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The Wise Exit is an open dialogue with fellow founders and former business owners sharing real stories and offering honest advice around selling their companies to some of the top acquirers in the world.
Beyond the entertaining and educational exit stories, host and M&A Advisor, Todd Sullivan is here to help demystify the Mergers & Acquisitions (M&A) process. For example:
- How much is my business worth?
- What is Net Working Capital?
- When should I get a Quality of Earnings analysis
- Should I hire an Investment Banker, M&A Advisor, or Business Broker?
- When do I talk to my Key Employees about a possible transaction?
We hope you enjoy... and learn a few things along the way!
Matt Blumberg - E53 | CASHING OUT M&A PODCAST
00:00:01:12 - 00:00:20:21
Matt Blumberg
If one doesn't work, you have the other. But the thing it really does is it gives you spine. Right, Right. When you know that someone else is there with a reasonable price, if it lets you with confidence, say something that you might otherwise say without confidence. And when you're negotiating a deal, it is all about confidence and tone and body language.
00:00:20:21 - 00:00:23:00
Matt Blumberg
And you know, there's so much of that stuff.
00:00:23:00 - 00:00:48:12
Todd Sullivan
Welcome to the Cashing Out podcast, where our fellow founders share real stories and offer honest advice around selling their companies to some of the top acquirers in the world. My name is Todd Sullivan, CEO of Exitwise, where we help business owners create the exits they deserve. Today, my guest is Matt Blumberg, a former management consultant, a venture capitalist and early employee who helped MovieFone move into the Internet age and get acquired by AOL.
00:00:48:14 - 00:01:14:23
Todd Sullivan
With his well-rounded training, Matt’s biggest professional success came by co-founding Return Path, a company that provides email intelligence solutions for marketers. Matt and his team grew the company to 500 employees and a hundred million in revenue. Along his 20 year journey, Matt was approached four times to sell the business after four failed attempts for various reasons. He finally completed a sale to Validity, a consumer data company, in 2019.
00:01:15:01 - 00:01:41:17
Todd Sullivan
Today, Matt is the co-founder and CEO of Bolster, a talent marketplace to match highly experienced executives with fractional and project based roles to help startups scale. In this episode, Matt shares his insights on how creating better personal relationships with acquirers can de-risk M&A transactions. How to bounce back from a failed M&A transaction, and how building a company with a work life balance in mind can lead to a great outcome.
00:01:41:19 - 00:02:13:16
Todd Sullivan
I hope you enjoyed my conversation with Matt Blumberg. Matt, thank you for doing this. I have been fired up to talk to you because when I've learned about your background, I think you've just been so intentional about the building blocks of expertise and talent that has led you to building this amazing company, having an exit and now off to building another company, starting in consulting, doing venture capital, building a really cool company within a company, helping take it public.
00:02:13:16 - 00:02:14:11
Todd Sullivan
I think if I'm.
00:02:14:11 - 00:02:17:19
Matt Blumberg
Right, I always I joined right after the IPO.
00:02:17:21 - 00:02:37:12
Todd Sullivan
And then starting a company to drive down to $100 million, keeping that for a long time. So I know there's some good stories there and having that great exit and then certainly want to touch on the company that you're running today because that sounds very exciting and some parallels to what we're doing. I just want you to know that when I found out that I could have you in this timeslot, I bumped Mark Cuban immediately.
00:02:37:12 - 00:02:39:17
Todd Sullivan
So thank you for being here.
00:02:39:19 - 00:02:43:06
Matt Blumberg
Yeah, it sounds good.
00:02:43:07 - 00:03:00:08
Todd Sullivan
He he was just on Bbillions, I think last week, he wasn't available, but he was today. And you got the spot, So thank you. So, like I said, I think it is just so cool the way you started this business and built a skill set, really starting in consulting. And I started also in consulting right out of business school.
00:03:00:08 - 00:03:06:18
Todd Sullivan
So I kind of know that training that you went through, maybe you could just start there and build up to the kind of progression of your career.
00:03:06:20 - 00:03:26:16
Matt Blumberg
Yeah, you know, it's interesting. I kind of always wanted to be an entrepreneur. I wasn't one of those, like, child entrepreneurs. Like, I didn't have a lemonade stand, but my dad was was a tech entrepreneur in the early eighties. Wow. You actually And he was in a very early venture capitalist in the late sixties and seventies and I kind of always like that's what I grew up with.
00:03:26:16 - 00:03:40:00
Matt Blumberg
So I kind of had that bug, actually. You could argue both of my grandfathers were entrepreneurs, at least one of them. So I kind of always wanted to do that. But like in when I came out of college in 82, you didn't just go do that, right? It's not like now where you're doing it in your dorm room.
00:03:40:03 - 00:03:56:23
Matt Blumberg
So my first job out of college was in management consulting at a firm called I was actually hired into a firm called Strategic Planning Associates, which then became Mercer Management Consulting, which now is called Oliver Wyman. It was my first couple of years out of college. It was an amazing job. My dad really encouraged me to do that.
00:03:57:04 - 00:04:14:12
Matt Blumberg
Know, I think consulting will give you good breadth and actually it really did. And I always said that that's a job that I should have paid them to give me because I spent a couple of years. I learned a bunch of different industries. I learned a bunch of different problems to solve, a bunch of different analytic techniques and software packages to solve them.
00:04:14:14 - 00:04:39:02
Matt Blumberg
I learned how to create presentations, how to deliver presentations, how to work in a team. I mean, it was just it was nonstop learning. Mm hmm. And very broad based and very big company. And then I had an opportunity that I wasn't looking for. I was kind of thinking about going back to business school, and I got recruited to join General Atlantic Partners, which at the time was a top tier venture capital firm, now a top tier private equity firm.
00:04:39:06 - 00:05:03:23
Matt Blumberg
Mm hmm. And and I jumped on that because VC is a really hard business to get into at any level. And we're there for, you know, the short stint as well. That was also supposed to be pre business school. And that's where I really got a lot closer to that entrepreneurial action. You know, when you're a junior guy at a venture firm, you're doing the deal sourcing, and then if a deal shows up, you're working on the deal and then you don't really get to work with portfolio very much.
00:05:04:03 - 00:05:25:19
Matt Blumberg
Yeah, but I kept having these meetings with entrepreneurs and I kept coming away from them thinking like, Wow, I kind of want to do it. That person's doing much more than I want to do what I'm doing. So I learned a bunch there and I have a great network from there. But after I'd been there for a while, I asked the partner I was working with if he could introduce me to some of the portfolio CEOs, was to go do another short job also before business school.
00:05:25:23 - 00:05:52:04
Matt Blumberg
PS, I never went to business school, so. And I kept thinking I was building toward that. And introduced me to a bunch of portfolio CEOs, and they introduced me to this company, MovieFone as well, which was not in the portfolio, but he and the founder of Moviefone were friends socially. So I had all these interviews with CEOs where they didn't really know what to do with me, Like these were all, you know, startups and like, what do you do with a kid who's been a management consultant, a venture capital associate?
