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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!
Cashing Out M&A Podcast | E24 | Brent Wall
00:00:01:16 - 00:00:23:00
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, I have a great guest, fellow college athlete and former owner of All Star Driver Education Brent Wall.
00:00:23:13 - 00:00:45:23
Todd Sullivan
In 2007, Brent bought All Star Driver Education from his father because they had very different views on how to grow the business. And Brent was tired of working for the family business without having true ownership. Once Brent took the reins, he grew this small family business into a 13 state operation with accompanying software, a platform which he ultimately sold in 2019 to a small private equity firm.
00:00:46:19 - 00:01:07:08
Todd Sullivan
In our conversation, Brent shares his family dynamics that led to him buying the business. How picking the wrong potential buyer for his business set his exit process back several months. And finally, how Brent determined how much money he needed to sell his company for to comfortably enter the next phase of his entrepreneurial career as a crypto and blockchain investor.
00:01:07:21 - 00:01:12:03
Todd Sullivan
I hope you enjoy my conversation with Brent Wall.
00:01:14:06 - 00:01:39:18
Todd Sullivan
Brent, Thank you for doing this. Today I was fired up. You and I chatted a little bit about the business. You sold it to a friend of mine so I was excited to get you on the podcast. I really appreciate you making time. I know your story. I think it's really special how you bought a business from your family and grew it to a point where, you know, nobody really had the foresight of where it could go except for you, and then was able to sell it.
00:01:39:18 - 00:01:48:09
Todd Sullivan
And it was not an easy sale process. So I think a lot of people, our fellow founders, will get a lot out of this conversation. I appreciate your willingness to share it all.
00:01:48:23 - 00:01:51:04
Brent Wall
Absolutely. Thanks for having me. Excited? Yeah.
00:01:51:12 - 00:02:03:19
Todd Sullivan
I think one other thing is, you know, I have a rule like only one basketball guy is allowed on the podcast each week. So when you decided to take this time slot, I bumped Mark Cuban in, like, a second.
00:02:03:20 - 00:02:11:06
Brent Wall
So thanks for power. Wow. I'd like to really see those emails, but I really haven't. That's great. Thank you so much.
00:02:11:18 - 00:02:20:11
Todd Sullivan
I think a great place to start is just your your kind of personal background and what led you up to saying like, hey, I want to do the entrepreneurial thing?
00:02:21:02 - 00:02:47:06
Brent Wall
Sure. So grew up in Ann Arbor, Michigan, went to undergrad for a business management degree. And I think maybe it was around and during that time. And I guess I should also since you mentioned the basketball thing, I went to a university in Connecticut called Fairfield University. A small D-1 was fortunate enough to get a scholarship there. And I think in being in that business school, I was kind of like, all right, well, what am I really into?
00:02:47:06 - 00:03:10:17
Brent Wall
I'm into marketing or accounting or managed it and then said, Oh, this business management thing, I like this, but I sure would like to own something, you know, manage folks and do it for myself. So you got out of Fairfield and that's the East Coast School. And so a lot of my friends went off to work in New York City and I figured I would follow and do the same and be with the big boys.
00:03:10:17 - 00:03:30:01
Brent Wall
And then my dad had started a driving school. My senior year of college. And that summer I came home to regroup after graduating and my mom said, Oh, just get driver's ed certified because, you know, your dad needs some in the car help. And I'm like, Why would I do that? I'm out of here. You know, I'm only staying for a month or two and I'm going back to New York to be a big business guy.
00:03:30:10 - 00:04:00:05
Brent Wall
I got certified, started work in the family business, if you will, and really started to fall in love with the passion of working with kids and teaching and business, because my family is comes from multiple generations of educators. Both my parents were retired school teachers as well. So I thought, wow, you know, I really kind of like this. I think I'm going to go back to school, get my master's in education, do this driving school thing on the side.
00:04:00:05 - 00:04:26:21
Brent Wall
So I went back to Wayne State University, got a Master's in education, and it was around that time that driver's ed stopped receiving funding from the state, and then districts were no longer able to afford to offer it for free or even be competitive with private providers around. And so we actually took full advantage of that and started to really scale the business over time.
