The Wise Exit

Cashing Out Podcast | Episode 4 | Josh Linkner | 5 Tech Exits > $200M

Todd: [00:00:00] Hello and welcome everyone. I'm Todd Sullivan. And this is Cashing Out. This show is an open dialogue with fellow founders and former business owners, sharing their stories and advice about selling their companies to some of the top acquirers in the world. Today, we have a special guest good friend, as well as former investor of mine, Josh Linkner.

Josh has been the founder and CEO of five tech companies, which sold for a combined value of over $200 million. He's an internationally recognized expert on innovation in the author of four books on the subject. Josh is an accomplished venture capitalist as founding partner of both Detroit venture partners and his latest firm, Mudita Venture Partners.

Josh, thank you for doing this. I really appreciate you taking the time to chat with me about the businesses you've built and bringing that perspective of being a venture capitalist to the table. Thank you. My pleasure. Great to be. So you've had this amazing run as an [00:01:00] entrepreneur and as an investor, I know these insights, any advice that you have are gonna be gold for fellow founders who are thinking about not only building business, but selling it someday, because that's really where we focus.

But just between us, when you agreed to do this today, I didn't think twice about bumping mark Cuban from this time slot. So thank you very much for being here.

Josh: Oh man, you have bad judgment. You should have kept Mark for sure.

Todd: So, uh, I like to start if this is okay with you of just kind of how we got to know each other as human beings, right.

And you may have a different story, but when we first. I was invited after a bit of badgering of the Detroit venture partner team to get in front of you guys to pitch a business that I was working on is something I kind of incubated for a while and was bringing back to life. And I thought the timing was really right to try to scale that business.

And I remember pitching with [00:02:00] you across the table, and I would have to say that as an investor, that was pitching to all you did was. And I felt like maybe I gotta give a little more, maybe I gotta give more because it was just listen and listen and listen. And that's really what I took away from that first meeting.

And then eventually DVP invests in my company. And then you as a board member, I think this was the thing that I took away from the entire experience. Were those weekly walks around Detroit for you to purposely get me out of the office and think about the business. Think about other things, right. Try to bring new perspective into what I was doing and what was so evident about those meetings to me was that you cared about me as an entrepreneur and not just the outcome as an investor, right?

So you were relating to me, founder, to founder, entrepreneur to entrepreneur. And taking some of that loneliness that you have as a [00:03:00] founder, a little bit off my shoulders and just making me better. So for me, man, if, more investors could have that perspective to be really more than money and frankly coaching you from the last tech crunch article that they read, they could do so much better service to founders.

Like you certainly did. I don't know if you remember meeting differently, but, um, you left a big impression on me and why we're friends today, or one of the reasons.

Josh: Well, it's very kind of you to say. I had a similar, recollection. I was very impressed with you. You are, you were deeply articulate.

You were forthright. You didn't have any ridiculous claims that were just easy to punch a hole through. So, you presented as both passionate and credible. And that the sort of deep degree of both competence and integrity I'm really shown through to me. And, you know, back on the investor side, I think you're right.

I think that too often it's an us versus them type of mentality. And that's, first of all, I do try to be a good listener. I'm not always good at it, but I try to really listen to not just both, [00:04:00] both what's being said, and what's not being said, try to give the person an opportunity rather than, you know, cutting them off.

And then on our walks, you know, I think you're right too. We spend so much time being heads down in a business. And if you have a board member, who's like, Hey, let's go be heads down some more. What good is that? You're already doing that. So I tried to get you and, and others heads up, you know, where you're thinking about, you know, more broader opportunities, more strategic type thoughts, and, no better way to do that than getting out of your normal surroundings and, going for a little walk around beautiful downtown Detroit.

Todd: Well, it was much appreciated. So I think to kind of give the most value here. Right? You’ve had five tech companies that you built and sold. But if we could maybe focus on ePrize, I think for me, that's one of the most interesting stories. You built that over a long period of time, a relatively long period of time exited that business.

I'd love to hear that from your perspective, and then maybe you jumped into being an investor, but Mudita is a very different type of firm. So I wanna make sure that [00:05:00] we talk about that and the expectations that you set on your founders with with the new founder. Tell me about the origin of that business, who was on that ride with you?

