The Wise Exit

Cashing Out Podcast | Episode 14 | Selling Two Automotive Digital Marketing Platforms to Cars.com | Joe Chura

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. Today we have a special guest and good friend of exit wise, Joe Chura.

Joe has had an incredible entrepreneurial journey starting on the Ford Motor Company assembly line to founding two automotive digital marketing platforms, which he sold to cars.com in 2018 for a walk off home run outcome. Joe is an exceptional leader, marketer and lifelong learner who has taken on many different challenges well beyond the businesses he's most widely known for.

He's recently run a marathon. He has an incredible podcast called, not Almost There, and he recently launched a new non-alcoholic brewery Go Brewing in Illinois. I hope you enjoy our conversation with Joe Chura.

Brian: Well, [00:01:00] Joe, thank you so much for being with us today on the Cashing Out podcast. I am personally so excited to have you on.

We've known each other for a long time. Your story of kind of what you created two businesses to then go on to sell has been, you know, really an automotive industry pinnacle of kind of exit and m and a and I'm really excited to get into the story. It's not a ton of the details that I even knew, you know, as we think about what you went through and for our listeners, I think a lot of really good insights and information and and storytelling for us.

So thank you so much for being on.

Joe: Yeah, thanks for having me. I'm truly lucky, and it was an incredible experience and excited to get into it today.

Brian: It's awesome. So we, we like to really start with how we met each other, how our personal stories began, and I, and I really have two distinct memories. The first, I think it was the 2015 NADA, so an automotive dealer association meeting in San Francisco.

You guys definitely had a big booth at this convention, but you were kind of in a tough spot. You were like top floor back corner. I, I definitely had to seek you [00:02:00] out, but I think Bruce was the first guy that I ran into and then he, he went and grabbed you and we had that kind of initial conversation about potentially partnering between your business and, and where I was at.

And it led to what ultimately that partnership became, which I think is one of the most successful in the industry. But my second was shortly thereafter, we had, I think, signed our first deal together. I came to visit, we were gonna spend 36 hours talking about a lot of different deal points and where we could take this thing together.

And you just happened to have an all company meeting that day and you said, Hey, why, why don't you just stand in the back and, you know, take it all in, you know, really give you a sense of the. Then like maybe 15 minutes in, you said, and I've got Brian Dukes here. He's gonna come up and, you know, educate everyone on what Shift digital does and, and the industry and how we're gonna, you know, go to market together and all these great things we're gonna do.

And all jokes aside, I don't think I did a great job of representing what you were hoping I was gonna say, but more importantly, and I think we'll get into this later, it did open my eyes to the culture that you had built at Dealer Inspire and Launch [00:03:00] and I think changed my perspective of this wasn't just a technology company solving a problem.

This was a brand that every employee from you all the way to a person that you had hired a day ago really believed in the mission that you were taking on. And it really changed my perspective of who you were as a person and a leader and certainly, uh, interested in, in getting into that.

Joe: Well, yeah, thanks so much for that.

And I, I do recall that and it just, Goes to show you like when you walk into those doors during, uh, a day when we have a meeting, be careful . Cause uh, there was a lot of people that I brought in, I thrusted in into that position. But, uh, I do remember you doing very well and I think I may maybe it gave you 30 minutes heads up right before we, uh, maybe, maybe started that you were gonna be on the spot.
But yeah, it was, it was a lot of fun and I think, you know, to demonstrate culture is so much easier than just talking about it, right? To really live it. And around our offices we had skateboards and we had all this stuff and that's just not to be [00:04:00] cool. Like I wrote a skateboard and you know, you have to have part of you in the culture that's really authentic.

Otherwise it shows as you trying to be something you're not. So, I'm, I'm, uh, really excited you, you got to partake in that day and, and see a glimpse.

Todd: You know, Joe, we're obviously just kind of getting to know each other, but I've heard a lot of the stories from Brian and I think one of the things that I like our listeners to hear is that, you know, not only have you had success as a, as an entrepreneur, but then you've gone out and started another company.
And I like to talk about that entrepreneurial journey. Whereas at exit wise, we're really helping you with the end of that journey, right? The exit part. Mm-hmm. . But to celebrate the entrepreneur who just has it in their blood and whether they have the Grand Slam exit or not, they're going out and starting the next company.

So what we have today on our desks, thanks to you is fantastic. Is a non-alcoholic beer. This is perfect for me cuz I'm not a drinker and [00:05:00] I know the idea of walking into the bar and, and holding the water and being able to taste something that actually tastes. Is great. So I think, uh, Brian and I are gonna crack 'em open and enjoy while we have this conversation.
Here we go.

Joe: I'm gonna join you guys and crack open one here. I happen to be at the brewery today. Maybe
Todd: Maybe we can, uh, get into it at the end. Definitely wanna hear more about it, but I don't want distract, you know, from the, from the story that you're gonna tell.

Joe: Yeah, I would love to love to talk about it cuz it's just, it's an eye opener.
Like after you sell a company, you, you think you're gonna be met with all these different emotions and feel great, like you're satisfied and then you quickly realize there's just so much more to life, um, than in, than an exit. So yeah, I'm happy to dive into that later. Yeah.

Brian: Let's put a pin in that for a few minutes and go all the way back.
And I've heard you tell a lot of kind of the early story of kind of who you are, where you came from, how you eventually came to create launch and, and dealer inspire, but would love for folks that don't know you, to to hear some of those early stories that get us to that [00:06:00] point of, you know, the, what you eventually created and that exit.

Joe: Sure. So I think really quickly, um, I have to back up into how I got into automotive in the first place cuz it was like this happy accident. And it started off with me working on the assembly line at Ford Motor Company, uh, when I was 20 years old. And the reason why I did that, I thought I was gonna be a father at 19, couldn't even take care of myself in life at that point.

Um, was a bit aimless, uh, but I just knew that once I was gonna be a dad, I needed benefits. So a bunch of friends, um, my girlfriend's parents actually worked at the Ford plant, knew that they had good benefits, uh, got a job there and there's all kinds of stories around that. But got it, got a job there and worked on the assembly line in the return department, the 1998 Ford Taurus is what we were building.
So I was put on seat belts, skull, plates, feet, pillars, all that stuff. And I quickly realized that, um, I didn't wanna do that forever. So I had a few options. One, I could find another job, which at that time, not very marketable in my early twenties. Or I [00:07:00] could go. School, which Ford was nice enough to pay for a lot of my, uh, education.

So I would work on the assembly line, um, and in between building cars, read my, uh, read a paragraph at a time. And, uh, it took me five years at that pace to studying up to graduate college. Um, and then worked my way up forward to the marketing sales division where I called on dealers. This is early two thousands now, and it was the time when the internet was just taken off.
So part of my job was the wholesale of vehicles, be a consultant. Uh, I was the Ford rep to many dealers. And, uh, and also, uh, serendipitously was like to convince them the internet wasn't gonna be a fad. So I helped them with lead pipelines and like understanding these customers online that aren't in person.

Like who are they? And you gotta think back then it was just like this foreign concept that you had to, you had to prove to them, no, these are real people. Like, they're just on their computers and they're, and they're typing information and they want, they want more, [00:08:00] uh, More information about this vehicle that you wanna sell 'em.

So, uh, so I did that for, uh, 10 years total was at Ford. Had the opportunity to leave to be a general manager at a, at a car dealership. Um, I did that in 2008 and really that was just, uh, that was around the time I met, who now my wife and, uh, needed the potential for more income and just needed a bigger opportunity.

At the time Ford was going through a lot and I found out later that there was other domestics filing bankruptcy, um, that it was a tough time in the automotive space. But for me personally, I needed more. That's why I left to be a car dealer.

