:11:00] find the peak carus of the world to get the first door open. And then, yeah, we were in minor league baseball stadiums and we're up on the scoreboards and people are downloading crowd zone and cheering for their team and ordering food.

It was really cool. The biggest challenge with the business was really infrastructure, right? Cuz there wasn't wifi at the time. Inside a lot of these stadium. That's why baseball tended to work during summer, just cuz it was outdoors. But hockey was tough. I know we worked a little bit with the New England Patriots trying to bring it to one set of boxes for like premium seating.

And at the same time I was trying to drive partnerships with big kind of sports brands, CBS Sports and espn. And we were going down this path with ESPN where they were gonna, eventually the plan was to integrate it with the ESPN mobile. And we weren't sure exactly where it was gonna go, but we're at the senior VP level and we were kind of outlining what the long term strategy would be.

And that person, John Zer, who you know, was [00:12:00] unbelievable, took us in at espn. We're walking around in Bristol, Connecticut in, in the headquarters, and he's introducing to us, to a lot of people, John had a car accident, right. And could not work again. And so he was really the champion. He was brought in to figure out, For ESPN at the time, and we were gonna be part of that solution.
So we were thinking, okay, there's gonna be a strategic partnership and potentially acquisition and you know, really tough, very tough situation for John and his family. So it felt really bad at the time for him. We ended up saying, okay, like we'll turn to cbs. And it was CBS Sports that was interested, not at kind of the same degree, but they saw real value in it for their 13 radio stations across the country where people could cheer, whether they're in a stadium or not.

And they would see the real time kind of cheering what people were interested in and they could react live on the radio. And so, um, you know, they asked to essentially buy that product. They said, what would you do if we were to do this? And we said, okay, let's call it [00:13:00] CBS Shout Sports and we'll, you know, brand it for you and we'll build it out.

So essentially they ended up, um, buying. They bought Crowd Zone. Um, and it was not, not another, you know, it was not a walk off home run. Again, we're talking about another single, um, return capital to Excel partners and, um, was like, wow, this was an incredible experience. That was another very close to being big with, um, with the ESPN.

But also, you know, the physical infrastructure in sports stadiums made this pretty tough to execute on when you were in a stadium.

Brian: I'm just struck with the timing of it, because now you go to a stadium. Yeah. Five to 10 years ago, you know, we'd all be sitting in that indoor stadium not being able to get a signal.

Right. Not being able to call home or get a text out. Now you go to virtually any stadium and wifi is either included or it's, it's part of some premium package and the idea of like mobile ordering to your. Pre-ordering to a specific location is just kind of a defacto must have as a stadium. [00:14:00] Just, you know, in some ways it's just infrastructure and timing, right?

Todd: Yeah. It's, and it wasn't only wifi for us at the time, there wasn't really, well, square was starting and PayPal was moving this direction, but all the point of sale systems where somebody would take your credit card and put in the order were closed boxes by micros or. Ncr, I can't remember the names. And so when we integrated, we had to bring physical equipment, even receipt printers, and connect into these black boxes.

There was no, there were no APIs to connect into. So it wasn't just getting connectivity, you know, to, to the internet. It was connectivity into the, their point of sale systems. And the miosis of the world had no incentive to open up, um, to us. And, you know, that's why we have a new set. Payment solutions, physical and otherwise.

But yeah, it was, it was an interesting idea. I don't think that physical infrastructure was the reason. It didn't really take [00:15:00] off. I think Twitter, frankly was, um, an easier solution to implement. I remember we were with the New York Jets and that was the question that came up. Like, we really like this in engaging the crowd and presenting our own brand, but can't we just tweet.

Under our handle and have people follow that and tweet back. And I think that, that, yes, we, we could bring, we thought we could bring more content and more experience to it, um, but it wasn't like a big enough difference. And ultimately, I think the Jets were in the middle of deciding do we partner with Crowd Zone or Twitter?

And it was for them an easy decision to go with Twitter.

Brian: Well, still an amazing story, right? To add to the Rolodex of stories. So you sell to CBS Sports, do you stay with the business?
Todd: No, CBS really went with it. They took it themselves. I think they ended up, well. I know they ended up shutting it down at some point.