00:04:26:21 - 00:04:32:01
Brent Wall
But I know that you want me to talk about the family dynamics as well. So this.
00:04:32:01 - 00:04:54:06
Todd Sullivan
Is good. This is great. So but I want to I want to step back. Right? So, you know, we're both college athletes, right? And you overlooked, that I think a lot of people can kind of connect with that experience. And so you went to the NCAA tournament, right, Like this? Yeah, a fantastic opportunity. You tell me. Tell me about like, what was the best experience in college basketball for you?
00:04:54:17 - 00:05:24:15
Brent Wall
Yeah, for sure. You know, getting to the tournament our junior year in 1997. Look, dating myself here played against North Carolina, the number one seed in the tournament. Vince Carter's team was one of the main players, Antowon Jamison. Yeah. And that was outside of having kids and getting married. That was probably the highlight of my life. To be able to be in that big dance, even though we were a 16 seed, just experiencing that actually, I should say we were up by eight at halftime.
00:05:25:12 - 00:05:33:23
Brent Wall
So we're actually we're one of those 16 seeds that was on the bubble potentially to upset two one seed. But you know, as it normally goes, we lost about a few.
00:05:35:08 - 00:05:53:00
Todd Sullivan
That is all right right. I think I think back of a lot of my kind of claims to fame is in high school Tony Amonte scored a hat trick on me. So as a as a goalie, right. Yeah. And and Bobby Orr came out to one of our practices, and he scored on a breakaway on me, right?
00:05:53:05 - 00:05:53:10
Brent Wall
Right.
00:05:53:12 - 00:06:03:20
Todd Sullivan
And then and then in college, one of the best games I played, Paul Korea scored twice on me. I think he took two shots. So all of my like claims to fame.
00:06:03:20 - 00:06:07:19
Brent Wall
Or were on the ice with all these guys that's what that's our story, right?
00:06:07:22 - 00:06:10:15
Todd Sullivan
I was there. I was there. I was I was in greatness.
00:06:11:00 - 00:06:11:21
Brent Wall
I love it. I love.
00:06:11:21 - 00:06:25:17
Todd Sullivan
All right. So that's that's great background. Great context. You're working in the family business and now the business starts to grow. You want to make up your mind of like, where do you want to dedicate all of your efforts? So maybe why don't you take it from there?
00:06:26:08 - 00:06:47:06
Brent Wall
Yeah, for sure. So I would say after I graduated from Wayne State, you know, the business was roughly three years old. I was putting in a lot of time working the business along with going to grad school to the point where I really could tell I wanted to take this to the next level. Yet the big problem was my dad's still on 100% of the business.
00:06:48:09 - 00:07:11:14
Brent Wall
So I tried working with my dad and I love him to death. He's the best ever. But working with your father is extremely difficult, especially when Dad is kind of not really around the business and he's kind of letting you run the day to day, but expecting you to report to him periodically. And the periodic is kind of erratic based on how he feels that day.
00:07:12:19 - 00:07:29:10
Brent Wall
So that just really, really created a big struggle between he and myself and the business. And so it got to the point where I saw an industry opportunity and I went to my mom. I said, Look, I can't keep doing this. Like, either I buy dad out or I actually love this industry so much, I might start my own driving school.
00:07:29:10 - 00:07:48:19
Brent Wall
And we were relatively small at the time. We only had four locations in Washtenaw County. And so my mom, you know, via that conversation, approached my dad and he said, Absolutely not. I'm not selling this thing. You know, he's going to run it for me. And I said, Well, that's not how I feel and I don't think I want to.
00:07:48:19 - 00:08:10:15
Brent Wall
And it got pretty nasty around 2006 / 2007, to the point that my mom, you know, had a private conversation with him and said, look, you're going to lose your son over this. Is it that important for you to continue to say that you own this business even though you're really not putting much time and effort into it? And he's successfully starting to get some track record with it or traction with it.
00:08:10:15 - 00:08:29:08
Brent Wall
So, I mean, I remember even a point as we worked on the sale process to we were sitting in an attorney's office and I was on this one chair and they were on this couch in the waiting room, and we weren't even talking to each other. I mean, it was just it just sucked. It was horrible. But, you know, I'm happy to report that I got married that year.