And it was, uh, an absolutely tough job. I learned a ton about running a business and have nothing but respect for car dealers out there and, and how tough that can be. Um, Through that processI really started to understand the [00:09:00] power of, of digital marketing. So I, I worked for a different car dealer in 2010 and helped him build his internet department and increased his sales by nearly 300% online.

And I was like, I could do this for other dealers as well. So decided to start a company called Launch Digital Marketing, which was a digital advertising agency. Um, I should say that when I was a younger kid, I was into computers, I was programming the Commodore 64 and I started to really love and understand seo, search engine optimization and how to code and get businesses that show up in search.

So I would spend all my free time doing that and, uh, this is around 2010 and I started to get pretty good at it. So everything kind of converged, took my knowledge of automotive, took my knowledge of being a car dealer for those couple years and created this, this agency. Um, ran that for, uh, for a couple years.
It was growing really quickly, but what I found is that, um, [00:10:00] to be a viable agency, I needed to control the websites, the dealer's website. So, um, we were sending all this traffic, but we didn't control it. After it, it went there. There was no analytics, there was no tagging, none of that stuff.
So, to be a real company and to be a viable agency, we need to take control. So decided at that time, which we could get into to create another entity that was called Dealer Inspire. And this was 2013. And then, uh, fast forward five years later, both companies are are growing and, uh, dealer Inspire.
Um, went from three employees to several hundred, um, and by 2018 sold both businesses to cars.com. It's

Brian: an incredible story from the beginnings to, you know, where you exited. I guess one of the questions I have is when you're working at the dealership, at what point are you kind of thinking to yourself like, I could [00:11:00] not just, am I good at this or do I have a point of view of this, but I'm actually gonna go and create a company?

There's a lot of people, and this is the distinguishing factor of entrepreneurs, right? A lot of people say, okay, I understand this topic. I have a perspective on like, oh, you know, I could go do that for other people, but I think very few do. So talk to me about kind of your mental makeup at that point.
Joe: At that point in time, a few opportunities, had, came, come to fruition and one of those was, uh, another vendor in this space.

I was helping them, uh, with ideas on, on their technology stack in the automotive space. And a person that worked for that company also had the entrepreneur bug, and then him and I would get to talking. Then we met another individual, how many partnerships or formed that had a decent client base. And it was just like the perfect time for things to kind of converge and, and to create a separate entity.

And because we had the knowledge [00:12:00] of my, who became my business partner in the vendor space, we had my knowledge in terms of the digital marketing, the business knowledge. And then we had, we had a, um, an advertising agency owner that had a client baseas one of the partners we knew we had runway at least to get a product off the ground, um, have a client base.

So all those things kind of made sense. It wasn't like, it was just like, uh, I had an idea, I'm just going to, I'm gonna start, uh, going off on, on my own. So we had the right kind of foundation to, to do something, but really one of, one of the catalysts where one of the, uh, one of the clients, um, Matt had, which was my, uh, business partner, he had been offered to go out there and do a consulting deal on search engine optimization in Colorado.

And Matt knew a bit about search engine optimization, but not enough to do a [00:13:00] consulting gig. So he basically said, why don't you go out with me and do this? Well, we do this thing for two days. And I didn't even know I had that much knowledge, but the dealership looked at us at the end and said, we can't do this on our own.

What are your packages? And we looked at each other and we were just like, uh, we'll we'll get back to you later today. And then on the plane we came up with a good, better, best package. And that was kind of the start of it. So I guess the, the long story short is you look at, to make sure you have the right ingredients, which in this case was a team, and then you have the right opportunity.

Um, and that was this dealer asking us for these packages. And that was, that was a catalyst for everything.

Todd: I love the beginning of that, that you're really starting with a customer in hand, right? So they've told you what they need and you're building exactly what that customer wants. You're gonna keep them for a long period of time, and then you start extending that.

I love the beginnings of entrepreneurial endeavors that start with a customer in hand, but you're still taking [00:14:00] risk, right? So what's the financial situation? Do you have income coming in from the dealership job or are you doing this at night or is it, Hey, burn the boats? We're going.

Joe: it's a great question.

So is more of, um, doing it at night, um, still have a job. my partner still had had a job as well. So we both, kept our jobs for, I kept mine through 2010, I think. he stopped his midway through two, midway through 2010. And, uh, I was very transparent, which. At the, the place I was, uh, I was at, you know, what I was doing.

But I would go home and have a fully charged computer and put the kids to bed and deal with all the home stuff. And then my wife would fall asleep and I would work until my computer died. And I did it every single night. And newer computers, they last longer, so I'd be up until, you know, midnight, one o'clock.

[00:15:00] And, uhI just did that for, you know, really that entire year to, to build the, the, uh, business. And, and it was phenomenal. Like, I didn't even think about it as work. Um, and I was learning as I was going in this newindustry, I found myself in by listening to podcasts like yours by, by putting on headphones when I was doing things around the house, to listen to, like SEO 101 and all these, all these, all this content that was emerging at this time to just, one, make sure that I was new, the latest trends I was, I was, uh, having these packages and.

And offerings for our clients that, that were the best possible, uh, for them. And I was just, was completely emerged in this space and, and truly loved it. So it was like time didn't even matter. Um, so it wasn't a chore, it was just a lot of fun. Um, so it was less of a risk than I thought because I gradually emerged out of that full time role that I was at, [00:16:00] um, by, by doing what I loved.
And that dealership, it's funny cuz I, I went to that dealership in 2011 and I said, listen, you know, I'm doing this full time now. And they were like, we wanna still keep you onry to, to help us. So , I kind of had even two jobs going into 2011 just cuz they wanted to keep me on the books and, and help them.

Brian: Do you have investors beyond your partners at that point? How did that change over the years or kind of the transition from launch into Dealer Inspire?

Joe: Yeah, that's a good question and it's. Somewhat humorous, um, because the, in the investment, um, the way this was really structured was it was me and Matt who I had already brought up.
We were kind of the operation people and the, the doers, the third partner at launch owned a traditional advertising agency, and he was [00:17:00] the investor. So his investment was two computers and $5,000 , uh, for each of us to get through the first month until we have enough, uh, revenue coming in to kind of support thebusiness.

So that was literally the monetary investment. However, the real kind of investment, why at that time was a win-win was he had a book of business that was 60, 70 auto dealers deep, and an agency that needed to sell digital marketing services but didn't offer 'em. So that was, that was the reason why it made sense at the time.

Todd: But you were able to keep it separate. It wasn't tied to this agency. Correct.
Joe: Yeah. Correct. So, so essentially what what had happened is he wanted to hire, uh, Matthew initially to run this, this, uh, digital division. He didn't even know me at the time. And then Matthew approached me with [00:18:00] it, saying like, Hey, we should go work here.

And I said, I don't, I don't wanna work for anyone, like if we're gonna do this, like, let's do it on our own. So we went back and approached himand said, Hey, why don't we create a separate company outside of your traditional company, and we focus on, on, uh, digital marketing and we're, we're equal partners in it.

And that's what. So you jump

Brian: forward to the creation then of Dealer Inspire. So we talked about this before, right? The idea that you were generating traffic, but you weren't controlling the experience once that traffic landed on someone else's website, right? So you, you have this epiphany that I wanna create a website.
What was the thinking around creating a separate entity dealer Inspire? And again, similar question, kind of the investment or you know, was the team basically a replica of what you had done at Launch?

Joe: I would say it goes back to education from podcasts and from just learning about business. So at the time, or while [00:19:00] I was building Launch Digital Marketing, I learned a ton about structuring a company and um, and kind of the, the pains of, of growth and software and all of that.