My partner, Meash, he took some of the technology from that we developed in [00:16:00] the point of sale system integration and really built out something different that, um, you know, I think just far above my head, . And I said, you know what? I think I'm gonna, you know, find my next thing right. And so, you know, hitting singles along the way right, is, it's encouraging.

It's, I never saw entrepreneurship as stepping up, hitting the Grand Slam and then never working again. I always saw it as a career path and something that I love this kind of idea creation, product market, fit unit, economics, and then growth. Something you know, quite a bit about, um, in, in real scale of a business.

So for me, I think it, it came back to Michigan again, right? So I got this invitation to be on a panel at Michigan, a big entrepreneurial event. Once a year they do it, and Brad Keywell was the main speaker, the headliner. And so I reached out to Brad and I said, Hey, we're both gonna be there at the same time.
I had met him when I was in school, school kind of really. Michigan really opened up that door. Um, I like to [00:17:00] say like rolled out the blue carpet for me to meet everybody who's who. And, uh, Brad Keywells, one of those guys. And I said, Hey, do you wanna grab a coffee? And he said, sure. And, and I told him, look, I just sold this, this company, right?

And um, I'm kind of thinking of my next move. What are you doing? And he's like, Hey, I've got this company. We think there's something really behind it, but it needs somebody at the helm. Will you come and take the CEO role? We'll give you a bunch of equity. You tell us, you, you kind of redesign the business and tell us how much capital it needs and, and we'll run with.
You know, I thought about it for a while. I went over, I met his partner, Eric Lapovsky, and said, all right, I'm gonna do this. So the job is in New York, that's where the company is, and I'm living in San Francisco with my fiance at the time. But ultimately, the investors want this company to be headquartered back in Chicago.

So I commute for seven months from San Francisco to New York, learning the business, creating the new plan, and I'm [00:18:00] flying out on Sunday at 1:00 PM to land in New York that night, and then flying back to San Francisco on Friday around four o'clock to spend the weekend with my fiance. And in the meantime, In New York, we'd run outta points to stay at any reasonable hotel.

So now I'm staying at the Y M C A and we did that, or I did that for about six months. And the room is no bigger than six by 10 and you share a bathroom with everyone on your floor, but it was, you gotta do anything and everything to make it work. So eventually we came up with a plan, we got a little bit more money, and that plan really required some serious technical expertise.

And to that point, butterfly was outsourcing their technical. So I bought a company and the founder of that company became my co-founder. His name's Chris Peterson, fantastic guy and just brilliant product person. And had a technical team that was, you know, second to none. This was gonna allow us to build a product that we [00:19:00] really needed to build in order to be successful.

So Chris and I took that upon ourselves and we built the second version of, but. And within nine months we built this new system and we started seeing success. We started taking instructors and filling them up with classes and you could see like acquiring the customer was X and we were gonna make, you know, X times two if they had seven lessons and we were gonna make this work.

And. Along came an opportunity where a company called Take Lessons on the West Coast. They were doing all this kind of manually and locally, and they were looking for, Hey, do we, is there a remote solution out there? And we seemed like a good fit. So, um, You know, I brokered that deal with, um, the ceo, Stephen Cox, who has also been on our episode.

And Light Bank pretty much took that whole kind of m and a experience over because they were gonna invest and take lessons as well. And [00:20:00] then ultimately a couple years later, take lessons sold to Microsoft. So they did not need me at that point. It was really just the technology and they had, you know, a much bigger team, much better financed, and you know, Steven took it to kind of the next.

Brian: That's, uh, we've heard his story, as you said a few weeks ago. Quite an amazing one and, and interesting how it all kind of collides. All these different stories kind of come together into a cohesive story. Okay, so better fly and then you come full circle back to spirit shop.

Todd: Yeah. So I guess I knew that business was being sold, right?

And there was gonna be this outcome. And again, I'm gonna be back on the street looking for my next. And I had just kind of randomly got this call from an organization was like, there wasn't a collegiate licensing group, but it was a competitor. They wanted to bring licensing like we have in the college market, right?