00:05:52:04 - 00:06:08:14
Matt Blumberg
Like nothing. Right. But they all kind of said the same thing, which is like, well, you seem like a smart guy and, you know, have it seem like you work hard and, you know, things. So they all had some version of the same job for me, which is I come in for a year, be like a chief of staff or a special projects person and kind of see where it goes.
00:06:08:16 - 00:06:29:06
Matt Blumberg
So I ended up going to this company. MovieFone which was just post IPO when I joined other very small and small cap company. And it was I always describe it as the Internet before the Internet. So the company was started in the late eighties as an interactive movie guide on a touchtone phone, you know, And so you have to like wind your brain back to there's no Internet.
00:06:29:08 - 00:06:54:00
Matt Blumberg
And the way people got movie showtimes was they opened a newspaper or they called a theater and got a busy signal usually. Yeah. And the way you got tickets in advance was to walk to the theater when the theater was open and that was it. And the way you consumed movie advertising was on television and in newspaper two-page spreads and maybe radio and maybe some billboards.
00:06:54:06 - 00:07:15:02
Matt Blumberg
Yep. So that was the movie business before the Internet and movie found totally, you know, opened the door to blowing that apart. And it's obviously totally different now. But in 1989, you know, these guys had the idea of creating a central branded phone number and an advertising and e-commerce model. There was just no screen associated with it was touchtone phone.
00:07:15:04 - 00:07:40:02
Matt Blumberg
So I had a really interesting job there. My first special project was and this is early’ 95. Tell us what this Internet thing is and should we do something with it? Mm hmm. So I ended up being there for a little over four years and and started and ran the Internet business inside of a small public company that was an interactive media and services company, but was really not an Internet company.
00:07:40:04 - 00:07:59:03
Matt Blumberg
And it was really interesting. I mean, I got to build a business inside of a business. So there were some pieces of it that I owned and some pieces I did known. Hmm. The business obviously scaled tremendously. Once we got it going. It was the dawn of a commercial Internet. So super interesting times to be building. You know, at the time was like a top 50 website.
00:07:59:05 - 00:08:18:14
Matt Blumberg
As a 25 year old, I didn't know anything more much more about it than anyone else knew about it. Yeah. MovieFone was a great brand. If you were in big city U.S. and you know that demographic, you know, MovieFone was on Seinfeld, it was on The Simpsons. It was super fun to be part of and great experience of building that business and launching a product, etc..
00:08:18:14 - 00:08:38:19
Matt Blumberg
And then we ended up selling Moviefone, the whole company, to AOL at the end of ‘98 or beginning of ‘99, when AOL was the company. Yeah, right. I mean, that was today's Google plus Facebook. Yes. And, you know, again, I wasn't a founder, but I was on the executive team and I was part of the deal team. So super, super interesting experience.
00:08:38:21 - 00:09:02:06
Todd Sullivan
That's fantastic. Yeah. There's so many things running through my head. I just I remember. Welcome to MovieFone, right When you picked up the phone and get your theater times. Yeah. I also started in consulting out of business school and and worked on a big AOL, kind of low, low quality ISP and what they should be doing that. And now that you're saying that I believe AOL owned it at the time.
00:09:02:08 - 00:09:15:18
Todd Sullivan
So that's pretty interesting. You got to see that acquisition, right? Build up a product that was complimentary, right. To MovieFone, helping it evolve into the Internet space. And then it was sold to AOL.
00:09:15:20 - 00:09:22:14
Matt Blumberg
Correct. The whole bit, the whole company, the phone service, all the ticketing infrastructure and the Internet and business. So I'd love.
00:09:22:14 - 00:09:28:12
Todd Sullivan
To hear what was your role in that, because you must have had kind of a front row seat if you're building a really important component.
00:09:28:16 - 00:09:44:09
Matt Blumberg
Yeah. I mean, I think everyone on the executive team was involved in some way or another. There were a couple of us that were really on the deal team and, you know, I credit the experience I had in venture capital, too. Like I had been through transactions before serving. They sort of put me on that with a couple other people.
00:09:44:11 - 00:10:15:02
Matt Blumberg
And it was really interesting. I mean, the heyday of the Internet 1.0 was crazy, right? In some ways, I think even crazier than some of the subsequent bubbles and heydays. And it was just it was a fascinating process to go through. The whole thing started and it sort of started and ended in the same place. And it started with my boss, Andrew, who is the founder of MovieFone, sitting at the premiere of You've Got Mail, the Tom Hanks Meg Ryan movie about AOL or that included AOL, Right.
00:10:15:04 - 00:10:41:01
Matt Blumberg
And he was sitting between Bob Pittman, who ran AOL and Barry Diller. And I'm sure I'm getting the details wrong. But the gist of it is, you know, Bob Pittman looked at him and said, we should buy MovieFone if that should be part of the company. And Andrew was a consummate, consummate deal guy. Yeah. And phenomenal mentor. And, you know, I think he said, whatever, we're not for sale anyway.
00:10:41:03 - 00:11:01:17
Matt Blumberg
So AOL ended up buying the company and there was a you know, the process between that movie and signing the deal was negotiating with AOL. It was also negotiating with Diller who either overheard the conversation or was the obvious person to call. It was also a brief negotiation with Yahoo and Microsoft, the other two major players at the time.
00:11:01:19 - 00:11:26:02
Matt Blumberg
And and it was a big deal with this public company buying a public company. It was this the headline price was $380 million or $390 million. But then it was uncapped. So as AOL's price went up and up and up and up, the value of the deal went up. Wow. It closed just under $600 million. And it was a moment in between sign and close, where it got up to like $900 million or $1 billion on one day.
00:11:26:02 - 00:11:52:05
Matt Blumberg
And wow, this was a small cap. Public companies, the stock never moved like the stock was sitting at like four bucks for a year. On a good day, it would be five bucks. And then all of a sudden it was like it closed at $45 that at some point in the middle it was like at $70. And it's an interesting process seeing the negotiation between, you know, playing off a couple of really big companies off of each other or doing that in the public market.
00:11:52:06 - 00:12:03:09
Matt Blumberg
There was some crazy like insider trading accusations, stuff that went on afterwards really, really kind of interesting. And again, like good, good foundation for for me then doing my own thing.
00:12:03:14 - 00:12:19:07
Todd Sullivan
Yeah. I was going to ask, So you've obviously taken a lot of lessons in everything you've done into the company that you're building, but in that particular experience, is there something that that you went through that really informed future M&A that our audience would be, you know, could learn from?
00:12:19:09 - 00:12:41:19
Matt Blumberg
I mean, the most obvious one from that experience was the importance of having a plan B like Best Plan A is made by having the best plan B, So you know how to frame that, right? That the the business school term for it is the bad right, the best alternative to a negotiated agreement. But you know, just having two bidders, multiple bidders on something just makes everything better.
00:12:41:19 - 00:13:02:16
Matt Blumberg
It gives you. So first of all, if one doesn't work, you have the other. But the thing it really does is it gives you spine, right? Okay. Yeah, right. When you know that someone else is there with a reasonable price, if it lets you with confidence, say something that you might otherwise say without confidence. Yeah. When you're negotiating a deal, it is all about confidence and tone and body language.