And I did that a lot through various podcasts. So as I was educating myself in this, when the idea of an of a another kind of product emerged, I said, well, why, why don't I take this opportunity to, to have a separate entity, create a different, a different corporate structure for that, that entity to give myself the ability to have a different cap table that's more flexible.

And that's basically what happened. So when, when we came up with the idea to create Tour Inspire, um, there was another person involved who is kind the main callus behind it as well. So that automatically changed that cap table of, of the first company. And then I approached the other two people at launch, [00:20:00] um, with the idea.

We're gonna create this different, because I just learned a ton in, in those two years. So, um, so that's why it was created, um, as a separate entity. And I also knew. That if one day we ever sold the business, the valuation of that company, of the software company would be, uh, at a much higher multiple than the digital marketing agency.

And I wanted to separate those two things out and not, and not complete

Brian: em. Yep, that makes sense. So you are then on a rocket ship, right? At, at some point you realize that you're building something that is growing very rapidly. I don't know kind of the, the scale of the number of employees over those, call it five years or so.

Dealer Inspire was on that sprint, but you're truly on a rocket ship and you've talked about, you know, you were on some of those growth lists, right? And starting to get a lot of press around the brand that you're building, the technology you've built, the success you're having. Talk to me a little [00:21:00] bit about getting to that step in the process and then maybe we start touching into your thinking around inbound interest.

And maybe it may be time to think about this.

Joe: I would say that the idea behind Dealer Inspire, even though it's a separate entity and, and the idea of if we could sell it one point in the future, was really far secondary to the fact that like we just thought our client base was gonna be our digital marketing clients from launch and we just wanted to serve them and provide a better experience for them.

So we went into that with the idea that this company's really gonna propel launch digital marketing and give us a foundation and we'll just have the very similar client overlap. And because our technology was so different when we launched it, um, it to your point, it took off in a big way. But I do wanna say like in 2013, we had three [00:22:00] employees and I actually lost $300,000.

Um, so. One of the things that, that I realized quickly with building software is that I would need some capital. And I didn't wanna, I didn't want to look at the money or the revenue of coming in from Launch Digital marketing as a source of capital for Dealer Inspire. So I went to five potential investors, which were car dealers at the time, and I approached them with this idea of, do you wanna invest in this new entity called Dealer Inspire?

And, uh, all of them said no, except one dealer in Canada. And, uh, he invested $300,000, which was my projection that year of what we would need to get the company going. And actually that year we ended up losing, uh, we ended up essentially losing from a cashflow perspective, that same amount of money to get going, uh, which was just, just a weird twist [00:23:00] of fate.

So since 2013 was really this kind of pinnacle year of, of growth. Um, but from 2013 we were at, you know, like I said, negative $300,000. And in terms of ebitda, we had some revenue and we were ramping and things looked good.

But by 2017 we were the fastest number 37 fastest growing company in America. Dealer Inspire was, so to get back to your question, one of the things that I think we did right early on is we were. [00:24:00] Very, um, we were very much into like partnerships and doing the right things and trying to get in front of people as much as we could to expose the technology that we had built.

And we were, we were intentionally being very clear about what problems we were solving, and those were a better website, a better looking website, which was, which was kind of like in today's day and age, like duh, it's like ux, html, CSS code. At the time we were doing innovative things. HTML five, photos, video, like all of this stuff that was just different and made our sites look different.

But then on the back end, we were able to solve a really big problem and, and use what we call the true ROI dashboard, which would help a dealer understand the return on investment of their, of their marketing dollars. And it would do it on a PII level. So you would know Brian Dukes click the Google ad.
Went to the website, submitted a lead, and we can match up the sale and look at the girls' profit [00:25:00] made. And when we showed dealers that they were like, oh my God, for the first time someone's showing me how my marketing, how my marketing is, is working or not working. And, and that was because we were solving that problem.

We were very clear about it. And, and having had the background of being a dealer and my Ford experience, we just had a, we had a really, we started to build a really good brand and we weren't like focused on pennies. We were just focused on opportunities. We were focused on, on our clients and treating them well.

And, and it was less about let's, let's maximize our profitability and no, it's like, let's build a big client base that are followers and that love we.

Todd: What I'm hearing right, is not only you have best in class product, right, which is hard enough to do, but you've picked [00:27:00] up a business education sounds like through podcasting because you're picking out things that I guess I've learned over 30 years where you're talking about having a separate company to have a separate cap table, presumably to use equity to incentivize people differently or however you were gonna do it.

But you had that already, that conceptually in your head on top of it, understanding that one software business is gonna have higher multiples and potentially be worth more. So having that foresight is pretty incredible. And then going out and using. Customers as investors, right? I've seen a couple of startups doing that.

Enormously successful and they can control dilution a lot better it seems than kind of the traditional venture route or angel route that you see many entrepreneurs go. So this is impressive background, even just getting started.

Joe: Yeah. Yeah. Thank you. It's, and you know what's funny is, before I forget to say this later, the attorney that I used to help us set [00:28:00] up Dealer Inspire, actually advertise on the podcast, I listened to.

That's how I found him. I would try to explain to the local attorneys that I was using, which was at the time was like the, one of the partners, like brother-in-laws, you know? It was like one of those things. And I was like, no, I think we need to create a C corporation because there's these benefits for it.
And they're like, what are you talking about? Double taxation, all this stuff, right? And. and I was like, you know, I need a lawyer from like Silicon Valley that gets this. And that's how I found my attorney. Like, like literally was advertising on this podcast that I had listened to and that really helped me learn a lot about business.

Todd: I think what I love about that is when it [00:29:00] comes to m and a, we get a lot of clients that say, I have an attorney.

We say, yeah, but do you have an M&A attorney, somebody that specifically knows how to protect you really efficiently and get deals done and often? No. That is, it is a specialty and it's something that we always want to bring to the table because it generates just better outcomes for our clients. And the fact that you knew enough, I'm guessing having to do with maybe small business tax related to C Corp, there's huge benefits and not a lot of lawyers know about setting up a company correctly to have an enormous tax benefit in the end.

So, you know, kudos to, to going out and finding the specialists. Right. That set
Joe: you up correctly. Yeah, I highly recommend people, uh, don't take the first advice you get, do a lot of your own research. This is on you, right? This would've been on me, um, if I hadn't made that wrong decision.

Brian: So Joe, you're [00:30:00] on this rocket ship, you're growing fast.

At what point do you start getting I think, some inbound interest and start really thinking about m and a and selling the businesses, you know, where does that begin?

Joe: Yeah, so the first time that I could remember that we had interest was when we were ranked, um, like real, real interest. I had conversations with people, but the real interest was when we were featured on Cranes Fast, 50 some five, fastest growing company in Chicago.

And this, uh, wasn't even for Dealer Inspire, this was for Launch Digital Marketing. Cuz a lot of these lists that you're on, you have to be a company for five years or three years minimum. And you have to be able to show audited financials and all this stuff. And Deal Inspire was just too young to be on, on these lists.
Um, so Launch ended up on the Crain's Fast 50. Number five, fastest growing company. Companies [00:31:00] and people started to take note of that and all of a sudden that little bit of interest that you got before starts to, um, really get exponentially larger. And I just remember getting emails from 10 to 15 to 20 PE firms a week,

So the business was doing well enough to cash itself, but once we kind of changed [00:34:00] the structure of the business and the clientele shifting from more, um, from more, you know, SMB to enterprise, um, I needed to think about things differently and I never wanted to put the business at risk. And you hear this all the time, like you could have a growing business, but if you don't manage it right, like you could be out of business pretty quickly.