Josh: It's, it was quite the ride I should say. And, and just to, you know, to frame it for, for folks, I started the company 1999. I was the sole founder. We did a, uh, recap in 20 2005 and we ended up selling the business in 2012. So I was the CEO for 11 years, and then I moved to a chairman role and hired an outside CEO who took us to the end zone.

And, and it was a high profile thing in Detroit. This was the most sort of notable and high profile tech firm at the time was when we exit it was the largest pure internet exit in Michigan's history. Um, but that was good and bad. I mean, we, we had some public setbacks and challenges as well, and, and like most things, you know, you look in the outside that looks very glamorous and there were moments that were great.

And there were, there were moments that were very difficult. So. As, you know, uh, being an entrepreneur is not wearing light gloves [00:06:00] and sip and tea. It's a, it's a blood sport, you know, it's like more like street fighting than anything else. And, and it had to do a lot with, you know, your resiliency and such, but, um, yeah, again, I started the company.

I got it off the ground. And we ended up with a, a few different types of investors over the years, but, um, no institutional capital, it was only, uh, private individuals, uh, that helped us get to the end of the goal line. Happy to elaborate on any or all of that. The good, the bad, the ugly, the early, the late, the middle, whatever is helpful to you, Todd

Todd: Yeah. You know, we hear recap every once in a while. And I think that that is a, a foreign concept to a lot of investors. Maybe you could talk about that period of. Who you were bringing into the table, getting alignment to do recapitalize the business.

Josh: Sure, to bring you back. So, and again, I started it myself.
I had a venture firm originally that was sort of dabbling in venture. Really. They were sort of a quasi-institutional investor, but they didn't, they didn't really invest like that. And, but they committed to do more investment based on that commitment. We, we went and made hires and took office space and then they pulled their commitment.

So it was a [00:07:00] verbal commitment, not a hard commitment. And so I was like stuck. I mean, this was right when the.com crash was happening. I had no cash on my balance. It was bleak. And, and, and I don't, if I told you this, but, um, so I'm for, like 60 days, it was frantic, like 7:00 AM to 2:00 AM, seven days a week, trying to raise money.

Trying to save the company and it came down to a Friday afternoon and this was, I, I'm not exaggerating. We, this was when I hit the wall. I did every game. I knew how to play. I stretched payables, whatever, but this Friday was going, we were gonna crash. And, and that's when payroll was due. And I woke up that morning with $0 in my bank account.

The thing is I was getting close with new investors, but it wasn't closed. So I literally, and I had, I had a previously scheduled full team meeting that day. There was maybe 45 people at the time and I literally prepared two speeches. What would I say to my team? If we saved the company, what would I say to the team if we lost it?

And I'm not exaggerating man, 15 minutes before that company crashed like padlock on the door, bounce paycheck crashed. I received [00:08:00] wire transfer from new investors. And so I walked in bloody exhausted, you know, sweating and said, we saved the company. And it was very difficult, honestly, but, but in retrospect it was a, it was a real blessing.
The only reason I say that is, you know, I'll talk about the successes that we had, but you know, very often in, in these journeys, it, it gets close. It's a hard, difficult process to, to, to build something outta nothing. And, you know, to a degree, it could have gone the other way easily. Could've gone the other way.

But anyway, the, uh, the recap question, so I brought in new investors at that time individual private investors, and, um, we were getting a lot of opportunity by, by 2005. So they, they came in in two. By 2005, we were getting, uh, we had real momentum there. The business at that time was maybe 25 million in revenue, something like that, 30.

And, we achieved some leadership position. We were making money. And so we were getting a lot of knocks on the door from private equity and some strategic buyers. So we actually retained the banker and we were considering, uh, a sale. At the 11th hour, our existing investors said, why in the world would we let this beautiful company go to [00:09:00] someone on either coast?
What if we kept it here? And that sentiment was actually led by notable Detroiter Dan Gilbert. Brian Herman was I also a partner of mine and Danny were very close and, and Dan stepped in at that point and we did a recap. So definition, what that means is if you get an investment, let's say someone put 60 million of an investment.