You can't just print a Michigan sweatshirt and sell it. You have to have a license to do that. There was nothing like that in high school, right? And [00:21:00] largely high schools don't even control their brand very well. They're using pro teams brands a lot of times. And so there was this idea that, hey, let's really clean that.

High schools can take advantage of their brand and make money off of their brand. And they called me saying, Hey, that spirit shot thing was big. You know, they thought it was a lot bigger than it was, and would you be the vendor that creates every product again for all these schools under this license?
And I was like, okay. That is an enormous competitive advantage. . And so I called, uh, Dan Gilbert and I had met Dan Gilbert at, well, I was, well we were at Michigan. He came to speak and I think that room was 400 people. Everyone wanted to hear him. Right. And I'll divert a little bit in that. Dan gave his speech.

I don't remember what it was about, but I remember at the end he said, I want three entrepreneurs to come running up on this stage or come up on this stage and pitch a business. Right. I say running because I was in the back of, because you were running. I was sprinting [00:22:00] to get to that stage thinking that I was gonna have to climb over our classmates.

I didn't realize you were guy fast. Yeah. and I, you know, stumble my. Thinking like I'm diving for a goal line and nobody else came up. I was the only. And Gilbert was like, come on, people. Like, you gotta, it's gotta be some other entrepreneurs out there. And uh, and eventually a couple people walked up and you had to pitch a business and people would clap and you know, who would win.

And it was unfair, right? Cuz I've been doing this a business plan competitions, right? So I was, you know, proficient and again, somebody who, it was thinking of an idea on the spot. There was like no competition. So I win. and he turns to me and says, gives me a signed LeBron James Jersey. Oh my gosh. Right?

And he's like, and here's my business card and you call me when you need me. And so, you know, I kept the card and many years go by and then I'm like, okay, Dan Gilbert's the one to call on this. And [00:23:00] I call him and I'm like, we can build the fanatics, which is, you know, the big licensing and e-commerce company for pro sports, college sports.

It's expanded into a lot of things, but at the time, Relegated to that. And I said, we can build the fanatics of high school sports. We're gonna get every consumer before they have an allegiance to college. This is gonna be big. And he's like, okay, I'll give you the money that you need. You gotta move to Detroit.
And I was like, okay, you know, I wanna be back in Michigan. Let's you know, let's do this. So my wife and I, we've now moved from Silicon Valley to Chicago for a little while doing butterfly. Even though Butterfly was in New York. I moved it to Chicago. There two years and then moved back to Detroit, and I think that was 2013.

Brian: And then what does that run look like? You get Dan Gilbert on board.

Todd: Yeah. And Dan's venture firm at the time, or family office at the time. I guess it was really a venture firm started by Josh Linkner, frankly, who we, who we've also had. Mm-hmm. on the podcast. And I've said many times, right, when you're raising [00:24:00] money, right, there's money and then there is opportunity, other benefits that come along with the people that are investing in you.
And, and Josh was just, uh, an incredible advocate, a thinker, somebody that could make me better. And, um, so getting the money and the Josh Linkner on the board was. A big benefit to me. So we, because I had done spirit shop before, I kind of knew the things to, to skip. Um, I built some technology ahead of time before meeting out there.

Um, and you know, I had a CTO in Chicago and it was really kind of, you know, temporary and, um, but we built the business. We got everything up and running, we had all the licensing, and it just went from kind of zero to something really, really quickly, which was. So we're making money, and I would say two years in the board came to us and said, Hey, look, you know, you guys are making money.
We should [00:25:00] explore if there is an opportunity to sell the business. I think it's interesting, right? Who, who you take money with, who you partner with, right? That is gonna be someone and a group that has real influence over the decisions in, in your business. So we said, all right, yep. This, the board says, we gotta take a look, let's take a look.

And really quickly, we had two companies were like, yep, we'll buy you. We'll buy you. And, and the board was really for, Hey, let's create a liquidity event. Let's put some money in the till. And you know, at the. I wasn't a hundred percent sure this was the right decision, but what I ended up doing is really saying, okay, how much more capital do we need to grow to that next level and how much dilution does every investor that you know?