And it was, I, I felt like more stress coming on with regards to that. And they were all great problems to have. So I thought about this in two ways. One, do I raise money? Which at the time I didn't wanna do. Um, and I wanted to create these businesses without having sub substantial capital or investors, because dilution is expensive and equity is expensive.

Um, and it's often really sexy. But I never really fully understood it. Like I never understood why that was like in the headline so much, versus here's some entrepreneur grinding it out, figuring out how to cash flow itself that you'll never read in the [00:35:00] headlines. And, uh, for me it didn't matter though cuz I, I wanted to look at the cap table that I had, the partners that I had, and I knew the right thing was to protect ourself from dilution.

Therefore, at that time I, I couldn't even, like the line of credit I even had access to was like a million bucks. Like my, my employee expenses were over that in, in a, in a monthly basis. So that wouldn't have helped that much. Therefore I started to entertain the possibility of something else, like what can help me grow this business faster?

Um, after the Crain’s Fast 50, meeting, I met with a wealth management advisor who asked me how he can help me with our business. And my first answer was, you know, I think I might want to talk to an investment bank. I don't even know what they did really, to be honest with you. I even understood what investments banks did, but I knew that, like I heard that and I should [00:36:00] probably talk to someone that does something in investment banking.

Like that's how naive I was. And, and uh, he put me in touch with three different investment banks, which, uh, I think one got back from me fairly quickly. And, uh, met with them and we decided to do a little exercise to kind of see what the company was, was worth.

And, uh, gave them access to financials and all that stuff. And we went through a few month period where, um, they kind of ingested all this data and they, they came back to me and presented to me what, what our company was worth. Well, simultaneously, as all this was going on, um, cars.com had approached me and, uh, and saw and cranes, and realized we were in their kind of backyard, their, their, uh, Chicago base as well.

They [00:37:00] had just went public recently that they wanted to understand what, we did as a business. At the time, they were just like interviewing multiple companies in automotive. They were looking for, I think m and a opportunities to grow. and one thing led to another and the CEO ended up in our place of business and we spent an afternoon together and we hit it off.

but it was really kind of serendipitous in that, like by this, by being on Crain’s opened up this opportunity to get exposure to then lead me to meet with this investment bank.

Um, which then gave me enough data at that point to feel confident in where we were going and, and valuation of our company.

Todd: Can I go back to your [00:38:00] comment of equity is expensive, right? And for me, you know who, I've raised a lot of money for businesses before and I talked to founders and you're absolutely right.

The thing that gets written up is the group that sells for, we sold for a billion dollars and we raised $2 billion to get there. Right? It's so much money gets thrown into these businesses and they talk about the big exits. But when you think about the founders holding onto that equity not only can put more money in your pocket, it means the hurdle that you have to clear to put that money in your pocket is a lot lower.
And chasing those hurdles with money is, uh, man, I think it's a, it's a recipe for disaster. And so I hate to see when my fellow founders go out and they raise more and more money and they're just putting the bar higher and higher for themselves to get the same outcome that they might get, you know, today or nine months from now, a year from now.

So I think that's a really important point. Thank you for sharing that. [00:39:00] The other thing want to jump into is this, you found it, uh, investment bank. And what I love about it is it's like, let me just get smarter, right? So what is my company worth? You're not saying, Hey, I'm for sale, but let's learn from people that really understand my industry from a financial standpoint.

With us, with Exitwise, what we tend to do is get three or four of those investment banks that are perfect for you, that know what your company is worth to put all that analysis together. We do it in a very short period of time. And what's so interesting about it is you get all of these perspectives from experts and you end up seeing kind of a distribution and having a high degree of confidence of what your company is worth today, but also the things that you could do to increase that valuation.
So again, like I just think your, uh, your pension above your weight here to know, to go out and look for an investment bank to get their advice on [00:40:00] valuation. I think that's a point I just didn't wanna overlook. You don't just go to them because you wanna

Joe: sell. Yeah. And, and I just, it was like I just knew enough to be able to reach out to them.
Right? Yeah. It was like, just like not much more than that. And that was the, um, having my experience was. Again, like from these podcasts and books and things that I read, I didn't even know who to call. I didn't have a mentor. I didn't have like this person, I just pick up the phone and ask a question to, and really didn’t even have a board.

I mean, I didn't have like, the stuff that other people have today definitely didn't have an exit wise, like, yeah, for, for someone to be able to reach out and just have a conversation and be like, what should I do next? You know, I just knew, hey, I'm gonna call this investment, uh, investment bank and meet with them and see where it goes.

And that's the theme of like life. And from my perspective is that you just take that next step and then all of a sudden you're now in another room and that other room has different doors and then you just pick one [00:41:00] and you know, then you, that's how you evolve as, as a human I think. and that's kind of what happened.

And, and things just, um, progressively started to get more and more, uh, interesting.

Todd: So you got valuation in mind. Yeah. And I don't know if it was accurate or not, but now you have some real inbound interest, right? So what's the next step here? Yeah,

Joe: So, uh, so I'm sitting there in kind a more formal meeting with this investment bank and they put together these really nice decks for me.

And it's just me and these two investment bankers from this one bank. And, um, and we're going through this packet and it's all of these, uh, potential buyers. So it's all the PE firms. And I start to circle all the ones that contacted me, um, on here or like maybe X amount. And at the end of like doing that little exercise, just going through my email, the page was covered like all of them.

But like four [00:42:00] had reached out. I was like, wow. Like I wasn't even realizing that these big PE firms, like how many people reach out. And so I took that second and really, and really like reconciled that. And then the next page was, well, here's strategic potential buyers for you. And cars.com is on there and various other companies are on there.

And it was just a list of 'em. So it was like, oh, like this, these are kind of my options, right? I can get PE or I can get a company to, to uh, basically purchase us or invest in us. And right, like right around that time that those initial meetings I had with Cars.com started to heat up. So they were both happening in parallel, but I wasn't disclosing to either party what was going on, because nothing was real at that point.

They were just conversations. So, long story short, they, they gave me a stack and they said, think about it. And, you know, we recommend that you go to [00:43:00] market. And what that meant to me at that time was they would line up meetings for me and they would, they would, you know, put us in this kind of, Portal of sorts.

This is what I thought at the time, to then let others know we were potentially on market. And uh, cuz the conversation with, with cars got got heated up right around this time this, they started to get more formal. And then, uh, September 28th, 2017, I received a call. It was like on my anniversary, we're into New York City with my wife.

I'll never forget where I was. And uh, the CEO of Cars.com said, um, you know, good news Friday, we wanna purchase your, your business. And got real excited. We talked about it for maybe 10, 15 minutes. The same time my wife walks in, cuz we, we, uh, took different routes to this ho this, uh, hotel. And I'm [00:44:00] just smiling, pacing in the lobby like I, like I normally do when I'm on the phone and she's looking at me like, what's going on?

I'm just like, you're not gonna believe this. And. And, uh, I'm so excited I'm about to hang up the phone. And then I realized like, wait, are they gonna buy both companies or just dealer inspired? So I asked the question right before I hang up, I think it was one of those that were like, hello, hello? And, and I'm like, wait, are you buying both companies?

And, and the CEO said, said, yes, both companies. And it made for a wonderful, uh, anniversary weekend to just think about the possibilities there and the, and the life changing effect of all that. But then, you know, we really quickly got into diligence and, uh, this is kind of another fascinating, funny thing, is thatwe always did things as a business that were, I believe were right.