00:13:02:16 - 00:13:17:06
Matt Blumberg
And, you know, there's so, so much of that stuff that when you know someone else is hanging around, I hope that you're equally happy with. Unless you say no, no. $29 a share. Not good enough. Got to 35 a share. And they know.
00:13:17:08 - 00:13:36:00
Todd Sullivan
It's great advice. I think we've touched on it a couple of times on this podcast in that it's not only that you get a spine and you can talk from a position of strength that you have a potential other suitor. But I think what we see in transactions is it actually allows you to take control over the timeline.
00:13:36:03 - 00:13:38:18
Matt Blumberg
Yes, a little bit better. Yes, yes, yes. Really.
00:13:38:20 - 00:13:58:18
Todd Sullivan
Really important. Right. So your buyer or potential buyers can't really use time against you when you can say, hey, the Indication of Interest (IoI) was due, Letter of Intent (LOI) are due, everybody else is in and you are not. Are you serious about this? And then not in due diligence, right. You can set due diligence time. If if we're going to sign this, you're going to commit to this time frame.
00:13:58:19 - 00:14:19:12
Todd Sullivan
And so I lean less on the confidence that you have in how you speak. And maybe I should think more like that. I think where that comes up the most in our transactions is when somebody makes an offer and we say, Look, our alternative is we're going to keep running and growing an amazing company. We're sitting on a rocket ship and he is more than happy to keep doing this.
00:14:19:14 - 00:14:42:23
Todd Sullivan
Yeah. So you have to make a move here or let's just not waste everybody's time. That's one angle that is. And I think it's a great angle for founders who receive inbound interest. I always encourage them to say, Look, if they're really interested, you say, No, I really appreciate it. Love to have a strategic partnership. We're building a rocket ship here, and this would just be way too early to have this conversation.
00:14:43:05 - 00:14:58:02
Todd Sullivan
It's a really good place to start. And then you really scramble to if I'm going to get serious about this, I need to introduce competition. And there are many ways to do that. I really appreciate that, that confidence in how you talk in that room. And I mean to interrupt.
00:14:58:02 - 00:15:04:10
Matt Blumberg
You say it's a big deal. I think it's a bigger deal than people give it credit because people get like a good deal person knows when you're bluffing.
00:15:04:12 - 00:15:05:15
Todd Sullivan
Yes, absolutely.
00:15:05:15 - 00:15:35:22
Matt Blumberg
Absolutely. The best way to not bluff, is to not bluff. One of the most memorable nights of my career was the night we ended up signing, I believe the night we signed the deal with AOL. Although it might have been signing a term sheet or something. But we actually we were camped out at the company's lawyers offices, at Skadden offices in New York, and we had one of the bidders on one floor in a conference room and the other one on other floor in the conference room.
00:15:36:00 - 00:15:54:06
Matt Blumberg
And the guys I was like, you know, in the back on a laptop or whatever. But, you know, the principals, the founders of Moviefone were literally going back and forth between the two rooms. And I don't think they ever said like, hey, the other guys are downstairs. It was pretty clear that they'd like disappeared. And then they came back with something else.
00:15:54:08 - 00:15:56:04
Matt Blumberg
And I just think that made a big difference.
00:15:56:06 - 00:16:12:03
Todd Sullivan
That's awesome. I mean, that reminds me of like, cop shows, right, where they got criminals in or who's going to fold first in your buddies. He's. He's spilling the goods. You better come clean. Yeah, right. Oh, what a what a fantastic tactic. So anything else that you would cause? I'd love to get to the company.
00:16:12:03 - 00:16:37:22
Matt Blumberg
Yeah, I don't know. That's. That's probably the. Well, there's another one which comes up again, and it is a lesson that I guess I learned and then forgot. So I'll foreshadow where we're going, which is the importance of knowing the principle, like the direct personal relationship that my boss had with Pittman, with Diller is what got it, not just what got it done, but what got it done fast.
00:16:38:00 - 00:16:57:03
Todd Sullivan
Yeah, incredibly important because you can align right the intention. Everybody is on the same page. Things are prioritized when you know the people involved. Yeah, absolutely. Well, let let's jump in. Right. So you have that transaction and now you're trying to figure out what to do next and obviously landed on something fantastic.
00:16:57:05 - 00:17:19:00
Matt Blumberg
So yeah, I mean, I felt like I was ready to go start my own thing again. Like now you start your own thing when you're 19 years old. But, but I had had, you know, had been three jobs about two years out of college and, you know, had built a business, etc.. So I was kind of ready to start my own thing and spent a bunch of months after after we closed the deal with AOL and after I left and transitioned out, I spent a bunch of while thinking about like what I wanted to start.
00:17:19:00 - 00:17:41:19
Matt Blumberg
I was doing consulting at a bunch of places, like just exploring different business plans, talking with different people. And the one consistent theme that I had was I really wanted to build a business. I really wanted to build a different kind of workplace and a different kind of company. And again, you have to wind the clock back a little bit to 1999.
00:17:41:21 - 00:18:02:17
Matt Blumberg
Most knowledge economy companies, which is not even a term you hear anymore, right? But most companies that were like that were still managed in a very old school command and control way. So consulting was like that. And banking was like that and Venture was like that. And, and tech companies were like that and media companies and MovieFone was no different.
00:18:02:19 - 00:18:29:03
Matt Blumberg
And, you know, all these companies had like the plaque on the wall that said, you know, our assets walk out the door every day at 5 p.m.. So they understood at some level how important people were to the business, but they didn't really know what to do with that because no one trained them right. Like management training when those people grew up was not about culture and values and, you know, freedom and flexibility.
00:18:29:03 - 00:18:58:05
Matt Blumberg
And it just just was like that. So I had a real driving force to start a business so that I could prove out a model of a different workforce, a different way of working and to some extent, it didn't matter to me what I did take. The range of things I was looking at was very wide. The thing I settled on, which is the company that became Return Path, was something in email marketing and analytics, and that was a space that I knew really well because I just spent four, four and a half years running this web business for for Moviefone.
00:18:58:05 - 00:19:18:06
Matt Blumberg
And part of that was I can email, email service that we watch called Movie Mail. So I knew a lot about the power of commercial email and also some of the gaps around commercial email and opportunities. There. So, you know, working with a group of people started Return path and at the end of 99, you know, and then it was 20 years later and it was done.
00:19:18:07 - 00:19:28:07
Todd Sullivan
So yeah, I mean that's a long time to have a company. But you hinted at something which I had read about, which was multiple co-founders, right, in this situation?
00:19:28:09 - 00:19:33:18
Matt Blumberg
Well, my current company, Bolster, has eight founders. Oh, wow. So that may be the thing you're thinking about.
00:19:33:20 - 00:19:34:17
Todd Sullivan
That's rather different.
00:19:34:17 - 00:19:34:23
Matt Blumberg
Story.
00:19:35:03 - 00:19:37:02
Todd Sullivan
This is one one other partner to start.