That money goes into the company to allow the company to. A recap is where some shareholders are selling their shares to somebody else. And, and cash, instead of going into the company is staying outside of the company. And so we did a $66 million recap where 66 million of shares traded hands, but no money was put into the company that money was allowing some of the investors and some team members to take some chips off the table and to get ready for round number 2.
So that's what we did in 2005.

Todd: Thank you for explaining that because a lot of founders can get pressure from, uh, existing investors that have been along for, for a while that want some liquidity. They think there's an opportunity on the [00:10:00] table and they can really force an entrepreneur's hand. So a recap is, you know, a great way to give them the liquidity they want, keep the entrepreneur, run the business, or maybe you're bringing in, you know, new management team at that point.
And now you have a new set of investors that maybe have a longer horizon for their.

Josh: I'd like to just add real quickly that I think it's actually really healthy for entrepreneurs too, because, you know, that's when I had already had some successes, but many entrepreneurs, like 99.9% of your net worth this tied up to in your startup and it's an illiquid asset.
And so once you achieve some success, every risk you take, you, you think you're like betting your family's future on it. You know, every, every dollar you invest is a dollar of less food for your family's dinner. And that actually. Unhealthy. Whereas someone used to have a high risk profile tends to become more conservative.

And so like in that case, I did take some capital off the table as part of that. And it was really healthy because it allowed me to be more effective leader. I was rewarded for some of the work that did so far. I was able to diversify some equity outside of the company and still had plenty of excitement going forward.

So I think that what, not, in all cases, but in many cases, [00:11:00] it's actually a really healthy thing. It allows entrepreneurs to be even more effective for that next slide of the.
Todd: I love it because at exit wise, we often run dual processes to bring in that kind of equity partner or sell the business. And what we're really trying to do is give the entrepreneur options, right?

They love the business. Do they want to keep running it and take some chips off the table? That might be the best move for the business and their existing investors. So, it's not done frequently, but yeah, we, we try to run dual process as much as we. Okay. So now old investors are out newer in they've got different expectations.

Are you still running the business at that point? Are you the CEO still?

Josh: Yeah, so I, yeah, I was the CEO from 1999 at founding, uh, until 2010. So I 11 years and for me, and, you know, everyone's experience is different. Um, so, so Todd, you know, I'm a jazz musician. I yeah. Started my career playing jazz guitar and I still very passionate about it.
I read this article. It hit me like, like a two by four to the head. The article basically said that as a business [00:12:00] grows, the metaphor of leadership changes from that of a jazz musician to a classical conductor. And then of course that headline grabbed my attention, but it was really true when, when we were young, when we were 10, 15, even a hundred people, it was fluid and messy and artistic and creative.

And I love that. I thrived in it. But I knew at some point I would know when I was no longer the right person to be the best CEO. And we got to the point where we had 500 people and a hundred million dollars in revenue. And like, it was clunky. I, instead of being able to make a change on the, on the, on the fly, I would have to assemble my legal team and bring together the training ops team and, you know, like it was clunky and, and anyway, the article basically said that.

Early stage of a business. You're, you're a jazz musician. It's fluid. You're taking responsible risks. It's messy and creative, but over time leadership requirements change where you're more around alignment and precision and accuracy and getting people to play the notes. Exactly. As they're written on the page.

And I, I thought about it and I, I said, I went to my board ultimately and said, you know what? I can look in the mirror and say, I'm a pretty darn good jazz musician. And I'm an okay classical conductor. Now, there was no [00:13:00] pressure from the board. They, they didn't weren't bitching. Like we were growing double digits making money, but I said, listen, I know that I'm not the best person to run this company anymore.

And I think at this point we should bring in the best person to ride. So I convinced him, I shared the article and we did a national, uh, recruiting effort. I brought in a wonderful CEO who came in and, and I moved to a chairman role. And, and he was the right person for the job. Like I didn't enjoy running a 500 person team.

