07 Jun Built to Sell Radio: The Bait & Switch
Carrie and Dave Kerpen started Likeable Media, a social media agency, in 2006.
The business grew to more than 50 employees when the couple met for their annual partner’s retreat. The Kerpens realized their business had blossomed into a big success which they estimated was close to 90% of their net worth.
The Kerpens decided to sell and quickly received a 100% cash offer of 6.5 times EBITDA, which seemed too good to be true given that marketing services businesses almost always involve an earn-out.
Turns out it was.
After the Kerpens signed a Letter of Intent (LOI), the acquirer changed the terms of the deal offering just 60% upfront. The Kerpens realized they had fallen victim to a bait and switch and decided to walk away.
Lucky they did, as soon after, the Kerpens accepted an offer of around 8.5 times EBITDA.
In this episode, you’ll discover:
- How to productize a service.
- The power of naming and trademarking your offerings.
- How to leverage interns to get your business off the ground for pennies on the dollar.
- How to stop billing by the hour.
- The difference between a small business owner vs. an entrepreneur.
- How to ensure you control the outcome of your earn-out.