00:19:37:02 - 00:19:55:07
Matt Blumberg
Moviefone You know, with a partner and with some other people who were idea kind of business with us and and then we did a foundational acquisition very early on in the company's life. And the guy who started that company, we also ended up calling him a co-founder. That's all about return path to Bolster, which is the company we started in 2020 after we sold.
00:19:55:09 - 00:20:08:18
Matt Blumberg
There are legit eight founders. That's a different story there. But but yeah I mean Return have had at least one kind of legit day. One co-founder Jack Sinclair who great and one of my founders of Bolster as well.
00:20:08:20 - 00:20:34:19
Todd Sullivan
Awesome. Okay so then the question doesn't really apply. It's two co-founders. You guys are going to go build something amazing. You have an experience in this commercial email and potentially the problems that are associated with that. In the market. You go from kind of 0 to 100 million over 19 years, and I know there were multiple times where the door was knocking and people wanted to buy this thing.
00:20:34:19 - 00:20:44:07
Todd Sullivan
So can you tell me about that decision having gone through them and understanding it, like, why do you turn them down? What are those processes look like? That would be great.
00:20:44:13 - 00:21:06:03
Matt Blumberg
Yeah. So it was a long journey and there are lots of decision points along the way that that I can talk about the first one, which is funny, which I forgot to mention to you when we were doing the pre-game, you know, starting a business in December of ‘99, which ended up being, you know, depending on how you count it, five or ten months before everything blew up in the markets.
00:21:06:03 - 00:21:35:14
Matt Blumberg
Right. And it was such a crazy time to start a business that one of the people that was involved early on in in the founding of Return Path said to me, without kidding, as we were starting the company, he said, you know, I think you should hire a writer to follow you around and take notes and you're going to write a book called Ready, Set, Exit because you're going to sell this company in 5 minutes.
00:21:35:16 - 00:22:01:14
Matt Blumberg
And like the world looked like, Yeah, but yeah, I can point to like actually several things that happened along the journey from there. So one, we had our first offer to sell the company in the middle of 2000 to the company was pre-product. Wow. We had raised money Angel, Angel Money, Big Angel round and, and we had an offer from DoubleClick to buy the business.
00:22:01:14 - 00:22:22:04
Matt Blumberg
Sure. And it seemed crazy to me because we didn't have enough of product and market and Doubleclick was highly acquisitive. I mean they were the big company ad tech and and we said no, it's kind of interesting. I think if we had said yes, we would it would have ended up being worth nothing because then everything crashed right afterwards and the stock went through the floor.
00:22:22:04 - 00:22:40:07
Matt Blumberg
They had a lot of cash and the business did very well. But their stock price was was nothing for a while. And we turned that into our first institutional financing. So we said, No, we're not interested in selling the business, but we'd like to have a strategic investment for you. So that was one that kind of the first time we said no, we pivoted it into a venture investment.
00:22:40:09 - 00:22:41:17
Todd Sullivan
Great.
00:22:41:19 - 00:22:58:12
Matt Blumberg
And it's so long ago now, I can't even, you know, it was like a bit emotional decision at the time, even though it wouldn't have been worth a ton of money. You know, in the long run, it wasn't if the headline price wasn't wasn't even that great. But we just felt at the time like we haven't even built anything yet, like why would we sell the business?
00:22:58:12 - 00:23:03:10
Matt Blumberg
Like that was sort of the. No, but then it was no, but by the way, write us a check for $8 million.
00:23:03:12 - 00:23:26:01
Todd Sullivan
Can I ask you about that? Because I think a lot of people, a lot of listeners, fellow founders, are going to say, hey, how did you do that? How did you turn an offer into an investment? Like they clearly want to have ownership right of the business. They like control ownership. This allows them to have minority ownership, but it's a totally different game and you got to make the decision right.
00:23:26:01 - 00:23:37:16
Todd Sullivan
An acquirer who could be seen as very strategic to you is now going to be on your cap table. So do you remember what was going through everybody's head of how you turned it? Turn the table and the decision you made?
00:23:37:22 - 00:23:48:17
Matt Blumberg
Yeah, I mean, what I said was, look, I think we'll be a lot more valuable to you if we get to serve everyone in the industry and not just you. Okay? It was something along those along those lines, and they agreed.
00:23:48:20 - 00:23:53:01
Todd Sullivan
And then they were on your cap table. Do they stay on your cap table for the 19 years?
00:23:53:02 - 00:24:14:19
Matt Blumberg
Oh, no. I mean, does it they were unacceptable for a while. And then DoubleClick itself went through all kinds of all kinds of challenges as a public company based on, you know, stock price and changes in the Internet market and ad market or whatever. And they got taken private by Hellmann and Friedman. And then it got acquired by Google.
00:24:14:21 - 00:24:35:18
Matt Blumberg
And somewhere in the mix of all of that, their stake had been diluted tremendously because after they made the investment, they never participated in a follow on round. Okay, which is a problem that you have frequently with strategic investors. And so at the end they didn't own very much and then we bought it back from them. And I can't remember whether I think we bought it back from Google after Google bought the company and whatever year that was.
00:24:35:18 - 00:24:55:16
Matt Blumberg
So they were for the first couple of years now they were on the cap table and they were a strategic partner and a reseller and we had a meaningful, a decent business relationship and actually, you know, some some great relationships that I have that continue to this day came from that, including Kevin Ryan, the CEO of DoubleClick. Jeff Epstein was the CFO of DoubleClick.
00:24:55:16 - 00:25:13:10
Matt Blumberg
He ended up as my audit committee chair return path. One of the guys that was our client there, Ken Takahashi, worked at Return Path for many years after that and is one of my co-founders at Bolster. So it was a really kind of formative deal and set of relationships, but didn't amount to a lot in the end as a deal itself.
00:25:13:12 - 00:25:24:06
Todd Sullivan
Got it. So, okay, so that was the first time your approach, which is, you know, awesome stories out of it and I think really good learnings. Okay, But you're approached multiple times while you're in this business.
00:25:24:07 - 00:25:43:18
Matt Blumberg
Yeah. So, so if you fast forward from there like 13 years and at that point we had a pretty substantial business. I can't remember, I call it $50 million and ARR and had pivoted a couple of times along the way to get there. We were approached by a company called ExactTarget, and ExactTarget was the largest company in the email business.
00:25:43:20 - 00:26:06:05
Matt Blumberg
So they were sort of kind of what DoubleClick had been in 2000. They actually became an ad and we were very good friends with the ExactTarget guys. They were our biggest partner and they had just gone public. And Scott Dorsey, their CEO, had orchestrated a masterful IPO with his team. It was great company and they were our biggest reseller and he offered to buy us.
00:26:06:07 - 00:26:25:05
Matt Blumberg
And I we said, no. Scott to this day, as a very close friend, he went on to start High Alpha, which is a major investor in Bolster. So he's on my board now. So he and I, you know, remained very close over the years. But at the time I said no to that offer and in retrospect, that was a mistake and it was a mistake.
