In 2011 Josh Holtzman, the founder and CEO of American Data Company, gathered his employees into a conference room to announce “Fifteen Cubed”, a company-wide initiative to grow to $15 million in revenue by the year 2015.
As part of the program, Holtzman had “Fifteen Cubed” bracelets made for each employee and promised to share 15% of the business’s sale proceeds with his team.
His team left the conference room energized. The only problem was, American Data failed to grow: it remained stuck between $3 million and $4 million in revenue for the next two years.
Fast approaching the 2015 deadline, Holtzman decided the only way for American Data to reach their goal would be for him to sell his business to a similar company.
In this episode, you’ll learn:
- How to value your shares when you merge with another company.
- Why an earn out should never be tied to your employment contract.
- The definition of personal risk tolerance and how to know when you’ve reached it.
- The surprising power of a great name.
- The metrics around how many pitches you’ll have to make to get a term sheet.
- One little known reason companies make strategic acquisitions.
Magnet 360 acquired American Data for an amount about equivalent to their top line revenue because Magnet 360 was looking for a fast way to create a geographic beachhead on the West Coast. Have you considered how your location might (or might not) make you attractive to a buyer? That’s one of the questions you’ll ponder when you complete The Short List Builder, Module 11 in The Value Builder System™—get started for free by completing your Value Builder questionnaire.
About Josh Holtzman
Josh Holtzman is an entrepreneur and business coach based in Los Angeles, California. Holtzman began his entrepreneurial journey at the age of 26 and grew his technology consulting firm into one of the fastest growing companies in the nation. He ultimately sold the organization to a national player. Together they grew that business 300% in three years and ultimately sold it a second time to a publicly traded global IT services firm.
Holtzman currently works with entrepreneurial leadership teams to help them get what they want from their organizations through a simple set of proven tools and disciplines.
Do You Know An Entrepreneur With A Story To Tell?
We’re constantly on the prowl for interesting stories from owners who have sold their businesses. We look for owners who have sold a business that was generating $1 million or more in revenue, who are willing to share their story candidly with our community. Forbes ranked Built to Sell Radio one of their top 10 podcasts for entrepreneurs and we have more than 100,000 downloads, so your story will get shared with a great community of like-minded owners. Nominate yourself or someone you know today.
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.
Opening up to employees has become standard procedure for most progressive companies, but does giving your employees a glimpse at the numbers have the potential to backfire?
Entrepreneurs can be categorized into two groups. On one hand, you have the doers. These are the people who organically grow a business over time. They plod along for years, or even decades in the same business. They look for small, incremental improvements every day. Their natural tendency is to say no to new ideas and they have to be thoroughly convinced before they change strategy.
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