He thrived in it. He said many times, like I couldn't have done what you did and starting the company. And so I, I think it was just having the recognition of where our strengths and weaknesses are, and also putting the company's best interest ahead of my own personal,

Todd: Yeah, that's great to go from one person to 500, there are multiple skill sets involved.
Many different stages. So the fact that you were able to take it that far and then recognize, right. That you're not the guy going forward, you know, in my companies, I get to 25 people and I felt like, Ooh, there's probably somebody better for the next stage. So, uh, kudos for taking it so far. So now as chairman, how does the [00:14:00] final exit come about?

Is it some, someone approaching you? Is it a process you decided to run? How did that come?

Josh: Well throughout our journey. And I know this happens for many companies, especially ones that are high profile. You know, we had knocks on the door, there were strategic, there were some that went some fizzled, but, but by 2012, you know, by the way, most of the investors, even the ones that took some chips off the table were still in from like, you know, the year 2000.
So, so they'd been around that table for over a decade. They were getting a little tired and, um, and, and at the same time we, we saw an opportunity, like the company needed this. Energetic, uh, push. So we did run a process and, um, we, we went through and, and met with both strategic and, and financial buyers. That process very much, uh, sound like, like you would run for a company and it was a deliberate, thoughtful process.

And we ended up with multiple offers and, and of course we selected the one that we thought was best, both, both economically, and also for our folks. And I'm sorry, the timeline on that was 2012.

Todd: And how long did it take once you made that decision to sell the business, to, to transact.

Josh: Well, we actually looked at doing it a little [00:15:00] bit earlier.

Uh, but, but you know, the economic conditions macro-economic conditions were, were one kids you might remember coming out in 2008 and nine. Sure. So we, we buckled down and continued to grow, but, um, once we made the decision, I think the start to finish was about a six month process. And, um, again, we ended up with multiple offers in our case, the final exit number was right around $155 million.

Todd: So you, weren't new to M and a at that point, right? You kind of, you had previous businesses that you built and sold and you did a recaps. You really know what you were getting into when you hired on an investment banker to help. What do you think? What was the most surprising part of that process for you?

That other people might be able to take something from.

Josh: Let me bounce back to I, I sold a company in 1999 and I'll get back to your question on ePrize. Yeah, but I sold a company. It was my, really my first, you know, real exit. I had a couple smaller ones, but this is a meaningful exit. And, um, I just didn't get great advice from my banker.
There was we, we took a bunch of restricted stock. And that stock again was restricted. Now there's something that you could have easily negotiated. What's called a [00:16:00] collar, not getting all geeky on you. It basically allows you to lock in a price you're selling, offsetting, puts and calls or whatever. Anyway, I could have easily negotiated that in, but my banker didn't suggest that I didn't even know what that was so long story.

Short time. I, I saw my, I, I got some cash too, but I saw my share price go from like, I don't know, eight or 9 million. 45 million, but I couldn't sell the stock. And, and I, and then I painfully watched it go all the way up and all the way down, we ended up fine. I'm not bitching again. I'm not a victim here, but like if, if we had made that, that one simple, easy ask it would've saved me, like, you know, 30 million or something

Todd: You are selling to a public company.

Is that right? I sold to a public company.

Josh: I sold to a public company. This was again, a company I sold in 1999. Yeah. So the reason I only bring that up is that one thing that I I think is so crucial is getting, you know, really thoughtful advice. Somebody who's really in your corner and has a sophistication necessary and the nuances of a particular industry specifically, so that you don't make a big botching mistake, but like, like we made in that case.

Um, but what surprised me about the later one is, um, the banker that we chose to hire had had a great line, which one of the reasons we hired [00:17:00] that person, he said, lots of people in our industry will get folks to the. We're gonna do the same, but we're the, we're not the besting people to the table. We're finishers.

So they basically made the case that their probability of success of a busted deal would be, you know, a busted deal. Success would be very, it would be very unlikely. And so they basically made the pitch that like, yeah, anyone can get a term sheet in front of you. It takes something special to make sure that term sheet actually closes.

And so that was an interesting way of looking at it. And again, it convinced us to go with them and they, they did a fabulous job.

Todd: That's great that I like that insight. I would say that for many founders to understand how frequently these M&A processes fail is it's pretty disturbing. Right? And so when you have somebody that has a lot of conviction around, Hey, we can get deals actually done.
That's a big feather in their cap. It certainly look for the evidence and I'm sure they had it. So that's great. It sounds like you chose the right group chose.