00:26:25:10 - 00:26:47:03
Matt Blumberg
And, you know, these things are easier in retrospect. We ended up I think we would have gotten much more economically out of selling the company at $50 million in revenue than we did out of selling it when it was $100 million in revenue based on market conditions, based on what happened to ExactTarget and its stock and based on the multiple that we got based on our growth rate and profitability and everything else.
00:26:47:05 - 00:27:10:18
Matt Blumberg
And then it took us seven more years to get you to get to the end. So that was a little problematic in the rearview mirror. But at the time we had just come off of our best year, like our highest growth year, and we were just cruising. And the offer we got, which again in the rearview mirror, would have been tremendous.
00:27:10:18 - 00:27:35:06
Matt Blumberg
But we felt like it was not fully value. We said the thing you said a few minutes ago, which was, Hey, we're happy to just keep doing our thing. Yes. And the number that we had in our mind that was a take out number was just it was too high. So didn't have happen. And we remained friends. They remained a great partner, but but that was that was a no that was in the rearview mirror.
00:27:35:06 - 00:27:39:03
Matt Blumberg
A mistake where the first one at DoubleClick was probably not a mistake.
00:27:39:05 - 00:27:54:09
Todd Sullivan
So, yeah, let me tap into that. So what's interesting is that $50 million of ARR, you are clearly making money, right? You're you said you were profitable, but that's a really nice lifestyle that you're having as an entrepreneur, right? Yeah.
00:27:54:11 - 00:28:02:06
Matt Blumberg
I'm pretty sure we were not profitable, but it was high enough growth that it was, you know, we were playing that game.
00:28:02:08 - 00:28:22:17
Todd Sullivan
Got it. I misunderstood. So what's interesting is you talk about when you eventually exit is seven years later, really hard to predict what is the market going to do, how long is it going to take to actually, you know, reach that that moment when you have $50 million of ARR and somebody is making a bid on your business and you have a growth rate?
00:28:22:19 - 00:28:42:01
Todd Sullivan
We like to tell our founders that, you know, when you're thinking about your company and in terms of a nine inning baseball game selling in that fourth inning when you are winning, what you got runs on the board, the heart of the lineup's coming up. So there's just a lot more promise sitting there in the company. The buyer is buying the future of the business, right.
00:28:42:01 - 00:29:00:22
Todd Sullivan
They want to buy getting you from $50M to $100M. And so that's one side of it, right? They should be valuing it. It's a great time to sell a business. But but also in that seven years, I don't know if you had to take on more dilution, but your return on investment right. Is a moment in time versus seven years later.
00:29:00:22 - 00:29:15:01
Todd Sullivan
And if you take on more capital, you're just your share is getting smaller and so the hurdles are getting bigger. So I think our founders just need to go in eyes wide open of, you know, when is the right time to sell And nobody has the crystal ball.
00:29:15:03 - 00:29:31:07
Matt Blumberg
Nobody does. But look, I do a lot of CEO mentoring and I do a lot of exit coaching in particular. And it is one of the things I push people on pretty hard if they have a real offer, like a material offer in front of them, that's good. That's going to make a difference in their life. And they're not running Facebook, right?
00:29:31:09 - 00:29:41:20
Matt Blumberg
Yeah. Zuckerberg made a brilliant move, not selling for $975 million, right? Totally. How many of us run Facebooks, like one in10,000?
00:29:41:22 - 00:29:58:09
Todd Sullivan
I think a lot of it is. I never want to be in the position to tell an entrepreneur they should sell a business, right? You can only give your perspective and from experience and what you think the market is saying and the buyers are saying. But I think it's a lot of kind of emotional preparation and financial preparation.
00:29:58:12 - 00:29:59:00
Matt Blumberg
Yes.
00:29:59:04 - 00:30:17:13
Todd Sullivan
What do you need? What do you really want to do with the rest of your life? Matt I'm guessing you're having a blast building a $50 million ARR company. You had a goal of building a different kind of company, treating people differently. You're probably having a blast. And I think people put too much emphasis on on that top dollar amount.
00:30:17:13 - 00:30:30:13
Todd Sullivan
It's like it's your life. How do you want to enjoy those years of your life? And when you get it, just if you can get an understanding of that before you enter these conversations, you know what you can say yes to and you know what you should say no to.
00:30:30:14 - 00:30:48:16
Matt Blumberg
So it's so right. And it is one of the things I coach entrepreneurs on when they're thinking about a sale or approached about a sale. And, you know, there was a big component of that for us at the time, which was, hey, we're doing really well and you're not fully valuing the company. Fine. Turned out probably not right, but fine.
00:30:48:18 - 00:31:07:23
Matt Blumberg
But the other part was like, Hey, we love what we're doing and we've built this unbelievable company and culture. And I can't imagine not doing that. Right, Right. And what I tell people now, now, you know, I have the benefit of more years and experience and more companies is if you like that one, you'll like the next one even more.
00:31:08:03 - 00:31:23:08
Matt Blumberg
Mm hmm. So but it is it is very, very hard for a founder who has scaled a business and loves what they do. They love the people they work with. And but you do have to think like, yep, there's a chapter after this. And that chapter can be even better if you are mad.
00:31:23:08 - 00:31:41:03
Todd Sullivan
I gave that advice to a really good friend. He had a $12 million offer for a really early stage company backed by top venture firms know Kleiner and Sequoia, and it's a $12 million offer to take him out. And he comes to me, he said, What do you what do you think I should do? I'm like, Man, take the money, change your life.
00:31:41:07 - 00:32:00:02
Todd Sullivan
This is a career path. You're going to do it so many more times. You're going to enjoy the next one even more, Right? Go through the experience and you know, change your life. Within 18 months, their product at the acquiring company became the name of the product, the entire product and worth $1,000,000,000. Right? So my friend is like, Hey, thanks a lot.
00:32:00:02 - 00:32:25:01
Todd Sullivan
I appreciate it. You know that advice he did go on in 18 months later, sell the next company to Facebook 6 hours before they went public. So you can imagine what that turned into. But so my timing, my crystal ball is never right. But this idea that you can change your life and you're going to enjoy the next one like this is what's in us as entrepreneurs and you're going to love the next one, you know, just as much.
00:32:25:01 - 00:32:27:13
Todd Sullivan
I agree. I love that statement.
00:32:27:15 - 00:32:28:17
Matt Blumberg
That was the second.
00:32:28:17 - 00:32:30:07
Todd Sullivan
That was number two. That was number two. Okay.
00:32:30:12 - 00:32:57:22
Matt Blumberg
Now was only like two, maybe two years after that. And there's a very specific lesson that comes out of that. So we had just taken on growth equity capital from a larger later stage, kind of typical private equity investor, although it was a minority investment. And within 45 days of their of their investment, we had not a hard to offer but a very significant inbound interest and a very large number.
00:32:58:00 - 00:33:22:22
Matt Blumberg
And I don't we didn't end up pursuing it a ton. And I'll tell you why in a second. I don't know if it would have ended up coming to pass or not, but but I remember very distinctly the big board conversation we had about this. Remember, these guys had put capital in 45 days prior and they would have made three checks on their investor, two, not three, but like 2.5 X on their investment.