We've used to this point, really, Detroit Venture partners and Light Bank was an investor as well. What kind of dilution are, are they gonna take? What kind of dilution am I gonna take and what's the next hurdle? And so those are hard things to predict and model, [00:26:00] but we decided, no, the numbers today are good enough.

So we ended up selling the business in 2015. And so, you know, really good outcome for the people that were involved. And for me, I really thought again, okay, you know, I'm out on the street again. What is, what is the next. I've put some money in my pocket now hitting, let's call it four singles, maybe.
You know, there's a double in there. And so I've got some time to think about what is the next, the next thing, and I get a call. From a light bank portfolio company, and it's like, Hey, this one's gonna struggle again. And Light Bank says, do you want to take the CEO role? And I'm like, no. Right. And I said that because at that point I figured I'm not a great operator, right?

I'm just hitting these singles and. Working with venture capital is not about hitting singles, right? It's not [00:27:00] just about, Hey, I gotta live to the next day. It's about hitting grand slams. That is the model. And I really wasn't fitting that model, so I was like, I'm not gonna take you to the promise land.
You should sell the business. And they said essentially, We don't know how and the, and the owner doesn't know how to do that. And I said, well then let me help. And so this was the first time, now that you know, I'm just gonna go help a friend, I've got time. And I knew the CEO really well, Jay Cook. And, and I also knew, you know, like not only, I'm like, I didn't think of myself as a great operator, but she's fantastic, right?

She's. With two companies that have gone public at this point, and she is now, she's got a valuable company that's kind of teetering on success and they don't quite know what to do with it. , um, the investors don't really wanna put more money into it. Jayna is thinking about her own, you know, roi, same situation a lot of founders find themselves in.

And, uh, and she said like, can you help? So, um, it took about three and a half months, but [00:28:00] I structured, uh, you know, a full buyout by private equity group, um, Vista Equity Partners, and they bought the business. And everybody's kind of looking around like, how did that happen? And the number was exciting. Um, you know, Jayna thought she wasn't gonna end up with anything and she ended up very happy in that situation.

And the light bulb started to go on. Maybe it was flickering, like, wait a second. I've sold my businesses. I've figured that out. I think maybe I can help my fellow founder. So I decided like, all right, I'm gonna hang this shingle. And the word gets out that, that I've done this, whether it's through light bank and venture, two other venture firms call and say, Hey, we got a, we got a problem, we have a situation.
Can you help us? And I don't wanna say the businesses are problems, right? It's just we need to evaluate whether m and a an exit is the right thing. And so I started taking on these assignments, not being an investment banker. Um, Not knowing too much. [00:29:00] What I was doing is one of those ideas, like I know 3% more, so I'm the expert in the room.

Brian: Well to be fair, you, you knew what you were doing. You're helping to align, you know, and this is a theme of where we're at today, right? You're starting to align the experts to support that transaction, right? Yes. So I think, you know, you're not giving yourself enough credit going. At this point now, four plus creations and exits.

Yeah. You know, many of the pitfalls and the successes and kind of what makes the difference between those two.

Todd: Yes, I am starting to learn that, and that's why I say the kind of the light bulb flickers. And so, you know, as you know, um, because you and I are staying close and I'm asking for, you know, friendly advice along the way to lots of my friends, and you're around and we're doing some golf trips and so you're aware of, of what I'm thinking.

And at this point I don't have a whole lot of confidence in what I'm gonna do, but it's. I was previously successful enough to [00:30:00] have bought myself some time. Right? And that's really valuable as an entrepreneur.
Brian: And if I can interject as well, cuz you don't always give yourself the credit that you deserve.
I think for this journey, I think part of that superpower and kind of where you exist today. Is because you've spent so much of your life supporting and helping others, right? Without necessarily asking for, for things in return. But whether you planned on that or the real reason is it's your authentic place in this world is you've helped people now for over 20 years through all these different aspects of their personal life and their professional life.

Quite honestly, I think it's part of the reason that I'm doing this. Is that you authentically ask people how you can help before you expect anything in return, and I think that's amazing and you should accept more of that credit than you take. But my point on that is that because you have done that for so long, your network is such that you can call on the Dan Gilberts of the world as needed because you have done so many things for so many people and that enables you [00:31:00] to really spread your wings when an opportunity is in front of you to go tap the right people on the shoulder to support the best in various in.