00:08:29:17 - 00:08:55:18
Brent Wall
My daughter, his first grandchild, was born Honeymoon Baby, shortly thereafter, but nine months thereafter. And I think that kind of changed my perspective on life and realizing like, all right, although I was forced by my wife, Brent's mom, to sell this business to him, which really pisses me off, I'm glad now that I have my grandchild, my son's married and happily married.
00:08:55:18 - 00:08:58:17
Brent Wall
You know, life is more important than owning a business.
00:09:00:05 - 00:09:22:14
Todd Sullivan
That's great. Thanks for sharing that. I think that to many of us entrepreneurs that grow up in entrepreneurial families, frankly, like face that right that that conflict. And we see a lot of businesses, frankly, where the kids have no interest in the business. And so then what's happens, It gets handed to somebody where you have literally no relationship and it's just a financial transaction.
00:09:23:03 - 00:09:42:14
Todd Sullivan
So for you to be able to finally figure, figure it out, work it out with family and you know, and know that family comes first, it sounds like you guys got there. So kudos to you for that. So now can you talk to me about how you valued the business? It must have been very difficult negotiation, sensitive conversations.
00:09:43:00 - 00:09:45:08
Todd Sullivan
How do you come to a number with a family member?
00:09:46:09 - 00:10:22:19
Brent Wall
Yeah, that was tough, right? Because this is now where my mom actually did take my dad's side, and rightfully so because she wanted to get the highest value along with him. But I, again, was very appreciative for her to put her neck out there to even make this happen. As far as how we created a value, you're right that early stage not having prior business experience or M&A experience, we used an accountant at the time who also didn't have any experience, and so we kind of just were I probably online, if I might even exist in 2017, like searching, like how do we evaluate this business long as short of it is, I think we
00:10:22:19 - 00:10:46:21
Brent Wall
did like 5 to 7 times the net income, which is laughable now after going through a real strategic purchase process with a private equity group and investment level. But that's how we did it. And honestly, I wanted so badly to own this business. I absolutely, at that point in time overpaid by 200, 300%, if I would say yeah.
00:10:47:11 - 00:11:06:00
Todd Sullivan
Yeah. I mean, it's very difficult to value businesses that are kind of small mom and pop, right? Mom and pop businesses. But you know what you wanted? You had the vision for what it could be and and I'm assuming you put some structure in place. It wasn't like, hey, I just got married, I had a baby and here's all my money.
00:11:06:12 - 00:11:07:07
Brent Wall
Yeah. Yeah.
00:11:07:14 - 00:11:08:14
Todd Sullivan
So how did how did you do that?
00:11:09:06 - 00:11:31:04
Brent Wall
Yeah, no, that was one part that my parents were absolutely willing to work with me. I think they were more caught up on what is, what is the actual number, how they received that number. They were open to me not having to take out a loan. And so that was amazing. And I paid them off over multiple years to and so it made it more doable for me as well.
00:11:31:15 - 00:11:34:09
Brent Wall
And that part of it I was very appreciative of.
00:11:35:00 - 00:11:44:21
Todd Sullivan
I think for a lot of people listening what we might term that as is seller financing, right, where the seller is basically giving you a loan and you are paying that off over time. Yeah, that's great.
00:11:44:21 - 00:11:53:09
Brent Wall
That's great. Exactly. And the only reason I didn't go there with that term is because, well, I guess it's seller financing with no interest is what that then it was nice.
00:11:53:17 - 00:12:06:10
Todd Sullivan
Nice. All right. So I mean, they, they got what they were looking for. You got what you were looking for. And so now you're off to the races. So that was when you bought the business. You joined in what what, like to two.
00:12:06:11 - 00:12:07:19
Brent Wall
2009.
00:12:08:00 - 00:12:08:08
Todd Sullivan
2009.
00:12:08:08 - 00:12:28:03
Brent Wall
Nine. And then, you know, I was distracted going to grad school and actually didn't share this earlier. But I had a little when my dad and I were butting heads and I didn't think I was going to take ownership of this business. I shot off to L.A. to be a wannabe actor, got my SAG card, and so that was like a nice, fun, nine month year long stint.
