Customize every outreach 🗣️

Welcome back to another edition of The Wise Exit!

I’m Brian Dukes, a Managing Partner at Exitwise. 

In today’s newsletter, I’ll cover: 

• 3 lessons from Jeff Seibert’s Increo and Crashlytics exits 📊 

• The top 6 M&A deal killers of any business sale process ⛔   

• Why competition is needed in M&A 🤼

• Interesting books, podcasts, and more 📚 

Let’s dive in!

Featured Founder

Name: Jeff Seibert

Current position: Co-Founder & CEO, Digits

Noteworthy: Starting Crashlytics at zero and selling it to Twitter for $100M in just 14 months. He has also raised $32M so far for Digits.  

Where it began: Obsessed with computers since he was a kid, Jeff taught himself to code by 13 and chose his college (Stanford) based on a search to find out where the most startup founders had gone to school.

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Jeff’s first company, Increo Solutions, was built with friends for a computer science class competition (they won). After meeting a DFJ Venture Capital associate on campus, they took it to a $500k seed round, and were acquired by Box.net in 2009.  

Next up was Crashlytics, a software development kit for reporting app crashes. He and co-founder Wayne Chang raised a total of $6 million and built a product that solved a problem Apple was struggling with at the time. This caught the attention of Twitter, who bought the company in 2013 for a reported $100 million.   

Jeff currently co-leads Digits, a software company providing accounting reporting that’s clean, in real time, and has easy-to-understand visuals.

M&A Lesson 1: Find the right co-founder

For his first company, Increo, Jeff built it with his college friends in the same program. While that made the process fun and easy because they were already spending so much time together, they all had the same skillset: coding. 

But they had no experience or interest in things like marketing, sales, and operations. Looking back, he sees this as a huge liability. 

While it’s natural to build a business with likeminded people, remember to balance that with others who can do the things you can’t or aren’t interested in doing. 

M&A Lesson 2: When raising capital, customize every outreach

Through 6 rounds of financing with 3 different companies, Jeff has never used a pitch deck. He believes in customizing the message for the investor you’re talking to. 

He starts by answering a basic problem question: What problem are we trying to solve and why are we the people to solve it? And then lets them ask questions. 

This helps him identify their needs and then guide the conversation to those points. Which means you must know your pitch “drop-dead cold,” Jeff says.  

“You need to know every single figure by heart, every single number, because you have no deck in front of you. You just have to be able to talk about it. I have found that to be way more effective.”

M&A Lesson 3: Be thoughtful when sharing news with your team

Jeff and his co-founder Wayne had signed the deal with Twitter over the Christmas holiday without their team knowing an acquisition was even being considered.  

They had 18 employees who had wanted to join a startup, not work for a giant company like Twitter. They knew they had to be strategic in how they would tell the team about the acquisition. 

To convey why they had bought into the idea, they rolled the announcement into their year-end review and told it in a story format. They shared personal photos from the deal and told humorous stories to break the tension. 

And then the lead investor showed up with an armful of champagne. “The goal was to very slowly break the news and spend the rest of the day partying.”  

Featured Blog 📰

The stat is disheartening, but Jessica Fialkovich, co-author of Getting the Most for Selling Your Business, says that up to 80% of business owners who try to sell their businesses fail to do so within a year.  

We want to lower that number by helping founders be prepared. In this blog post, we identify the 6 major things that can sink a deal, and how to mitigate them.     

In a nutshell, the top 6 deal killers are: accounting mistakes, IP problems, financial slowdowns, key employees, investor blocking rights, and time. 

Read the blog post: The Top 6 M&A Deal Killers of Any Business Sale Process 

M&A Tips from Brian Dukes 💡

Competition is good in many aspects of life, and it’s super important in M&A. A popular saying in M&A circles is: “If you have one offer, you actually have none.” 

To get the best deal possible for your company, you need competition and broad interest. This drives up the bids. 

How do you get that? Work with industry-specific experts. They know the buyers and have the best chance of finding multiple options for you that are truly a great fit.

For more M&A tips from someone who’s been there, follow me on LinkedIn.

What I’m Listening To 🎧 

Founders (podcast)  

As a podcast host and producer, I know how hard it is to create a weekly show that is informative, entertaining, and engaging. Yet somehow, David Sentra has accomplished all three in his podcast Founders, a weekly show that dives deep into some of the world’s most accomplished entrepreneurs. 

He does it by reading an incomprehensible number of the best-written biographies about famous characters, identifying ideas, learnings, and lessons that can be applied to our own founder journeys.

It should be of no surprise that one of David’s inspirations comes from a favorite Marc Andreessen quote: “There is so much more to learn from the past than we often realize. You could productively spend your time reading experiences of great people who have come before and you learn every time.” 

There’s plenty of entrepreneurial wisdom in every episode, some of which goes deep into the world of M&A and how these founders eventually became the richest and most influential people of their time. 

However, I think the historical deep dive and lessons go far beyond things that I use every day in my professional life. As a lifelong learner, I am resigned to the fact that I’ll never get to half of these books, but love getting summaries that I can go back to over and over again.

I’m far from listening to all 300+ episodes, but here are some of my favorites so far:

• #311 - James Cameron

• #300 - James Dyson

• #293 - Ray Kroc

• #240 - Mozart

• #234 - Sam Walton

I hope you enjoy them!

That’s all for now. 

Tune in next Wednesday for another set of M&A lessons, and have a great rest of the week. 👋

Best,

Brian Dukes, Managing Partner