How I turned $15k into $15 million. Part 4/The End... A ๐Ÿงต...

Part 1 TL;DR - Left a good job to "eat what I killed" - Did consulting and pivoted into software - Didn't know shit about software - Taught myself coding - Ran out of money - Launched a course to finish the software MVP

Part 2 TL;DR - I got sued by a heavy-handed company ("Cocksucker" Co.) - Had to stop working on my project for 18 months

Part 3 TL;DR - I got lucky with a rockstar developer hire - Had quite a few acquisition conversations - Battled w/ companies with a ton of VC - Finally, received a $15 million acquisition offer

After I received the IOI (Indication of Interest) for $15 million, I was pumped up. I owned 94% of the common stock and 85% after employee options (we only had 5 employees so it would be a good deal for them as well). But something didn't feel right in my gut...

I decided to talk to an investment banker and get his advice. Note that I'd been handling all negotiation myself. He basically told me I would be insane to not accept the $15 million offer. The banker was right, the offer was more than "fair" but....

...the tone of the conversation with the banker pissed me off. He basically told me I was screwed if I tried to negotiate further by myself. "Fuck him" I thought. I'll prove him wrong.

I thought about the deal for a couple days and I just wasn't ready to sell for that amount. I felt like I could easily just be wanting more and getting greedy, but I went with my gut on this one. I sent the head of M&A an email that contained this revised ask. (aggressive!)

I had a call with a few people on their M&A team and basically told them my ask was based solely on what the market was telling me. What I never told them is that we never actually went out to the market and shopped the deal. They were our only buyer, but they didn't know that!

A key consideration here: I was happy to continue owning the business. I was confident that we could get to $5-10 million of revenue with 50% free cash flow. While we didn't have any alternative bids, we had an alternative scenario that I was more than comfortable with

They told me they would get back to me... 3 days later, they called me and told me "we accept, we'd rather not negotiate and would like to to move forward". Here's language from their LOI.

I was shocked for a day! "Holy shit, they simply said yes" It was the negotiation from a dream. I still get emotional thinking about that call where they said "yes".

I sent this to the investment banker and I could tell he was shocked. He then started to sell me on his due diligence assistance services. I was open to that. Turns out he wanted $600k for that. Nope! I'll handle due diligence myself.

I basically worked every day for two months getting the buyer the due diligence they needed. I wanted it to be as professional as possible. I sometimes worked most of the night to get them the material they asked for a day after their request.

I could have had a couple of my employees do this work for me but I wasn't going to ask someone else to eat shit if I wasn't willing to do it myself. I sucked it up and got it done.

I had two employees ask for changes to their stock option agreements. At first, it pissed me off but I often say "it never hurts to ask". I agreed.

I slept three hours the night before closing as we were waiting on a few more documents to get signed. The deal was supposed to close at 9:00 AM. As of 8:00, we were still missing one key document.

I tried calling the person about a dozen times and no answer. At 8:47 AM, it showed up and we all hopped on a conference call and the deal was closed. I was no focused on making sure our employees got their wire payments before the end of the day. It was a logistics nightmare

But all the wires cleared, including my own! $14+ million in my bank account with a few payments to come contingent only on my continued employment. I have received one more for $2.5 million w/ three to come.

If you remember Cocksucker Co., they ended up raising $100+ million and sold for a rumored $20 million. Common stock holders and employees received nothing. [insert evil laugh]

In summary, I.... - Learned web dev - Hired good people - Built a niche software product that customers wanted - Marketed the shit out of it - Resisted the urge to raise VC - Resisted the urge to hire a ton of people - Wasn't afraid to negotiate! If I can do it, you can too!!

And I want to help you....more to come on that front!

PS. $15 million is post-tax

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