Your experience, whether you've built or sold a business in that, in that industry, and your ability to find those people or have already supported those people, that they're gonna dive in to assist. So I think that makes you uniquely positioned more than most. And I know you wouldn't say that yourself, so I feel like you need to, need to interject.

Todd: Well I appreciate you saying that. I think, you know, Josh Linkner and one of our walks around Detroit, where he'd try to get me out of, Inner workings of the business and think more creatively and more broadly said to me like, what do you think your superpower is? And I was like, I, I don't know. Right?

And I had to go back and think about it and I realized that it was my network, right? And I think I naturally built my network because I was never gonna be the absolute expert. There was always gonna be somebody better than I am at some given task. And why not surround myself with the best people that I.[00:32:00]

You know, go at it. It's like a team, right? I was the goalie when I played. I'm not gonna score goals, right? You want to be with the best defensemen, the best forwards in order to put the best team on the field, and you do your part and you do it as well as you can. So I really saw that as my superpower. I would say that in, in giving back, the self-serving part of that is as an entrepreneur, it's very hard to know am I being successful?

Am I getting better on a day to day basis? And when I talk to, you know, a young founder and I get to say, oh my gosh, he can use that experience that I had, that where I really messed it up to not have him mess it up or something that worked that I could. And so that's incredibly rewarding and part of being an entrepreneur for me is making sure that the next generation of entrepreneurs benefit from the experiences that we've had.

Yeah, so anyway, thank you for saying that.
Brian: So you're now midstream at [00:33:00] APG, the word starting to get out. You're supporting ex-colleagues, friends, connections through this process, whether it's informally kind of supporting their thought process and pointing them right direction or starting to formalize what that relationship or what that actually should be, or, or, uh, contractually aligning the experts for the sale.
Todd: Yeah, let me step back. After I sold event up for Jayna and I said, all right, there's something here. I grabbed this URL, acquisition Partners group, which you called apg, and you know it was 12 bucks. I had my youngest brother build our website in a day and a half, and well we ended up doing is attracting founders of businesses and I thought like, okay, I'm more of like a tech VC backed, that was my world, but I. Aerospace, you know, precision parts manufacturing, automotive, prototyping, uh, uh, interior millwork, uh, and then there's a lot of tech, right? Prop tech, health tech, [00:34:00] FinTech, hr, tech, and all of these founders are coming to me and what I'm realizing is, and, and you know, I'm, the first thing outta my mouth is I have no idea what, what your business or industry is about.

But what I do know is there is somebody in the world that all is talking to your buyer today. It's somebody that is so immersed in your world, your business, your industry. They know your business and the value of it and how it will sell better than you do, and certainly better than I. Would you let me hunt and build that team of people m and a, experts around you?

And every founder would say, of course I will. Cuz I would say, and it's free. Yeah. Right. So what was also happening at the time and and C even advanced this, was this idea that you don't have to go down the street and knock on the door of the local middle market investment. It's not a local service to hire.
[00:35:00] This is an expertise that you want, an industry expertise, and so, We started bringing the best in the world to these entrepreneurs that never would've had that kind of exit. And I say, yes, my network of being able to reach out and communicate with people and people referring me in, got me to these experts around the world much faster, I think, than somebody else would've been able to do it.
But ultimately, I'm not the one doing the work. So, you know, on those first handful where I called it really more of an experi, Are experts. One guy crushed it from Los Angeles, sold a business in Michigan from la. Another guy in London sold another business in Michigan from London. Right. And his team was remote.

A team in Greece and in Germany. We had another one in Portland where the company itself was the first company outside of Michigan, was actually in California and New York. And we're like, wow. Now you can work with founders anywhere in the world and bring the best experts [00:36:00] from anywhere around the world to create.

Optimal outcomes because these experts know who's gonna buy you. They know the structures that they want, they know the valuations that they pay. They know the inner workings of these buyers and put you at at the advantage in that negotiation and it worked. Right? And I'm thinking like, I need help. I need to go from product market fit, which I've been really good at, and unit economics, getting that right, right.

