In 1999, Andrew Weinreich sold Six Degrees for $125 million. In the following years, he went on to sell three other companies including one to IBM and another to Match.com. In this episode you will learn his secrets to exiting big.
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).
We’ve now had 24,000 business owners leverage The Value Builder System™ to improve the value of their company. We have a 12-step process we take business owners through, and one of the most common misconceptions people have when they start our process is that they will sell their business to a stranger. That’s a misconception we work hard to erase because, in our experience, you’re much more likely to sell to someone you already know. Uncovering your Short List of potential acquirers is something we’ll do during Module 11 of The Value Builder System – get started for free by getting your Value Builder Score.
Click to Tweet: Learn the #secret to & common denominator of all 4 of @andrewsroadmaps successful exits on Ep. 58 #BuiltToSell.
At Built to Sell we’re all about shifting the balance of power from the buyer to the seller. If you support our mission, please write a review on iTunes—and if you have any comments or questions you can find us on Twitter and Facebook. Tune in every Wednesday for another episode of #BuiltToSell Radio with John Warrillow.
About Andrew Weinreich
Andrew Weinreich is a serial entrepreneur, social networking pioneer, and active presence in NYC’s Silicon Alley for 2 decades. To date, he’s founded 7 startups and has been awarded 2 software patents. Recently, he has sold 2 businesses, including Xtify to IBM in October 2013, while advising 5 tech startups. He is currently the co-founder and Chairman of Indicative, a data analytics startup. He is also the founder of Andrew’s Roadmaps, the premier educational platform for startup founders.
Some Highlights of the Show
Business: SixDegrees, MeetMoi, I Stand For and Xtify
- Andrew is now in his late 40s. [2:00]
- Andrew started seven companies, one has failed, two are still going strong and he has exited from four. [2:45]
- Starting with a team of seven people and $25,000. [10:55]
- Raising $25 million and the constant quest for capital. [12:49]
- “If you can figure out how to get the board to work for you, you can substantially increase your ability to scale, implement and achieve your objectives.” [16:11]
- $125M stock transaction by uStream [20:10]
- The big lesson from the exit of SixDegrees – There is no mathematical methodology on when to sell. It’s very difficult to predict the macro changes in an industry. [22:00]
- In most spaces, there are huge waves to come that facilitate dramatic success, if you are not in a business long enough you will not be there to experience that wave.
- “Being around for longer increases your likelihood of success if for no other reason than that you are around.” [25:50]
- “We were aware that there was this opportunity that would occur when we could incorporate imagery into the social network and it was beyond our grasp.” [27:30]
- With the introduction of each new technology we have seen new social networks. [28:30]
- The power of the advisor board. [30:57]
- Click to Tweet: The mistake most entrepreneurs make when they assemble a board. [32:10]
- The triggering event that lead to the exit of I Stand For. [35:23]
- Click to Tweet: The simple technique Weinreich used to let buyers know he was interested in being acquired (without sounding desperate). [38:00]
- “We optimized [the sale] for time instead of for price.” [40:40]
- While we were building MeetMoi we pivoted many times.
- MeetMoi was the foundation for Xtify and the options were mirrored. [49:30]
- Click to Tweet: How to hire an M&A professional for a “Dual Track” mandate. [53:20]
- Approaching the business development vs. the M&A team during an acquisition. [58:40]
- #1 Takeaway – “You need to develop relationships with the logical acquirers well before its time to sell the business. You need to figure out why it makes sense to develop relationships with them to further your business — not just to sell it, well before its time to sell the business. If you do that, your on the path to sell if and when you do decide to sell.” [1:01:20]
- Andrew is currently working on AndrewsRoadsMaps among other startups.
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