00:33:22:22 - 00:33:47:01
Matt Blumberg
And the IRR obviously is incalculable, right? Yes. Yes. And the partner who is on my board basically said, you know, my our firm would view this as a disappointing outcome. Oh, my gosh, yeah. And look, I'm a big boy. I take responsibility for my own decision there. But that was influential. Yeah. And and it's stupid. It's unbelievably stupid That that that really that's a disappointing.
00:33:47:03 - 00:34:21:13
Matt Blumberg
That's not a disappointing outcome. You are wrong. Yeah, right. But that was meaningful. And my lesson coming out of that is there are a lot of voices in your head where especially if you take in multiple rounds, capital at multiple valuations and you have early stage guys that are making money no matter what you do and later stage guys with different hurdles, etc. And I see this all the time that the last capital, the end is usually the least excited about the deal and it's really hard as a founder to balance out all the voices in your head that have economic interests, and you do need to listen to all of them, just like you
00:34:21:13 - 00:34:37:10
Matt Blumberg
need to listen to all the stakeholders. But then you kind of need to block them all out. Just make a call and someone that says they're going to be disappointed in a, you know, a2x3 tax return after 45 days is literally is just wrong. And they're giving bad advice.
00:34:37:12 - 00:34:55:15
Todd Sullivan
Yeah, we get we get this quite a bit where the loudest voice in the room in the boardroom tends to be an investor. And if the company is doing really well, they see that opportunity to say, I want more of this company, I want to dump more of our dollars into our winners. Right? Their incentive is not aligned with necessarily with the founder.
00:34:55:15 - 00:35:13:06
Todd Sullivan
We have founders where we say, look, if you do this, if you take another $50 million, your choices are like, there are three acquirers out there can actually buy you or you're going public. Is that do you think that's the person that you want to be? Can you do that? Your ROI now? Forget about what those guys are saying.
00:35:13:06 - 00:35:30:10
Todd Sullivan
If you have the ability to to make that decision, you make the decision for you and you know, you you have a fiduciary responsibility for all shareholders. I understand that. But when you're talking about a win of that magnitude for everyone, you're not you can't make a wrong decision. So I appreciate you sharing that.
00:35:30:14 - 00:35:47:08
Matt Blumberg
Yeah. No. And it's really, you know, something that founders always have to keep in mind is you have one play. Yes. Your investors have 100 plays in their portfolio and, you know, they may be willing to take a risk with you that you don't need to take with you.
00:35:47:10 - 00:35:59:04
Todd Sullivan
That's got it. So well said. I mean, that just really hits home for me. They're just coming from a you know, they're playing on a different field. Okay. So you go you finally go through it. Is it like 2019 at this point?
00:35:59:04 - 00:36:22:12
Matt Blumberg
No, no, no. There's one more. You know, it's funny, in 2017, we had an inbound offer and we and we were really ready to sell at this point. Like the business had gotten bigger, it had gotten profitable, but growth had slowed down. Okay? And we had an inbound offer from a large company in the space that was private and looking at going public.
00:36:22:14 - 00:36:55:07
Matt Blumberg
And we were we were really ready to sell the business at this point. So we engaged a banker. We contacted some of the large public companies in the space and we got one of them engaged and and got a much better counteroffer from them and worked that process really hard and really effectively. Like Me and the banker going back and forth with the different people we knew at the company, and we had an offer that we were really happy with, like really, really happy with and signed the term sheet, excruciating diligence process.
00:36:55:07 - 00:36:57:18
Matt Blumberg
I mean, this is a large cap public company, so.
00:36:57:18 - 00:37:00:11
Todd Sullivan
60, 90 days like how long?
00:37:00:13 - 00:37:04:00
Matt Blumberg
Simpson in there? Yeah, Yeah. Okay. I can't remember exactly what it was, but it's brutal.
00:37:04:00 - 00:37:04:19
Todd Sullivan
It's tough stuff.
00:37:04:20 - 00:37:25:05
Matt Blumberg
Yeah. Yeah. And, you know, to the point where we had, like, we were we were probably four or 500 people at the company and we had like 75 that we're working on the diligence, right? Yeah. Not a secret that this is going on and, and we had the, we had everything that we had, the diligence was done and the legal documentation was done.
00:37:25:07 - 00:37:49:09
Matt Blumberg
They had had sign off on their side. Our board approved the deal and to where we're at like the one inch line in the football metaphor. And if we're not, not that inside the red zone, we're like right there. Yeah. Press release written all hands meeting scheduled. Yeah, stuff delivered from the buyer to the office like the swag was in the office.
00:37:49:09 - 00:38:09:03
Matt Blumberg
Yeah, the cupcakes were in the office. Champagne was in the office. And our board had literally DocuSign’d the deal. Oh, wow. So, I mean, like, whatever definition you have, red zone, 11th hour, like this is the 11th hour, 59th minute, 59 second. And they said no.
00:38:09:05 - 00:38:10:09
Todd Sullivan
What changed?
00:38:10:11 - 00:38:38:08
Matt Blumberg
They went through their final normally perfunctory meeting. Mm hmm. Of all the key stakeholders and and my take on what happened, I was not in the room the the champion for the deal. The business owner for the deal was not present. He was on vacation. He had one of his lieutenants come but a more junior person than everyone else in the room.
00:38:38:09 - 00:38:44:03
Matt Blumberg
The rest of the executive team. Okay. The GC never really liked the deal.
00:38:44:05 - 00:38:44:23
Todd Sullivan
Okay.
00:38:45:01 - 00:38:52:00
Matt Blumberg
And the GC was concerned about data privacy. We had a lot of data. The company didn't have a lot of data.
00:38:52:01 - 00:38:54:05
Todd Sullivan
This is this is the buyer's general counsel.
00:38:54:08 - 00:38:55:09
Matt Blumberg
Buyer’s general counsel.
00:38:55:09 - 00:38:56:09
Todd Sullivan
Yes. Okay.
00:38:56:11 - 00:39:20:19
Matt Blumberg
And and buyers general counsel looks at the CEO and says, thumbs down and our champion was in Greece, probably asleep. Yeah, and a middle of the night. I'm not involved The more junior person in the room like powerless to deal with that and they pulled the plug.
00:39:20:21 - 00:39:30:13
Todd Sullivan
Oh, my gosh. That's that's crazy. I, I know we're our average transactions around that $50 mark. We certainly have them over $100 million. I know this was a big.
00:39:30:13 - 00:39:32:17
Matt Blumberg
100 million. Yeah. Yeah.
00:39:32:17 - 00:39:56:19
Todd Sullivan
And so, you know, to me, I see the relationships between investment bankers and M&A attorneys really on the sell side give a little bit less visibility of what's behind the curtain on the acquiring side. But, you know, my only advice in this situation is that founders who are selling their businesses need to take control of their advisors. At these points, you're making decisions, right?
00:39:56:19 - 00:40:06:17
Todd Sullivan
And you've got to force those decisions and not let people disrupt at the goal line like that is incredibly frustrating. I know. It's all I know it's the buyer, right? So yeah.
00:40:06:18 - 00:40:12:13
Matt Blumberg
This was the buyer and we like we had and it was internal with the buyer. It wasn't their advisors.