Like we never used our money for like silly personal expenses [00:45:00] So I knew diligence would be. Fairly easy in the sense that like there's nothing like hidden under rock anywhere. So once one side, I started to get all this information, um, and this was pre the official offer.

Then I finally was like, why don't I just make you, uh, a user and login to my Quick Voice account and you guys could log in and grab whatever you want because I don't even know what you're asking for to pull some of this stuff. And they're like, really? And I'm like, yeah, cuz I had nothing to hide at that point.
I'm like, I'm like, there was, there was, it was a, it was a no lose, but they couldn't really gimme evaluation until they did their full diligence. At the same time, the investment bank group is having conversations with me about potential people that still could, invest in our company or, or purchase our business.

Um, [00:46:00] Because again, at that point it wasn't super real. I think right after I got the verbal offer, I went back and I approached them and I said, listen, if this offer does pan out, um, I would still like to retain you, but as a, as a small fraction of your fee because I have the buyer. And what I realized quickly in going through that process is part of what they do is they do the work to present you the potential buyers.

So I had already, I had already done that, um, pending the cars.com. Actual, uh, value was, was solid. So, It's Halloween. It's all these like landmark days, um, that I was set to meet, to review kind of the, the offer and what they wanted to give for the, uh, business.

Um, And at that point in [00:47:00] time I felt good because I had a deck made by this investment group serendipitously spelling out exactly what we were worth and, and uh, and I had all this inbound interest from all, all these other companies. So it set me up for a really good meeting to uh, then walk through what the sale of our company could look like from evaluation standpoint.

Todd: This is just amazing. I'm gonna step back cuz there's so many points that I think are really high value here, Joe. So this is stepping back quite a bit.

The buyer list, right? So the, the bank is presenting, you here are the likely buyers, private equity, strategic, and you're able to check off all these boxes, right? These groups have reached out to you and [00:49:00] typically what you'd want is that like a really industry specialized investment bank will have some very key, like under the radar relationships where they're gonna.

To first cuz they know exactly how your business fits. And that sim, that confidential information memorandum that they built for you, even gets catered very specifically to buyers that drive up the valuation. How are they gonna leverage what you have in a way that another buyer won't, and that's why they're gonna pay more.

But yet you had all of these buyer relationships and the actual buyer is calling you directly, right? Then you jump to knowing that you can essentially put that buyer on a protected list. Right? That's just, well, we would refer to it and anyone that comes with a buyer in hand, you put that person on a protected list, it's a totally different fee structure.

Right? And most investment banks are like, sure, you got the buyer and you want us to help close a transaction. Yeah, we can discount that. So just really, I don't know how, you know, all of this having never [00:50:00] gone through the process.

Joe: Well, you're, you're teaching me right now. Some of this stuff I still don't know.

Todd: Well here's, here's one thing that I know that jumped out at me as like, okay, he hasn't sold a company before. Because when they call you and say, we wanna buy your company, you gotta admit now, right? The work is just beginning. That is not celebration day, right? There is a long path between yes, we want to do this and actually, you know, getting it done, but amazing that you're able to put this together.

You don't have a cfo, right? Which is critical in these processes, right? You've got. A controller at best, a bookkeeper, right? Yeah. And then you're keeping it private by pulling data. And you've got, to your point, your data room is very clear, very clean.

Right? Not a lot of personal expenses, which we never, you know, blame founders for, right? These businesses are personal piggy banks for a long time, and they have the rights to do that. But when you go into an m and a process, things do have to be cleaned up. Buyers have to really understand what is the cost of running these businesses.

[00:51:00] So, um, I don't have a question after that, other than pointing out some pretty amazing steps that you were able to take having never done this before.

Brian: Well, well, the thing that that jumps out to me is there wasn't much of a whisper of this sale in the industry before it happened. I remember where I was when you called me that morning to say that you had sold the business.

And in most cases, I mean, you know how kind of the auto industry works and how many industries work, you start bringing people into the fold at the last minute because you have to. And word's gonna slip out before the day that it closes for you. I don't know that I had heard anything. I don't know that most folks in the industry had heard watch, and, and I think you've told us why today, right?
It answers a question that a lot of people have had because no one knew it was coming. And then you make a bunch of phone calls that morning and say, with a sly grin, it's done. I've done it.
Joe: Yeah. And, and what I realize is the company that acquires was a public company that has a whole nother set of rules and [00:52:00] guidelines.

And when you, when you talk about breaking one of those rules, the consequences are far, far different from a private company. So, um, one is, I, I didn't wanna risk anything. They asked me not to say anything. I, it was just a really kind of hush hush thing until that morning, Brian, but it, man it, what a hard secret to keep, you know, for sure.

Brian: There's so many different layers to that, right? Because I think most founders go in not wanting the world to know. You're not yet committed to this process of selling. Maybe you're handling inbound interest. Maybe you're having a professional investment banker starting to market your business, but it's not in your best interest for your employees.

You know, top to bottom to know that this is happening, to start envisioning how much money they're gonna make at the end. Right. It, it's just not a great spot to be in, to have the world know before the transaction closes. So to be able to to, yeah, to manage some of that confidentiality. And a lot of that comes with, you know, working with the right teams and having the right banker and [00:53:00] having the right, you know, m and a attorneys involved.

That, that certainly helps, as you said, publicly traded, that adds a another level of kind of security to the process. But you also, you know, because you were handling so much of the internal burden yourself, there was less risk of the word getting out from your team because it was kind of a personal journey.

Yeah. Yeah.

Joe: That's,

Todd: Joe, can I ask, so since you're doing the bulk of this yourself, you are negotiating, right? And it sounds like in every negotiation you're gonna have a tough conversation. So you gotta know that you're likely gonna go work with these guys and you're talking with the ceo, so you gotta look like a guy that they wanna work with, not just want the product offering.

And you've gotta drive the price and you've gotta run a business, right? You can't let it slip while you're, you know, going through due diligence. So can you talk to us about that negotiation that you, seems like you took on your own shoulders? Is that true?

Joe: Yeah, it was myself, um, the [00:54:00] CFO and the CEO in a room in Chicago in their corporate headquarters.

And it, it was a whole day event that started at 9:00 AM I didn't know it was gonna be a whole day event. Um, but I should say that. Even though at that point I had retained this investment banking group, I thought going to this process that they were gonna do a lot of that for me. But because of the company that was looking to acquire us, um, they hadn't really had done a lot of significant deals.
They didn't wanna deal with them. They like outwardly refused to deal with the investment bank that I had hired, um, to help me with this process. And I just remember saying like, I don't wanna deal with them. I just wanna talk to Joe. So I was the one that was, that [00:55:00] was, that was having these conversations.

So I'm the one that found myself in this room alone, um, with the CFO and ceo, um, on this, this Halloween day. And, uh, and the day started with, um, Presentation of showing everything that cars has and, and can offer us. And as you can imagine, um, what's going through my mind, like what are they gonna offer me for the business?

Right, that's all I got thinking. So I like, I think I even said at one point guys like, come on man, let's, let's, uh, like I know where we're at and know about all about this, uh, business here, but I really wanna understand where you're at. So, so in, in true fashion of like being any good, uh, negotiator, the initial offer came over relatively low, um, with very quick, and I think somewhat fair at that point, um, upside through like multiple levels of earnouts.

Like it was just, it was obvious that, um, this, it was a fraction of the [00:56:00] valuation that I understood our business to be. This was my first, uh, uh, reaction to this. And there was like all these components where I could get the whole valuation if I would hit these thresholds, right? So immediately I looked at that and I knew, again, I had this book in my bag of this, of knowing what the company is worth, uh, from a third party.

