Ian Silverberg was considering acquiring a health club when he discovered a surprising lease that all but guaranteed his acquisition would be a winner.

Intellectually, you know you need recurring revenue, but how do you build an annuity stream in an industry where subscription billing is not the standard?

Take a look at the example of Laura Steward, the founder of Guardian Angel Computer Services. She was in the business of fixing her clients’ computer problems when a valuation specialist told her that Guardian Angel was worth less than 50% of one year’s revenue. Determined to get more for her business, she underwent a makeover focusing on her Angel Watch subscription program.

Steward went on to sell her business two years later for four times what the valuation consultant thought it was worth. In this interview you’ll learn how to:

• Switch customers from hourly to subscription billing.
• Overcome the objections hourly customers have for making the switch.
• Ensure customers stop asking for your personal attention on their job through one simple idea.
• Maximize the value of your contracts in the eyes of an acquirer.

In 1999, Andrew Weinreich sold Six Degrees, a social networking site based on the same idea that sparked the likes of LinkedIn and Facebook, for $125 million. In the following years, he went on to sell three other companies including one to IBM and another to Match.com.

Most founders are lucky to have one successful exit, but Weinreich has already had four. In this interview, you’ll learn:

• The common denominator among all four of Weinreich’s exits.
• Where to find the company with the highest probability of acquiring you.
• How to hire an M&A professional for a “Dual Track” mandate.
• The mistake most entrepreneurs make when they assemble a board.
• The simple technique Weinreich used to let buyers know he was interested in being acquired (without sounding desperate).

Frank Cottle led an investor group to buy Hi-Mark Software for 10 times EBITDA. Cottle then sold a chunk for 15 times and ultimately sold his last tranche of equity for more than 16 times EBITDA to Lufthansa. In this interview, you’ll get deep inside the mind of a private equity buyer and learn:

• three reasons acquisition deals fall apart.
• the difference between your reputation and your brand and which one acquires value most.
• the definition of “suicide by investor” and the dangers of getting into bed with a private equity group.
• how stock clawbacks can dilute your position to zero in the company you started.
• how a stock re-capitalization works.
• one key decision every entrepreneur must make in growing their company.
• why cross-selling as an investment thesis is flawed.

Building a sellable business doesn’t have to take years. Drew Kraemer received his first acquisition offer nine months after he started Marketplace Strategy.

When you get an acquisition offer your eye will immediately go to the offer price. That’s only natural. But — there could be two other negotiating points that could have just as large an impact on your windfall of selling your business.

Jack Groot discovered all three when he went to sell JP’s Coffee Shop — a business that USA TODAY® voted one of the top 10 coffee houses in America.

Turning business down can be tough for an entrepreneur, but Mitch Durfee learned the hard way that saying ‘yes’ can lead to disaster.

Staffing-industry veteran Will Gilbert co-founded Socium – a U.K.-based company supplying workers to companies that needed them – in early 2019. Within six months, Socium was generating more than 7 million U.K. Pounds in revenue. 

Laura Gisborne has started nine companies and sold six of them, including The Art of Wine, the subject of this week’s episode. The Art of Wine is a tasting room with a subscription-based wine club division. With a little more than $1MM in annual revenue, The Art of Wine was still a relatively small business, but when the lease came up for renewal Gisborne reasoned it was the perfect time to look for a new owner.

Gisborne channeled her experience from six exits into the sale of The Art of Wine, and in this episode you’ll learn how to:

• Attract a steady flow of inbound offers for your business
• Pick your number (hint: it may be lower than you think)
• Ensure a competitor does not get their hands on your private information while marketing your business
• Use your location to attract a buyer
• Use the buyer’s ego to your advantage
• Build systems to you-proof your company

Peach New Media was launched in 2001 by Dave Will, who carried the title “Chief Peach” until he sold the business in 2015. Will had built his learning-management software company up to 40 employees when he received an offer from the private equity group Accel-KKR that he simply could not refuse. In this interview, Will shares his wisdom on:

- How to create a company acquirers will want to buy.

- How to figure out when to sell.

- How to look at your business as an investor would.

- Cup-holder ideas and how they impact your company’s value.

Natalie Susi started Bare Organic Mixers to supply low-cal cocktail mixers to bars and restaurants in southern California. Susi got her product into 300 locations before she decided to sell her company to a strategic acquirer in the organic foods industry. In order to maximize her take from the sale, Susi had to decide whether she was offering an acquirer the chance to buy her company or her product.

Andrew Yang had built Manhattan GMAT into an $11 million business when Kaplan Test Prep, an 800-pound gorilla in the education business, threatened legal action against his company.   Rather than react defensively, Yang sought to build a relationship with Kaplan executives, who would eventually go on to buy Manhattan GMAT for more than 8 times EBITDA.   To see how Yang turned a potential crisis into a clean offer of more than 8 times EBITDA.

What are the top 10 questions every entrepreneur has when selling their company? It’s John Warrillow’s turn in the hot seat this week, and he’s got answers.

John Maddox co-founded the digital agency Ten Fast Feet in the depths of the financial crisis. Despite his timing, Maddox was able to grow the business to $2.3 million in sales by 2013, when he got a call that would change his life forever.

Ari Ackerman started Bunk1 in 1999 to give parents a way to keep in touch with their kids while they were at summer camp. Over 17 years, Ackerman grew his technology business into one of the biggest brands in the summer camp industry, which is about the time they were approached by TogetherWork, a company backed by a billion-dollar private equity giant.