00:12:28:03 - 00:12:37:23
Brent Wall
Yeah. So fast forward between graduating in 98 from Fairfield, going to Wayne State, graduating with Masters, going to L.A., coming back. It was about ‘07 that we bought the business.
00:12:38:01 - 00:12:44:21
Todd Sullivan
Okay. All right. So now you're going to grow this business over the next ten, twelve years, right? How did that go?
00:12:46:03 - 00:13:16:10
Brent Wall
Yeah, I mean, as is any entrepreneur's journey, it's a lot of ups and downs, a lot of struggles, but a lot of wins also. But again, going back to the state, stopping the funding districts, being unable to offer at a competitive rate or virtually free driver's ed, we started just attacking and going like gangbusters. We would go to school districts, we would rent out classroom space, we would provide our vehicle.
00:13:16:10 - 00:13:44:11
Brent Wall
We try to hire the district teachers that once ran the district run programs. And that's what really allowed for our rapid growth throughout on the brick and mortar side. And then as you know, more capital and income was coming in from those efforts. We redeployed some of it to create our own learning management system and go after the online classes for both, you know, teens as well as adults with point reduction and so forth, insurance point reduction courses.
00:13:44:21 - 00:13:55:06
Brent Wall
And so we scaled the business out to about 13 states online. And I think we had brick and mortar, seven or eight states when I ended up selling in 2019.
00:13:55:06 - 00:14:29:16
Todd Sullivan
That's fantastic. So that's that is real scale going from a few locations in a county to seven or eight states, like with physical locations. But then the software platform, right. It seems like you you identified, hey, there's a shift in this industry that's really going to benefit these private companies. And then your leveraging essentially like an EdTech platform, right, to bring in more customers using technology, probably something or almost definitely something that would not have happened, right, If you didn't own the business and be able to make all those decisions.
00:14:30:02 - 00:14:51:12
Brent Wall
Absolutely. And I think what also allowed for me to get a higher offer through the private equity group that we ended up selling to was just that creating our own internal software systems are learning management platform. Our registration platform versus using a third party and paying, you know, a subscription fee per month that absolutely helped the valuation.
00:14:52:09 - 00:15:20:22
Todd Sullivan
Oh, that's great. Can can I dig into that a little bit? Because we see a lot of clients that will start out building their their software offering on someone else's platform. Right? And then it reaches call it $10 million, $10 million of of revenue, maybe not that high on the recurring side, but they get to a point where it's like, ooh, it doesn't have all the features or the UI is not quite what the customer is looking for and they have to make this decision.
00:15:20:22 - 00:15:39:20
Todd Sullivan
Do we reinvest and build our own platform or do we sell it at that point? And we see a lot of that. I think it's it's a very much a personal decision. And we know that if you own your own platform and that platform is compatible with the buyer, then you're going to get a premium for that platform.
00:15:39:20 - 00:16:01:01
Todd Sullivan
Right? It's it's homegrown. You have full control over it, You can iterate on it. It's proven as opposed to building on someone else's technology where the buyer to scale will likely have to replatform and invest in that. So can you maybe say a little bit more about that, that you had your own platform and and was it every buyer or just a few buyers?
00:16:01:01 - 00:16:07:23
Todd Sullivan
How did they view that and value that differently in your mind than if you built on a platform of somebody that somebody else owned?
00:16:08:00 - 00:16:37:17
Brent Wall
Yes, sure. I think for us it was huge, actually. I know through an acquisition that the private equity group has made since that company was, you know, received as a much lower valuation just because they were using a third party. And I think in our industry, the way our investment banker kind of dressed this up for the private equities that came in and showed interest was, hey, this company is scalable across the country because they have their own built in proprietary systems.
00:16:38:00 - 00:16:52:13
Brent Wall
You don't have to rely on a third party to scale it out. It's already right there. You own the technology, all the data, you know, the programmers, blah, blah, blah. So there was huge interest by every single private equity group in the fact that we had our own internally.
00:16:53:05 - 00:17:08:06
Todd Sullivan
That's fantastic. So this is this is 12 years later from when you bought the business, you're in a point 8 states, then in 13 with the software. What drives you to sell the business? How do you make that decision?