So I felt very confident, and that's one thing that I would say is like, make sure, like when you go into meetings, like, and you're negotiating something like this, which is the biggest day of my life, I would say, you have leverage, you have something, you have some source, you have, you have some sort of artifact with you that's actually on paper that you're not digging through a computer that you can pull out and have a conversation.

So that initial offering, um, you know, my, my response was like, listen, I, I love that I'm here. This is [00:57:00] unbelievable. I'm so honored to be here, but we're not even close. What, what we think, uh, what I think this business is worth. And the, the day continued on with a little more back and forth, a few times me stepping out.

Well, the board had had to get involved and, um, we got to the end of the day and we still weren't there. And, uh, that's when I pulled out the artifact and I said like, listen, this is the third party value. We went through it. And um, there was also some other competitors I was gonna meet with that next week, just out of luck that it just so happened to be like a week later in Florida at this automotive conference.
And I think all of those things combined just really, gave me the right information to present in a meaningful way to show that our company was, was worth what they ended up offering us. [00:58:00] I end up leaving that day still with nothing, nothing in hand, no verbal agreement. I get to the bottom of the elevator, I get a text message and it's basically like, Hey, if we do this, we really want you to stay with this business.

You know, we're buying you as much as the, the company. And, um, my response was, absolutely I will. And, um, I think that's really important to, if you say you're gonna do something, to do it and have character, um, in no way, shape, or form. I think I was gonna exit or leave the business anyway.
Um, so I leave, I get home, I start trick or treating with my kids. I get a text message that says, trick or treat. I think I still have it. And it says, check your, check your email. And I'm walking in this neighborhood. It was a newer neighborhood to us, and I start to trail in the back and my wife's like, what's going on?

And, and I was just like, I'll be back in a few minutes. I check my email and the offer's there. And, [00:59:00] uh, I think before, before I even called her, I called my attorney . Yeah, yeah. Or, or, or, uh, told her, I called my attorney and I'm like, I'm like, check this out. And he's like, no way. And I think he too was impressed that like, it was just me and the investment maker wasn't really helping that much, but you know, it's just being authentic, being real with things.

Um, all of that stuff kind of, there was no playbook I was following or, and if there was, I didn't know where it was, you know, I tried to find it. Um, it was just, it was simply just like taking that next step and trying to make the most of it. Um, it was an, it was an incredible day.

Yeah.

Todd: Yeah. Thank you, uh, for sharing that with us. I go back in my head to when a buyer says, I don't want the investment banker there, I just want to talk with you of like, wow. Trying, you know, just trying to grab the upper hand. and it isn't mutually exclusive. It isn't that [01:00:00] they're either gonna talk to the investment banker or get to talk to the founder, right?

It's both. The investment banker is there to coach you, to guide you, to bring those artifacts and proof points as you suggested. And you know, I've been in those where I say, we're gonna need a couple of minutes, and I've taken the founder out and say, do not ever say that again. Right? So there are moments that having just a second set of ears is very helpful.

And I, again, I'm coming back to like, how did you pull this off and get to the number that was in your mind where it needed to be? Dealing with a public company that every time I'm sure that number goes up, they're gonna go, need to get approval for something. It can't be easy to negotiate in that situation with a guy who knows his limit and if he has to surpass his limit, he is gotta go get approval.
Right. And there's so many personalities that are, um, playing off against each other. Yeah. Again, amazing that you're able to, to pull that off. So when you say the [01:01:00] offer hits your email, is it a letter of intent at that point? Yes. Okay. So it's a letter of intent. Yep. So you've got a number that you're happy with, a structure that you're happy with, a commitment that you, and presumably your team is gonna make to cars.com Right.

And pending due diligence. So then you go to an m and a attorney and say, Hey, look what I've got. We've got some work to do.

Joe: Well, I had, I had already been consulting with, with an attorney and, and I should also say like, through the process, um, I had leveled up attorneys a few times. So leading up probably a year until this happened, I was dealing with an attorney.

Group that was really sophisticated and large and, and did m and a and understood things. I didn't, they weren't hired initially for m and a attorneys. They were hired just for regular business, but they had that, that, uh, specialty. So if I had like a question along the way, like I didn't have anyone, but, um, I would, I would consult with them a lot.

So, [01:02:00] and, and he was, he was fantastic. Um, to just clarify one point, or, or to add to it, I should say, is I don't think that the CEO of that company did that to get an upper hand. Like, like meaning, like he wasn't trying to bypass the bank to get a better deal in this case, but certainly that could happen. I think it was two people that were authentically trying to make something happen and he didn't want someone else in the middle that wasn't authentically as vested.

Right. I think that made a huge difference to me cuz I was dealing with like just a person, like a human being that could tell was really was, was really true and was really authentic and that made the whole relationship work and it still does to day for the, for that reason. So, so I, I don't wanna just paint it with like, they, they tried to get the upper hand because I do think that would be true.

And maybe I'm still [01:03:00] naive to it, but it, he, he was so authentically just trying to like, figure this out I just wanna deal with you, man. Like, like why do we have to bring these other people in? So, um, Yeah, I just wanted to point that out.

Todd: Yeah, I would love to believe that too. Let me ask you if, if they didn't know, if they didn't know that next week you were hitting two or three competitors and all of a sudden they lose their first look advantage, do you think you could've closed or do you think the events would've unfolded the way they did if you didn't have that hand, right?

Cause you had valuation one hand and then, Hey guys, like I have a fiduciary responsibility. Everybody ha has, you know, equity in this business to explore my options unless you take me off the table. Cause that's essentially what you're saying and that's what an investment bank would do. And they would know they're really serious.

So you think it would unfold the same way.

Joe: And that's the interesting thing is that if they would've [01:04:00] came to the table with just the valuation that, and I shouldn't say just the valu, it was a great valuation, but what the investment banker gave me, I do think things could have played out differently.

What happened was that letter of intent was, Beyond, well beyond what that was. So it, it immediately shifted by me thinking like, oh, maybe I should go to market and see what, what I could get elsewhere to this is a burden hand and a pretty damn good deal. And I have a really good feeling about working with this company.

Cause it, it was more than just the financial side of it. Of course. Like the, like what I knew about the business is we had a lot of growth, but I didn't wanna start grinding and like what I knew of pe which could be wrong. And, and definitely I think each PE firm's different, but you know, you, you get reinvestment and you have five years to really try to squeeze a lot and be as profitable as possible.
And to me, we'd have to sacrifice growth [01:05:00] versus the buyer that I had was like, we want you guys just to keep going and we're gonna help solve some of these pain points. Which to me at the time was just cash flow. Um, was the biggest pain point and um, and that's ultimately what happened. So it was the right buyer.

Um, but having said that, like would've played out differently if the, if that letter of intent wasn't higher or some of that stuff didn't happen, I think it could have, but I think it was really smart on their, on their part to get more aggressive for that last offering.

Brian: So trick or treating, you get this fateful email letter of intent, you then get with your attorney.
What's your initial reaction to that, beyond the number and then was there anything that was in that that you'd say, you know, that you were glad that you had some, some additional support or additional eyes to say like, whoa, we need to talk about some of these other things?

Joe: Yeah, so I was just remember walking, we had just started trick or treating, so I just had a smile on my face the entire time.[01:06:00]

Um, got home, opened it up on my computer and I read it and I noticed it was a. request to purchase the assets to the business. But I dunno if you remember me saying we were a C corporation. So immediately I was like, oh, that's off. I wonder if that just like, that verbiage is off and they don't know that we're a C corporation and it should be a stock purchase.