There's easily a way to make money. These investment bankers are making a very, very good living and so being able to help them and, and taking a piece of that pie, that was kind of a no brainer. I wasn't worried there, but it was like, how do you take this concept and help as many founders. As you can, and I knew as a service we could do this.

I could do this on my own and make a nice living and help four or five people a year, or we can figure out how do we really scale this. And, uh, fortunately, one of my buddies [00:37:00] has built an amazing company and has found himself available, and I'm begging for you to join me. And you had run m and. You had figured out how to found a business product, market fit, unit economics, and enormous scale, and a big piece of what I've never been able to do.

So very thankful to have you on this journey with me, and you know how much fun we have and part of it is like we know how much of value we're bringing, like how excited we are to talk to these founders and give them something that they, they'll just never get. They're never gonna find this without us.

Brian: It's awesome. Yeah, it's, uh, I, I joke with my wife. In my previous roles, uh, building businesses, I had a hard time describing what it was that I did. Right. My kids would kind of stare at me blank faced, and they'd know that I was on an airplane or a, you know, in hotel rooms all the time. But I couldn't really accurately describe what my job was.

And now I feel like I'm a bit on, uh, shark Tank, which is easier for them to kind of consume, of just being able to speak to founders, you know, different [00:38:00] animal. But speaking to founder. About their businesses, many of which are in industries that yeah. We've, we've never ourselves worked in yet. Knowing the mathematical equation to get them to exit when they're ready.

It's such a great mission. Right. And it's so enjoyable to find them success when they get to the other side and oftentimes life changing event, right? Monetarily for themselves, their family, and, and generations. And it's been a fun ride so far.
Todd: Yeah. There's a lot of commonality right in, in all of the events, all the exits.
It's new every time to every founder for the most part. And so being able to like draw on those lessons, right, and share that knowledge kind of universally is making our fellow founders smarter about m and a. But then there's always something new that pops up, right? And as we collect that database of knowledge and experience and continue to.

Our process gets better. Our experts are armed even more. Our founders are armed even more. [00:39:00] It's really exciting to see where this is gonna go. Yeah.

Brian: My athletic career was not nearly as prodigious as yours. I did not try out for the Olympics. Uh, nor did I play a minor league sport. But we both kind of connect on that athletic experience growing up.
Right. And we talk a lot about building the dream team, right? And talking about how m and a is a team. Oftentimes, I've been through this. You certainly have been through it many, many times. As you get on a path of m and a, if it's your first time, you really don't know who to talk to, you don't know where to go get the best information.

You know, it's supposed to be this confidential process in which you don't want to present to the world that you're for sale. But you also want and feel like you need better information about that process. And when you put the right people in the room to support a founder, it aligns that idea of, of having a dream team around you, around the founder to support what that process is going to be.

And yeah. Uh, I think, you know, every day we get a little bit better, but have seen, you know, such success with, with so many of the, the teams that

Todd: we're working with, you know, the, just hearing you say, To me, this is not a foreign concept to great [00:40:00] business owners and founders, right? When you're building your team to build your business, you're surrounding yourself with the best possible people, right?

To grow that business, to find success. And so it should be very, very logical that when you go to sell your business, nobody has really done that on your team yet. You might have a CFO that has been through an m and a process, and those employees are incredibly helpful during that process. But when you leave it to professionals who know a process, Then you leave it to industry experts who know the buyers and know how the buyers transact.

It's like you said, we build the dream team around M&A for these founders, and when the light bulb goes on and they see what happens, it's like, wow, this is a no brainer.

Brian: Well, it has really been my pleasure to help you tell your story today. Every time I hear you, uh, you go through kind of those experiences.

I feel like I learned something new. So, you know, I hope that our listeners enjoy it as much as, as I did today. Thank you. And, um, we're excited for our next series of [00:41:00] guests that we'll have over the next few weeks. Yeah. And we'll talk to you next time. Sounds good. Thanks, Brian.

Todd: All right, thank you. Thanks again for listening to the Cashing Out podcast.
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