00:17:09:20 - 00:17:27:11
Brent Wall
So, you know, for me and I'm not saying that this is what's going to happen because I'm, you know, very appreciative of the private equity group that bought it. But, you know, for me, it was okay, what's this business going to look like? What's this industry going to look like in ten years from now? With the autonomous vehicles coming?
00:17:27:19 - 00:17:41:16
Brent Wall
I was seeing a lot of teenagers. I didn't have one at the time. I do now and I'm living it personally where they sit in their room all day and they communicate on their phones to their friends so they're not motivated. Like you and I were to get to the mall on the weekends or go to the movie theaters and whatnot.
00:17:42:02 - 00:17:59:02
Brent Wall
And I said it, We're not here today and we may never get here, but like, technology is moving so rapidly, so quickly that are these teenagers going to be really motivated to go get their license and get out of their room and are vehicles going to drive themselves? Maybe we don't get there. But I was just like, you know what?
00:17:59:02 - 00:18:12:19
Brent Wall
If I can shop this around and get a valuation, a number that I can get out and feel comfortable that I can live the rest of my life and do other things that I'm passionate about, then I'm willing to entertain the process. And so.
00:18:13:14 - 00:18:31:23
Todd Sullivan
That's great. So you mean you're really folk? There are external factors that you're really paying attention to because you bought the business right at a time where states are not getting the funding that they used to. And so you're seeing a shift in the market and then you're projecting out, hey, there could be new risk entering this market.
00:18:31:23 - 00:18:52:02
Todd Sullivan
We see it quite a bit even, you know, with with interns that work here that are much younger right there. They don't own a car. They may not have their license. Right. It is it's definitely a different generation. All right. So I get it. There's some good rationale and it's about can you get your number before we go into you shop in the business.
00:18:52:05 - 00:18:59:05
Todd Sullivan
How did you identify that number? Right. You said live comfortably for the rest of your life. How do you how do you figure out what that is?
00:18:59:21 - 00:19:28:19
Brent Wall
Yeah. So definitely put a lot of time and effort along with the financial planner manager that I use for my stock trading and mutual funds and so forth, going through various scenarios like, okay, here's what I already have invested, here's what the potential deal structure could look like if this actually closes. Does that when you combine it all together, give me enough to live off the interest.
00:19:28:19 - 00:19:53:21
Brent Wall
If I was to hand him or them the entire, you know, portfolio, which I just can't because I'm a serial entrepreneur. Right. But it gave me a peace of mind to say, okay, now I know that with you conservative level of interest spending, living so forth, I could I could probably get away with living the rest of my life, you know, without hopefully having to get another job, if you will.
00:19:54:10 - 00:20:13:01
Todd Sullivan
That's great. Yeah. Yeah. A really appreciate that, because what we try to do now and this is a maybe a shift in the last call a year for us is we bring in those private wealth managers to our clients to try to figure out what are the goals for the rest of your life. Are you going to start a business?
00:20:13:01 - 00:20:32:21
Todd Sullivan
Are you going to buy a business? Are you going to put your kids through college? Do you want a second home? How do you want to live? Kind of that next chapter. And we don't want to sell your business if you can't hit that number. So figuring out what your number is, it's a very personal thing. And we actually put most people, most of our clients through wealth manager assessments from two different angles.
00:20:32:21 - 00:20:50:06
Todd Sullivan
We take a bulge bracket and we'll take an independent and they usually come up with very similar numbers. But it does a couple of things, right? It gets in your mind, okay, I know what I can say yes to, right? Because it's going to achieve my goals and it it aligns the investment banker that you'll ultimately are working with that.
00:20:50:06 - 00:21:16:14
Todd Sullivan
Hey, I'm saying no, if you can't get me, you know, to x the other thing that I think we see, which I'm very proud of, is that when you when you get that information upfront, you're kind of you're getting ready for that next chapter. And so your level of satisfaction after your sell, your business really rises. It's the people that go in and they're like, Yeah, I just want to sell my business and I'll take the most money I can get.