I message the CEO back, we, we texted, I said, Hey, can you just make that, make that a stock deal? And he is like, oh, I, I don't think that'd be an issue. Or like he said something like that. Like, it was just like a, it was maybe wrong verbiage from, from yellow. I, but what I came to realize the next day and is that, uh, it was intentional because, uh, there's a far different tax implication in buying stock versus assets than both a buyer and seller.

So yeah, they could have [01:07:00] purchased our assets, but that would've been a huge tax burden on us versus our stock. Um, and it, it. Became really outta my league quickly in terms of what, what we should do. So then I quickly got witha new accounting firm to really kind of help dig in, and came to the conclusion that it really needed to be a, a stock deal for us to make this work.

So that I thought was gonna be something we'd get past really easy and, and smoothly. And, um, it was actually a point of contention beyond what I thought, beyond what it, what I thought it would ever be. And what ultimately ended up happening is there was a, there was a delta that was pretty significant that would tax would get shifted one way or or the other.

We ended up [01:08:00] splitting that, um, to make that, to make that work. Um, But again, for us, the having it to be a stock deal was very beneficial for the reasons which we should talk about, which is like USBs, um, benefits that we received from it.

Brian: Yeah, if you could dive into that real quick, because I think we've hit on it on a previous episode and we've heard founders talking about it, but we'd love your perspective on why and how that was such a big deal as you were going to sell.

Joe: Yeah. So the QSBS – I’m not a tax accountant, don't wanna give advice, but there's benefits for creating a C corporation. I'll just, I'll just say that, and you could just Google QSBS, you could put in show notes, um, to find information, more information about this. But it's a program essentially that the government has where if you're a corporation, you have stock for more than five years and you hold it and there's other criteria and it, and it doesn't work for every single [01:09:00] vertical out there, um, then you get.

Tax benefits if you sell that stock after a five year timeframe. And at the time of the sale, the projected closing was gonna be five years in like 15 days. I mean, that's, that's how close it was. And I learned this from those podcasts and from this week in Startups, which was a podcast I'd listened to and from just listening to other people talk about this back in 2011, 2012.

But I had almost forgot about it because, you know, I wasn't focused on selling the business, I just set it up in that way. So, um, when we had the events of the sale, I was able to take advantage of that, but I wouldn't have been able to do that if it was an asset sale versus a stock.

Todd: I gotta touch on it because that Qualified Small Business Stock is what you're talking about.
And the first 10 million of gain to the individual of that stock is tax free. [01:10:00] Correct. And that could have applied or probably did apply to multiple owners of stock. So it is an enormous difference and I love that you mentioned this week in startups by Jason Calacanis. Right. So I know him a little bit, but I listen to that as well and I bet it would be, you know, a great feeling for him to know that wow, this advice actually, you know, helped somebody in this way.

I'm just curious from a tax perspective, that public company, it really was a financial decision for them to push an asset sale as opposed to trying to get certain liabilities, historical liabilities that might come along with stock. They weren't just trying to get rid of that, it was purely financial.

Correct.

Joe: Okay. Yeah. There was no, there was no. Mock around that other stuff. Yeah. At all. It was just a merely a financial thing.

Todd: Sometimes buyers are just say, I want the assets because now I don't have to worry about what this company did or an employee did, or you know, past lawsuits coming to kind of rear their ugly heads.[01:11:00]

But yeah, so purely financial, and we've seen it numerous occasions where you go out, you did the perfect thing again, Joe, where you go out and get an expert opinion, a tax accountant's opinion, to say what is the difference from a post-tax perspective? And then you guys end up splitting that baby. And yeah, that's probably the fair thing to do.

We shoot to get all of that from the buyer. So you end up whole, but it sounds like you gotta make some compromises when you've got the perfect buyer, like you said, it's the perfect buyer for your company, not just the perfect number.

Joe: Yeah, yeah, that's right. That's great. Thank you. And, and I remember receiving the email from the accountant if they were like, Pretty shocked that all everything was in place.

The whole checklist of what you have to qualify for. For the QSBS. Yeah. Including the number one was five years. Right. So it was, they're like, wait, it's five years and 15 days that this is gonna happen. And you've done like all of these things [01:12:00] that, and the list isn't exhaustive, but there is like 10 things on there.

Yep. Um, and they were also shocked. And at that point I remembered like Dad, that's why I created that . Like I remember back in the day,

Todd: it sounds like you even challenged the lawyer at the beginning, right. You had the information that the corporate attorney that you had at the beginning when you were setting up the structure of the business, you said, no, I want to go and do it this way.

Right. Cuz you had the information from podcasts , this is amazing.

Joe: From the podcast. Yeah. So, full circle to culture, I guess, as you're approaching closing the closing date, and I guess shortly thereafter, I guess, how did you think about your team?
Right? It was gonna be news to all of them, right? Yeah. How'd you think about the culture of what you would be in the new world combining with a publicly traded company? All the, the questions that, of course you're gonna get that the moment that you announce this. Talk us through that.

Joe: Yeah, I mean, there's, there's like a ton that you can anticipate, but really what it comes down to is how does this affect me?

That's what you gotta, not me as, as myself, as the employees, like an employee is gonna be like, Oh, that's great. But what happens to me? Am I gonna get laid off? Am I gonna get a raise? Am I gonna get X, Y, Z? So you, so you get in front of that immediately. Um, as many questions as, as you'd anticipate. And then, um, then you start to have to prove it.

I mean, you know, like, it seems like all rhetoric initially, cuz you, we've [01:14:00] all watched the movie, we've all seen what happens when companies get, get acquired, what could happen. But I truly, in my heart knew that that cars was the best place for the future of, of our business. And it panned out to be completely true.

Um, the, the team is in a place today where, uh, from the engineering team on that they wouldn't have been without having a partner like ours. I just thought it was, it has, has been a wonderful ride and journey for them, uh, and, and for us. Um, But it was, uh, you know, it was initially shocking. Uh, it was initially, how's this gonna affect me?

And you had a lot of education. You know, you had people that didn't really have underst understood. They were our, at the time, we had 450 employees. The average age was 27 years old. You know, they thought what that meant was we got an infusion of capital and we could give everyone raises. Like, you know what I mean?

It's, so, there's just a lot of different understanding [01:15:00] of, of what that, what that means. Um, but it, it ultimately meant to me that we had stability from a cash flow perspective by everyone from quickly checking the bank 10 times a day, to not even knowing how to log in, which was an amazing feeling. And, uh, and it allowed us to focus on the business and really focus on the, the strengths and, uh,
There's a lot of learnings along the way. Like I, I think, uh, and Brian, you and I talked about this offline, but one of the things initially is your first reactions, like, it's gonna kill our culture. That's what everyone says, right? merging with a bigger company. It's gonna really hurt us. And I was under that belief initially, is that like, we gotta protect our culture.

Not that it's gonna kill our culture, we just gotta protect it. And that means that the teams are gonna be intact and we're just gonna remain as is. And, and we're gonna operate separately. [01:16:00] And I think for the first year that was right, for the second year, we should have really looked at synergies quicker.
I think cars did a great job in letting us be our separate thing. But it really wasn't until I was like, I'm seeing so much inefficiency across the whole system that we should merge together quicker and, and do things like. Great example would be we would have the same reps call on the same dealers and they wouldn't really know necessarily that, oh, we just had a dealer inspire rep in here, in the car.com rep slot.
So we rectified that over the last year and a half and have started to merge these teams and they couldn't be happier. Now they have more resources, they're more efficient, uh, they're doing more with less. And, uh, and it's been a great thing. So I, I think going back, I would've probably done that sooner.
Um, it maybe made the initial transition [01:17:00] six months instead of two years before we started looking at synergies like the way we did. And certainly back office accounting, all that stuff happened. But I'm just talking about client facing the bulk of the business. The operational side was, uh, could have been, um, even better sooner had I not, and I take this on myself, um, thought about.