00:40:12:15 - 00:40:14:07
Todd Sullivan
It's general counsel. You're right. Yeah.
00:40:14:08 - 00:40:37:14
Matt Blumberg
It was not an advisor problem at all. We had great advisors on it and you know, the mistakes coming out of it. To go back to my MovieFone story, I did not have a personal relationship. The CEO. There you go. And I did with the business owner, although it wasn't a great and deep one, but I did. But then he and he didn't it wasn't his decision.
00:40:37:17 - 00:40:53:04
Matt Blumberg
At the end of the day. It was someone else's decision. And and that was really the biggest problem. I think if I had had that personal relationship and there had been that emotional commitment to do the deal at that level, I don't think blown up.
00:40:53:06 - 00:41:08:15
Todd Sullivan
I think you're I don't know. But it is very common right in these processes where you want the two CEOs to get along right. You want to create that a little bit of emotional bond, understand the the field, the culture side of it and that.
00:41:08:17 - 00:41:24:18
Matt Blumberg
I had asked along the way like I think I should meet. Yeah I think super nice here. Sure sure that I am still angry at him and I never met him and I knew that was a potential problem. I just didn't realize it was going to be a fatal problem.
00:41:24:23 - 00:41:34:02
Todd Sullivan
It's a double whammy because they know it's coming and all of that due diligence. Time is time taken away from their day job, right of run in the business right.
00:41:34:02 - 00:41:55:03
Matt Blumberg
And then what happened is a handful of key people left. That's brutal. Yeah. It got to the point where I had told a bunch of people they were going to be out of a job. Mm. I had made people offers of what their new comp was going, so everyone was getting a raise, everyone was getting cashed out, everyone was getting restless in a public fire.
00:41:55:05 - 00:42:09:13
Matt Blumberg
Some people were getting fired. So everyone was either psyched to go forward in one direction or new or were already looking for a job. So you get to that point and it blows up in a bunch of people leave, you know, and yeah, with we had you know, had hadn't quite been on the we all for a couple of quarters.
00:42:09:15 - 00:42:27:08
Matt Blumberg
So it took us two more years to recover and sell the business. So at that point and at that point we did the thing that you know, you're not supposed to do, which is sell the company. Right. Everyone says the best deals are the ones where you're bought. Yeah, you're sold. And all the other ones that we had entertained over the years were ones where a buyer came to us.
00:42:27:10 - 00:42:43:04
Matt Blumberg
Sure. And finally, after 19 and a half years, we're like, All right, we're just gonna run a process and see where it goes. And we had a perfectly good outcome and it worked very well, and I'm happy to talk about that as well. But it was but it was a sell the company. It was not I someone came to buy the company and that was that was a big, big challenge.
00:42:43:09 - 00:42:52:17
Todd Sullivan
Matt Can I ask on the one that was successful, did you bring all of these 70 more people under the fold to get that done, or was that maybe a lesson?
00:42:52:22 - 00:43:00:18
Matt Blumberg
No, I mean, we didn't have a choice the first time around, but the second time around we didn't need to. It was a totally different construct. There were like 20 of us in it or something.
00:43:00:20 - 00:43:24:02
Todd Sullivan
Got it. Got it. Yeah. I went through something similar, much smaller scale, but told all the employees, you know, I'll continue to pay you for a period of time, but you got to find new work because, because you guys are not being brought across the goal line. I moved to Silicon Valley, had my desk at the acquire or signed the documents, and they canceled it in a board meeting in August of 2008 when their board said, The world is.
00:43:24:06 - 00:43:25:10
Matt Blumberg
The world, that.
00:43:25:12 - 00:43:33:15
Todd Sullivan
The world is falling, cancel everything. So I got to a goal and once before and realize that similar pain. So yes.
00:43:33:21 - 00:43:36:18
Matt Blumberg
Obviously I had a financing blow up in August. So it was.
00:43:36:18 - 00:43:56:20
Todd Sullivan
It was a tough time. Right. But coming back your tail between your legs with very few employees left. Right. Because you encouraged them to find new work. It's tough, right? All right. So anything you want to talk about or one that was successful, you obviously had some lessons learned. But what what made it happen ultimately?
00:43:56:22 - 00:44:20:01
Matt Blumberg
You know, these things always have a little bit of luck and timing to them, which is fine and have that. But, you know, so reflecting back on the whole of this conversation, the biggest thing is that we had we had multiple options. Mm hmm. And we were able to appoint you made early on, which I didn't make. What we did is we didn't just turn it into the best offer from the best buyer.
00:44:20:03 - 00:44:31:20
Matt Blumberg
We controlled the process and the timing, and we said, yep, you know, we looked each other in the eye and I said, I will do this deal with you, but it will be done in 30 days. Mm hmm. And it was.
00:44:31:22 - 00:44:32:08
Todd Sullivan
That's great.
00:44:32:14 - 00:44:33:05
Matt Blumberg
Yeah.
00:44:33:07 - 00:44:47:06
Todd Sullivan
Matt, I want to be respectful of your time. And I do want to hear what you're doing right now, because I think it's. It's absolutely a needed service, and. And it's the right time to be doing it, too. Can you talk a little bit about your current company?
00:44:47:08 - 00:45:22:01
Matt Blumberg
Yeah. So Bolster was started by eight of us who had been on the team together. Return Path. We started it early 2020, right at the beginning of COVID. And we you know, we had had this this 20 year journey of building and scaling ourselves as executives and building and scaling building and scaling our business. And we had, I would say, the last ten years of the 20 years we had spent a lot of time mentoring and coaching other founders and CEOs and CXOs, and we decided we wanted to start another business together that whose mission was to help founders and CEO scale their businesses.
00:45:22:03 - 00:45:50:10
Matt Blumberg
So, I mean, we're very much a for profit business, but it was really the origins were very like give back the startup community a little bit. Sure. Which sounds a little bit like what you're doing as well. Yeah. And so we started Bolster as a marketplace for executive talent. So two sided B2B marketplace model. And we started and what we have done for most of our journey until recently was a marketplace for what we called on-demand executive talent.
00:45:50:12 - 00:46:17:02
Matt Blumberg
So helping startups and scale ups find senior executives for anything other than full time roles. That was V one or two. As we've expanded into full time, which I'll talk about a second. Sure. But but the idea was very much that, you know, early stage and growth stage companies need access to executives for projects, for fractional roles, for interim roles as advisors, as functional mentors, as coaches and as independent directors.
00:46:17:04 - 00:46:41:17
Matt Blumberg
And there's really no like kind of central anything for that. I mean, you know, LinkedIn is a behemoth for finding anything and finding nothing. But but that was Bolster 1.0, and we had a really, really good first couple of years. We accumulated a couple thousand CEOs as clients. We accumulated ten or 15,000 senior executives as members that we invited in to the network, as was kind of lightly curated.
00:46:41:19 - 00:47:02:13
Matt Blumberg
And we've probably placed 300 people in fractional roles or in board seats. And and I think really, really having very positive impact on and on clients. And a couple of things happened maybe about six months ago. One was we realized that that business was going to take a long time to get scaled and that business was a marketplace model.
