From working in the garage to selling to Google and Postmates 📈

Welcome back to another edition of The Wise Exit!

In today’s newsletter:

• 3 lessons we can learn from Rishi Mandal, who has had 2 successful exits (1 as a founder and 1 as part of a small team) ✍️

• A brand new episode of the Cashing Out podcast 🎧

• Our round-up of interesting M&A transactions from the past week 💰

Let’s dive in!

When Rishi Mandal was 12 years old, he worked as the “IT guy” for his father’s tech company, Cyras Systems. His office consisted of picnic tables in the garage of his family’s home. That company went on to sell for $2.6 billion in 2000. Young Rishi’s entrepreneurial drive was born.

Fast forward to 2004, when he started working as an astrophysics researcher (at NASA and Stanford University). Within 10 years, he was hired at Google as a product leader, worked for a gaming company called Slide, and then launched his own company, Sosh, a digital concierge service. Google bought Slide in 2010 for nearly $250 million. Sosh was sold to Postmates in 2015 for an undisclosed amount.

In true Rishi fashion, he quickly found another problem he wanted to solve. Along with his co-founder Justin Santamaria (formerly a lead engineer at Apple), he launched Future in 2019, a personal training app that pairs users with a coach who communicates with them through text messaging and calls, and monitors their progress via Apple Watch data.

M&A Lesson 1: Surround yourself with the smartest people, and watch

It started with Rishi’s dad, Shekhar Mandal, who immigrated from India in the 1970s. He first worked the night shift at a 7-Eleven and later as an accountant, but he eventually quit to start Cyras Systems.

Watching him transform into an entrepreneur by building his own company from nothing and selling it for over $2 billion, Rishi learned the ins and outs of building a company that was attractive to buyers.

He sums this up when talking about why he joined Slide: “I made a simple decision to work with the smartest people I could find.” These smart people were Max Levchin and Keith Rabois, who he watched level up their company for sale. “They were exceptional thinkers with unstoppable motors.”

He would later say something similar about watching Larry Page at Google.

M&A Lesson 2: Scale up your product to attract attention

The small team of 3 at Slide built a game for smartphones called SuperPoke! Pets. Their initial plan was to target teenagers, who they assumed would spend the most time in the virtual world they had created. These kids would become emotionally attached to their “pet” and would share this virtual world with their friends.

And it worked. Within the first week, they had 100,000 users.

But to scale up their user numbers for prospective buyers, they had to rethink their demographics. After conducting research on their audience, they were surprised to find that the majority of their users were middle-aged women from the Midwest!

Knowing this allowed them to scale up fast. Within 2 years, SuperPoke! Pets had 30 million users. This piqued Google’s interest, enough for them to pay nearly $250 million for the company.

M&A Lesson 3: Making a plan is useless, but planning isn’t

This piece of advice is from Rishi’s dad. He told Rishi that having a set plan is useless, but the act of planning isn’t. As in, always be in the act of planning for what’s next, without getting stuck focusing solely on the endpoint.

Rishi has used this advice for both of his exits. He credits it for learning to build frameworks while he plans, instead of moving through a set plan step-by-step. This has allowed him to adapt and stay flexible.

Remember: making a set plan is useless, but the act of planning isn’t.

Cashing Out: From M&A Lawyer To Escape Room Mogul - Lessons From My $26M Exit

Raleigh Williams is a former M&A attorney turned entrepreneur. He quit his job as a lawyer to start an escape room business, which has expanded into multiple locations and other entertainment venues.

Raleigh is now the CEO of DealMaven.io, which invests in other businesses and helps founders structure and operationalize their companies to create incredible exits.

In our discussion with Raleigh, we cover:

• Why business owners should trust their intuition when deciding when to sell their companies.

• How to renegotiate business contracts to make them transferable in an acquisition.

• When you're at the goal line, how you should focus on why you’re selling and not quibble over every last dollar.

(You can also get a sneak peek of our conversation with Raleigh on our YouTube channel 📹️ )

M&A News 📰

• Media: LBG Media, owner of LADbible, has acquired US-based media brand Betches in a deal potentially worth $54 million.

• Hospitality: Wyndham Hotels & Resorts has rejected an unsolicited $8 billion buyout offer from Choice Hotels, citing that the proposal is “opportunistic” and undervalues its future growth potential.

• Retail: ECommerce giant, WeCommerce, has acquired leading Shopify application Jagged Pixel Inc. (operating as Uptime) for $400,000 in cash and $600,000 in common shares.

• Gaming: Microsoft has successfully persuaded UK regulators to clear its $68.7 billion acquisition of Activision Blizzard – the biggest deal of its kind the gaming industry has ever seen – and has completed the deal.

• Media: Patreon continues its brand revival with recent acquisition of LA-based livestreaming events startup Moment, likely coming in under $100 million.

• Retail: Toy brand Melissa & Doug has agreed to be acquired by children’s entertainment company Spin Master Corp. for $950 million in cash.

That’s all for now.

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