Josh: The other thing I would add too, is that I've heard this said on, on the venture side too, but, um, and it may be helpful for the folks listening.[00:18:00]

The, the notion is that amateurs care about deal price and pros look at deal terms. And so you can do all kinds of things to inflate the optics of the deal price by having a bunch of contingencies and you have earn outs and complexities and, and, and non cash asset training, like, like, so, so the point would be again, that's why it's so important to have the right person in your corner is we entrepreneurs wanna show what's the purchase price.

Like that's the most important thing, that's your bragging number, but you might actually be better off, like more money in your pocket with a smaller bragging number, but, but, but more certainty. And so. Just something that, that, that I don't think should be overlooked. It's easy to just gravitate. What's the overall number, but the, the real art is in is in all the various terms underneath that number.

Todd: Yeah. I think one of the things you're hitting on here is structure. And what we like to focus on is industry experts really understand what are the most effective and likely to occur structures when they sell a business within that industry. But then when you couple that with an M and a attorney who really knows how to protect you [00:19:00] and get the terms solidified that ensure your outcome, or get as close to that as possible, it's just worth its weight in gold.
Right? You can leave half the money on the table if you don't structure those things. Right. So appreciate you saying that. I think that's very valuable. It is a team effort. And if everyone is firing on with a similar level of understanding and what the goal is, you're gonna just achieve it far more frequent.

So I don't wanna jump too fast away from ePrize. Is there anything else in that whole journey that you think for you was very special, something that you would wanna share?
Josh: Yeah, we, it almost write a book and I know many companies have similar stories. Mine wasn't that unique, but, but I remember, you know, early on, I, thought, Hey, I'm gonna build this company and sell it in two years.

Like that was my original idea. And, and I'm glad I didn't, because sometimes things that, you know, it was a much better outcome that I could have done in two years over time. The other thing though, is that, um, Actually two things. One is we tend to, uh, discount the value of shares early on. And so there were people that [00:20:00] I over indexed on shares early on, cuz to me, those shares were near worthless.

Like, oh, what do you mean I, I can save 10 grand a year now I gotta do give is 1% of my company. You know? So I think that it's a good thing for founders to really be thoughtful and think about your shares as you're handing 'em out now with the word today, but what they ultimately will be worth when you achieve, uh, you know, what you're trying to build.

Um, and then, and then, and so that that's one thing. Another thing is there was a really interesting case. We got an offer early on for $8 million in cash. It was, uh, at the time I was like, kind of inching to take it. I was like, cool. You know, young, I'll just do this, go flip this, move on. And I, I presented it to my board and they said, no.

And it was one of the few times where it really was just, I lost an argument to my board and I was, I was kind of pissed off, you know, like, like, I, I, what do you mean? Why are you doing this to me? And, and one of the, uh, wonderful board member named Phil sat me down. He. Really smart, thoughtful gentleman.

He had a lot of success and he just like, he convinced me, he was like, listen, we're not doing this to hurt you. We're doing this to help you. And, and I, I ultimately became much more trusting and I really tried [00:21:00] to, you know, learn from, from those around me, instead of fight those around me. And, and it was to his credit and, and, and others around that allowed us to ultimately achieve the best outcome.

Todd: Wow. Okay. So, you know, I clearly wasn't there. I'm wondering how that really all went down, because if I'm in that position, I've been in that position to advise founders. Even if I think right, that there's a bigger outcome down the road to understand the risk level that an entrepreneur has endured to that point and the opportunity to change their lives economically.

I think right. Just as a human, I want people to have that kind of level of protection to live, to launch another day. Right. That's what I like to say. And then you get to be in that position to fund that founder the next time around with a little bit less fear, economic fear in the back of their heads, making every decision like you alluded to before.

So yeah, I mean, I guess you're thankful to these guys, right? For keeping you in this one.
Josh: In that case, by the way, it wasn't his greed, even, you know, it wasn't that, and by the way, it wasn't for the whole company, my piece, that's why I remembered eight mine would've been [00:22:00] 8 million. Yeah. You know, so it was like a big check, you know?