00:47:02:18 - 00:47:20:04
Matt Blumberg
So we got a percentage of, you know, whatever someone was hired for. But when people are getting hired for projects, there's not a lot of money changing hands. So getting a small percentage of not a lot of money is even less money. And it's a very transactional business. It's infrequent transactions and it's kind of small dollars. So we love it.
00:47:20:04 - 00:47:53:07
Matt Blumberg
It works really well. We actually deliver that profitably on a marginal basis and very efficiently. So we're still doing that and leaning into that. But we also had a lot of clients come to us and ask us if we could do full time search work for them. And one of the things that we were thinking about when we started this, the marketplace for fractional executives, was that, you know, there needed to be alternatives to a full time search where, you know, either you hire retained search firm and spend a fortune on it, or you email a few friends and ask who knows someone and maybe something shows up.
00:47:53:09 - 00:48:17:23
Matt Blumberg
So we had that construct for the beginning of creating, you know, kind of a low to mid touch type of marketplace, to be more efficient and also more cost cost effective. But we weren't doing full time and now we're doing full time. So that's sort of our big news in the last couple of months, done a small acquisition that gives us a lot more heft in machine learning, which is a really important part of making the search process more efficient.
00:48:18:01 - 00:48:45:13
Matt Blumberg
You're always going to need humans in the middle of executive search. But but data and data science can can do a lot of things that right now people are doing off the top of their head or with spreadsheets. And then we're bulking up the team and adding some really, really top notch professionals from the recruiting world who can add the human element where it needs to be added, but also really take advantage of of AI and of our platform in general.
00:48:45:13 - 00:49:04:02
Matt Blumberg
And we're doing a great job for clients here. We do full time searches for a small fraction of what they be paying a search firm. We deliver the same candidates much more quickly. And, you know, we expect we're going to build a platform that's a very meaningful part of the of the startup and growth ecosystem.
00:49:04:04 - 00:49:22:09
Todd Sullivan
Matt, what I love about it is that I think of our early stage founders and certainly my experience, how do I bring in somebody with that kind of talent? You know, the expense is enormous. And then that commitment to a full time employee, right? You know, you don't want to like, hire and fire people, right? These are people's lives.
00:49:22:11 - 00:49:45:13
Todd Sullivan
And I could almost see myself as starting a company saying I will pay for one full time person, but I want to almost be able to bring them in, in and out. Right. Chief Marketing Officer a head of AI I know you're finding your way into the right business model, but the need seems to be very, very obvious. You know, we're similar in the not where you called it kind of low or middle touch.
00:49:45:19 - 00:50:08:15
Todd Sullivan
We're really high touch, right, bringing the best M&A experts in the world. But we're like the coach of that team and thinking about how do we potentially lower the cost burden by having a lower touch model. So it's really interesting. We got to stay connected. I want to see how that continues, but I really appreciate you being here.
00:50:08:17 - 00:50:20:01
Todd Sullivan
This is fantastic. There are so many lessons in each one of those M&A experiences is I know people are going to get a ton out of this. Is there is there any kind of last words of wisdom that you like to impart?
00:50:20:07 - 00:50:48:14
Matt Blumberg
Yeah. So, look, one piece of advice, you know, I feel like I've dispensed lot of advice here. All those things were important. Multiple matters. And Plan B is important. Personal relationship is important. Getting the timing right is important. Not falling in love with your own business is important. All of those are important. But the one thing we didn't have a chance to talk about that I feel very strongly about is that founders need to spend real time and energy preparing themselves and their loved ones for an exit.
00:50:48:16 - 00:51:07:23
Matt Blumberg
And this is advice that was given to me by one of my friends and mentors actually one of the co-founders of Moviefone, who I've stayed very close with over the years. He's now been a CEO of multiple companies, and he went through an exit years before I did. And and said that he regretted not bringing his kids along for the ride.
00:51:08:00 - 00:51:26:19
Matt Blumberg
And his kids were teenagers at the time, and my kids were teenagers when I sold out. When I sold Return Path, I said, What do you mean? And he said, Well, they really didn't like they didn't really know what I did every day. And like, there image of me was that I was the company and the company was me.
00:51:26:21 - 00:51:42:09
Matt Blumberg
And we all had the T-shirts and the swag and like that, you know, they sort had this, this cartoonish version of the whole thing. And when I told them that we had sold the business, we were selling the business. The next day they freaked out. And I said, What do you mean they freaked out? Like, Well, they didn't understand that.
00:51:42:09 - 00:52:00:14
Matt Blumberg
Like we got a big check and buy. Life was good that first day. I mean, they started crying, he said, and the first thing they said was, Oh my gosh, you're going to be unemployed. So I sort of took from that that I took two things. The immediate thing was like, All right, I'm going to bring the kids along for the ride with us.
00:52:00:15 - 00:52:18:16
Matt Blumberg
So so I did. And it's spent a lot of time with, you know, with my wife and kids. The six months leading up to the ultimate sale of the business. And I brought this topic in to the dinner table and I said, you know, we we do like a little annual goals process at home. And in January that year, I said, I think this is the year we're going to sell the company.
00:52:18:20 - 00:52:44:19
Matt Blumberg
And it's one or two of the kids started crying right? And but by the end of it, I was coming home for dinner and my little one was like, What happened in due diligence today? You know, like, when are you going to deliver the goods? So, so like preparing the family was really, really important. But preparing yourself as an entrepreneur emotionally for the journey, I've gone through the sale and it's not yours anymore and you're handing the keys to someone else.
00:52:44:21 - 00:53:08:16
Matt Blumberg
Incredibly important. And there's no one way to do that. But whether it's being introspective or working with a coach or doing journaling or doing whatever you have to do so that the end of it is happy and thankful. And also you've given yourself a measure of closure as opposed to getting the end of it and being bombed out or angry that the buyer is doing something that you don't like or whatnot.
00:53:08:16 - 00:53:10:12
Matt Blumberg
So that is my my one piece of advice.
00:53:10:16 - 00:53:36:18
Todd Sullivan
I love it. Matt, We've heard from time and time again from founders, you know, it feels like a gut punch. Oh, I should have brought my wife into that whole experience because it was so difficult and she should have seen what I was going through. And there are many times where it just feels like finality. I know we basically have on the wall our job is to translate emotion to finance and finance to emotion in an M&A process.
00:53:36:18 - 00:53:51:06
Todd Sullivan
And we really try to help founders through that, figuring out ahead of time how they strategize, how they're going to feel about it, how to prepare for it. So it's is incredibly meaningful. Thank you for for leaving us with that. So I really thank you for your time. I really appreciate it.
00:53:51:08 - 00:53:53:03
Matt Blumberg
Good conversation.
00:53:53:05 - 00:54:15:08
Todd Sullivan
Thanks again for listening to the Cashing Out podcast. For more found her exit stories, please subscribe to the Cashing Out podcast on Apple iTunes, Spotify, or wherever you listen to your favorite podcasts. And please remember exercise dot com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.