How do we actually use the power of this one big company versus keeping these two things separate? Cause Brian is, as you very well know, in our space, it was, it was shocking to people and that we had built this really good brand, and I think people were, even from the OEM level, were kind of scared of what it could become.

Um, and uh, it's nothing but more stable today than it was in the past because of the, the talent that we have. Yeah.

Brian: There's been, and, and this is across every industry, but in automotive there were a lot of questions, right? It was a collision of two worlds, right? Uh, a culture [01:18:00] and a and a brand and a, and a team that was on the rocket ship and, you know, so widely regarded, being combined with an acquirer.

That was maybe a bit of a question mark. And I think those questions were pretty quickly addressed. I mean, there, there's some really bad transactions and acquisitions that have happened over the years in which those two companies weren't properly merged. And this one, I think, you know, again, coming full circle to the intro, this is one of the more successful that certainly I've seen with my own eyes.
Any surprises for you personally? Right. Your bank account is different, you've climbed to the, to the mountain tops. Maybe not as much stress of, you know, how am I gonna make payroll anymore, but mm-hmm. , you know, we hear sometimes that there's a a bit of a letdown, whether that's a week later, a month later, a year later of just, what do I do now?

I'm still here, I'm still the leader of this team, but it's different. Any surprises? Yeah.
Joe: Success to me was always a funny word because people would see the businesses growing and we were doing a lot of great things and [01:19:00] I'd get pass on the back often, and I was like, don't say I'm successful until I have like a defining exit or something happens where you can clearly say, okay, that's the line in the sand.

We crossed it because up until that point, I believe anything could have happened where it could have. Been disrupted very quickly. That sale could have fell through, the, could have mismanaged cash flow, you name it. Like something could happen any day, so don't cash your chips too early. Right. So I was big believer in that.

What I found surprising is that after I sold, I still had that feeling. Um, I still had the feeling of, man, this is what it feels like. And there was just like this something missing still. Um, and I thought I would just, I thought I would feel much more fulfilled in that, yeah, I'm an entrepreneur, I just did this, these amazing things and now I can just feel great.

Um, [01:20:00] and sure I had those feelings early on, like in the day that we closed and I was on cloud nine, as many founders are. But then, you know, as time went on, especially a month, two later, um, and beyond it, that feeling wears off and then you start to. Think about like your why in life. Like, okay, well why am I, why am I doing this?

what am I gaining now that I didn't have before? And you realize that money has far less to play in happiness than you could have ever imagined. You hear that, but you don't realize it until you actually go through it. And you can also have a hard time talking to people about it cuz it's hard to say that to someone, right?

That may be struggling. Like you can't have that same conversation. And it's not like this sort of depression, it's just like more of like, okay, what's next? I'm on, I'm on this mountain. So, so [01:21:00] that's when I started to look at health and I started to look at my family and I started to look at these other things that I think play a crucial component in life that I neglected so much when building this business.

I mean, I was. At one point 245, 250 pounds outta shape. So stressed out that I thought I, you know, was gonna have a heart attack. And my family history, we have a lot of heart issues at young ages, so I'm like, what's the point of having done all this if I'm gonna die? And then that's, that's when I started to look at and I gotta, I better do something about my health.
And for the first time went to like an executive physical and just started to get things in track. And then that led me down a path of, of, um, doing races and martial arts and all this stuff that I, I became involved into, which led me to where I'm at today, creating a non alcoholic brewery. Cuz one of the things that was holding me back that [01:22:00] I realized was alcohol.
And I had been drinking to, uh, escape reality for many years. I. Wouldn't say I was an alcoholic. Um, I know many alcoholics wouldn't say that either, but, um, I've been under the cloud of alcohol since I was 15 years old, man, like maybe 14 years old, at least drinking a couple times a week, some days, 10 beers or cocktails in a day.

Um, nothing extraordinary for my peer groups, but just never was not on it. And then my wife and I finally said Too much. This isn't, this is too much. And we abstained for 75 days during this challenge and I realized that I had clarity that I hadn't had in a very long time. And it was cuz I was off of alcohol and I curbed my craving through non-alcoholic beer and it really helped me, uh, gain a different perspective on life.

And, [01:23:00] and at that point in time we would go out and hang out and there was really nowhere to go after dinner. Um, On a date night that didn't revolve around alcohol. So I, so once again, it's just kind of one foot in front of the other, kept stepping through these doors to see this opportunity, um, to create something.

And, uh, that is what led to Go Brewing.

Brian: So. Cool. We, we have been enjoying, uh, let's see, this is the, uh, Sun Beam Pills throughout this conversation. Mm-hmm. , so those listening, not watching on, on YouTube, that's what we've been doing over the last little bit. It's really an incredible story and I don't, I don't wanna say it's the conclusion of that story because you're, you're still midstream, but it is, you know, one of the themes that we've talked about to this point is each of those steps along the way and Right, and you created some amazing companies, exited those companies still involved, but are now finding your next passion in that long line of entrepreneurial kind of endeavors.

And it's really [01:24:00] cool to see you graduate into that next step. And, uh, we're obviously big fans and excited to see where you take it.

Joe: Uh, thank you very much. Yeah, and it's, uh, it's been awesome and I'm still involved in cars. I'm the Chief Innovation Officer at Cars.com. So, you know, luckily the brewery isn't, um, taking away from my, uh, my main job helper with m and a and strategy in the, uh, future.

Um, I stepped down this last year as CEO of Dealer Inspire. Um, after got to 5,500 clients, 800 employees, 45 OEMs. You know, I felt really good about things, but there's always more. And, and you know, one of the, one of the things I would tell an entrepreneur is like, create your company is if you're not, it could be successful with you, not there.

Like to me, the fact that we're thriving right now dealer Inspire is, uh, with cars.com. I'm prouder about that than anything that this company [01:25:00] is growing and doing fantastic. That something that was not even created. 10 years ago is where it's at today, um, is just probably the proudest thing, um, that, that I can, you know, look back and say, wow, you know, that actually worked and, and, uh, and they're doing great.

Todd: So, Joe, thanks for sharing the story. It really is incredible and I was thinking like when Anheuser Bush calls and you get the call for this to call us, but you might be the one exception here where you should just go and do this entirely on your own. But, uh, yeah, really appreciate the time today and good to get to know you a little better.

Joe: Yeah, I will say that having resources like yourself out there in the world, just to like, make sure people know about it because, um, and obviously this podcast is helping cuz you don't know what, what you don't know. And certainly this process would've gone [01:26:00] smoother at it, that people like yourselves exit wise and um, I reach out to attorneys and pay for them for advice all the time.
When something comes up, you know, it's the best money spent. So don't feel like you have to have someone on this full retainer either. If you're listening to this, if you have a question, like I, I would remember going to an attorney and say, Hey, can I buy an hour of your time? But I have a list of questions from unrelated to really any specific thing and just go at it.
So like, you're never gonna be as, as smart as someone that's in this business as, as, uh, you guys are knowing how to navigate these things. Um, you know, I certainly am going to seek advice the next time as well. So I think, uh, I think things, things will go smoother, but I think it's to having the character, trying to do the right things as much as you can and, you know, good things happen.
Brian: That’s great. Joe, this was super fun. Love hearing the story, love spending the, the time with you and I think our listeners are gonna get a, a ton out of this. So thank you so much for doing this. [01:27:00] Yeah.

Joe: Thanks for having me.

Todd: 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, Exitwise.com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.