And so, but, but, but he, he wasn't like saying, Hey, I want you to hold up for my purpose. He was like, listen, this is not in your best interest. And he showed me, he's like, let's look at it. Logically, look at all our big customer base, look at the recurring revenue of our nature. Look at our contracts, like going forward.

And, and he just, he, he walked me step by step through the logic. And he is like, this is not you. You're not optimizing. And it wasn't again, trying to, for his, his game, he was really as a very act of generosity, he could have taken his body and ran, but it was an active generosity that ultimately both benefited from.

Todd: That's great. That's great. Then that that's an ideal person to have on your board. So maybe we can jump from that to, you know, you become an investor board member helping founders. Right. And I touched on it at the beginning, but to have an investor that is truly in your corner to help you get better.

Right. Understanding the position that you're in that lonely, lonely job, trying to manage people, customers, the business it's invaluable. So you founded or co-founded Detroit Venture [00:23:00] Partners, right? Was that soon after ePrize or was there anything in between.

Josh: So again, I moved to an executive chairman role first at ePrize.
I was there about six months, but I really didn't wanna be down the hall like inter at some point I had to trust the CEO to run with it and I, I didn't wanna muck with him. So I, I moved to a chairman role still, but I was no longer employed by the company. And so I took a, a couple months sabbatical, which I wrote a book.

So I wasn't that big of a sabbatical and then started the, uh, Detroit venture partners immediately. And so I was the founding CEO. I was the majority shareholder. And then, Dan Gilbert. Was an investor at ePrize became, uh, a partner of mine. And then Brian Herlan also investor at ePrize became my partner. So the three of us started Detroit Venture Partners in 2010.
And, um, you know, the goal was to, to make a difference in Detroit. We wanted to not just make money, but make a difference. Um, but also to be, as you point out as you are really founder friendly, um, There there's, I don't wanna disparage any model, but, but many, many, uh, investors, you know, they're, financeers by trade.

They, they can run spreadsheets, but they [00:24:00] never built anything. And so we took the approach that, you know, we we're okay at, at, at crunching numbers, but, but we're better at building companies. And so we thought, could we operate alongside the entrepreneurs instead of at odds with them to help support them when they're, when they have a bad day, we understand that we've been there and also to help them really think through strategies, to accelerate growth and mitigate.

So the theories by being active, participatory investors, instead of hands off finger pointers, could we have a better outcome for everybody? And that's, uh, that was the strategy that we embraced.
Todd: And as a portfolio company, that was definitely felt when you were there, right. It was a small intimate environment and very supportive.

So after DVP, right? You've written more books. Got the speaking engagements. I think what I'm excited to touch on is Mota and how you're not necessarily looking for the grand slam every time. Right. Certainly there's a return that has to be there, but there's another way to get there. Can you, uh, elaborate on that?

Josh: Sure. So following the timeline started Detroit venture partners in 2010. Um, Dan Gilbert ended up buying my shares out in [00:25:00] 2014 and over the next handful of years, I you're right. I, I wrote several books. I've done a lot of public speaking, um, set on boards, made angel investments, et cetera, et cetera. But, um, in, uh, Last year.

Yeah, well, about now almost two years ago, my brother, Ethan and I, Ethan is a, is a talented and successful tech entrepreneur. Um, decided to start our own fund. You know, COVID gives you a chance to pause and figure out what you like and what you wanna do for the next 20 years. And we decided to team up together.

So we launched, uh, last year we closed our first round of capital, uh, a new firm called Mudita Venture Partners, M U D I T A is a Sanskrit term, which means taking joy in other people's success. So Todd, for example, the fact that you're crushing it with exit wise and you're doing these amazing things, I get deep joy out of that.

You know, it's not, it's not a, it's not a selfish or resentful one. It's like good for you. That's awesome. So we really thought that, that you could build a fund around the principles of generosity and kindness and compassion. In other words, you don't have to be a raging asshole to be successful, and we're still equally like, you know, outcome focused and [00:26:00] driven and intense, but, but you can do that in an uplifting manner.

And so, so that's what we set out to do, uh, with Mudita Venture Partners. And similarly though, we're deep in the trenches, helpful active participatory investors. Um, it's a 40 million fund. And, uh, so we've been, you know, we raise capital and we're out there making, uh, literally just before our, our session today, we were on a deal flow call where we just approved in other investments.
So we're, we're active investors, early stage tech companies. So these are early stage software companies where we think we can not only, uh, drive economic returns, but also we call it a Mudita score, trying to make a positive difference. Last thing I'll say is, you know, we, we thought long and hard. What are we trying to build together?

Not just with fund one, but over the next couple decades. And it was pretty simple. We ended up our, the peak of our Mount Everest is return a billion dollars of capital to investors, and return a billion dollars of good to the world. And so those are the things that we're focused on, both doing well and, and, and making a differe.

Todd: Well, I can say right, for, just from personal experience, having you as an investor, right. You're the right guy to do this. And I would encourage anyone [00:27:00] that, that is considering taking on investors. It's not just the money. Right. You gotta know who is gonna be on your team and find that personal and professional fit.

So, uh, yeah, I'm glad you're out there doing that. It feels like something that you are meant to do knowing you, knowing you well. Is there one takeaway when we look at building businesses and selling businesses, what is the one thing that you would want our fellow founders to take from your story? Given that the exit right is generally a black box people don't talk about it.
Numbers are frequently kept private and founders don't get to do this. You might start three or four companies, but if you get the chance to sell one, you really gotta do it. Right. So any words of final words of wisdom?

Josh: You know, I wish I had a single silver bullet thing and there's so many, we could go back and forth probably like tag team, a hundred of 'em, you know, cause it is a complex thing.
You know, the one thing I will say where I've seen people make mistakes is that, um, they, they, they try to go only for the long dollar. Like the example I [00:28:00] I gave earlier is maybe the exception and, and to their detriment. Uh, I was working with a, uh, someone that I, I was advising just recently and, and. If they, and, and there there's a deal on the table with this company and this particular founder is gonna walk away with like 40 million and, and, and that will be completely life changing.
Like that will change everything about this gentleman's life and his kids and his grandkids and, and like all the financial freedom in the world. And, and, but he's like, wow, I don't know. Maybe we should wait a couple years. And I'm like, listen, the material difference. If you wait a couple years and get to 60, it's gonna be immaterial for like, there's not, you're not gonna buy a fancier car.
You're not gonna feel more comfortable. You're not gonna buy your wife a nicer handbag, but if you don't get this and you, you, it doesn't, it doesn't materialize or risk sets in and it doesn't happen. You know, I'd hate for you to look back and say, oh my gosh, I, I turned down 40 and now it's worth 5. And so I, one mistake I see people make, it's not the only silver bullet tied to answer your question, but, um, you know, if there's, if there's, you know, life changing capital on the table, I just think you should [00:29:00] seriously consider cuz you know, as we saw with COVID, there's things that are unexpected in the world outside of our control and, and you hate to look back and say if only, and so, the notion, you know, live to fund another day as a good one, the only thing I'll just say quickly is, you know, your time is worth something.

So if it takes you three more years, To, to, to have a slightly better exit. Yeah. But if you get recapture those three years and now you can start the next thing, or even if you'd spent three years on sabbatical, you know, we shouldn't, we shouldn't ignore the notion of time in addition to risk. So those are the two pieces of advice I might give.

Todd: That's perfect. That's perfect. I think a lot of founders are in that spot. They have an opportunity to sell today. They could hold out for tomorrow, but are those really the, the dollars you should be chasing? Could you be doing something better with your time? Is the ROI better today than it would be in the future.

Josh, thank you so much for doing this. I think it is really, I think it's very valuable for all of us, right. Where we really don't have a full perspective of what it takes to build a company and sell it. So thank you for doing this.

Josh: Absolutely my pleasure. And thanks for the great work you're [00:30:00] doing. I know that there are many investment bankers out there that are very focused on themselves, and you really are, uh, one and if not, the only one that I know that is deeply found or focused.
So, um, we absolutely need people like you and your firm, uh, to, to make this whole process come full circle. So I'm grateful for the excellent work that you need, you and your team are doing.

Todd: Thank you, Josh. I appreciate it. All right. Have a good one. You too. Thanks again for listening to the cashing out podcast.

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