00:21:17:00 - 00:21:37:00
Todd Sullivan
They don't have a plan of what to do with it. Maybe it's enough, maybe it's not. But it's just the lack of planning leads to dissatisfaction in these M&A transactions. And historically, that's that dissatisfaction is very high. So awesome that you, you know, took the time to plan out what that number is. Now you go out and you find an investment banker.
00:21:37:00 - 00:21:49:04
Todd Sullivan
And I know, you know, you had a friend tell you, hey, if you're going to shop your business, you really should find somebody to help you do that. Can you talk to me about that decision to go with an investment banker and then how you how you selected them?
00:21:49:17 - 00:22:18:19
Brent Wall
Sure. So before going to an investment banker route, I was talking to a few other strategics in our space that I thought were capable of acquiring our company. Or actually, I was looking to say, All right, well, if you're not interested on that side, maybe I stay in this game and I acquire you. But as we shared numbers and what we were both looking for, I realized that what they were willing to put on the table just wasn't, you know, a strong enough offer for me to consider getting out.
00:22:19:12 - 00:22:35:07
Brent Wall
And so you're right. I had lunch with a great friend that we both know and he said, Hey, have you ever considered an investment banker? And I said, Well, he's like, Do you know what they do? And I'm like, I think so. Why don't you just tell me anyways, right? You know, because I was I'm a I'm a self-taught entrepreneur.
00:22:35:07 - 00:23:09:04
Brent Wall
I mean, yes, I went to undergrad, you know, got a business management degree, but they don't teach you this stuff. And so he put me in touch with a few investment bankers in the metro Detroit area. One in particular showed strong interest seeing how he could really position us as like the driving school across the country that we were we were one of the top five driving schools in the country, but he could position us with our learning management system, our platform, our technology, like, Hey, you guys buy this school, You can roll up a bunch of other schools under their platform and really, really grow out.
00:23:09:05 - 00:23:21:10
Brent Wall
This industry is like the dominant player and so ended up, you know, going with them and just an amazing journey, frustrating moments along the way. But I'll pause there.
00:23:21:15 - 00:23:42:18
Todd Sullivan
Yeah, yeah. No, there's there's a bit to unpack there that I love to Well, what I love to hear is that you interviewed multiple investment bankers, right? And they all probably, you know, gave you their pitch and then they may have said, you're too small or you're too this, or we want you, but we don't have a plan.
00:23:42:18 - 00:24:05:16
Todd Sullivan
And then you land on one that really understands the business, not only from your perspective as the operator and how you're growing it, but how the buyer is going to want to view this business. They're buying your future cash flow, your growth, your future opportunity, and the guys that really understand your industry can paint that picture really well to buyers.
00:24:05:22 - 00:24:28:15
Todd Sullivan
So, you know, you and I have talked about this ahead of time. You know, frankly, you made a fantastic choice. Just to be clear, though, you didn't look outside of the Detroit market at all. Right? You were just kind of okay. And so, you know, we encourage people to really understand that investment banking, particularly in the lower middle market, it's just it's not a local service.
00:24:28:15 - 00:24:50:03
Todd Sullivan
It's an industry expertise. And frankly, I think you got really lucky with the group that you chose. We've had other guests on the podcast that also worked with that investment bank and had great outcomes, so you couldn't go wrong. And I love how you said they really described that business for the buyer of how it could scale and how it could be worth so much more to them if they were to execute on a game plan.
00:24:50:22 - 00:25:01:22
Todd Sullivan
All right. So they decide take you to market. Can you talk to me about that process, the time period it took? Was it distracting to build continuing to build the business? Can you take me through that?
00:25:02:22 - 00:25:26:12
Brent Wall
All the above. So let's see. So we actually ended up having to do this twice, kind of the first go around did the management presentations with five different groups that we selected got LOI’s in place, and there was one that came in far higher than the others, probably 20% higher. But the individual hadn't really been in the ecosystem before they were younger.
00:25:27:02 - 00:25:49:06
Brent Wall
And my investment banker said, Hey, I know you said you really want to go down this path with that one, realize you're going to lock the other ones out. We're going to get into an exclusive and they're going to do their due diligence and everything else. But I just don't have a really good feeling right now. I hope that we're at the table and we close and you can point your finger at me and say, I told you so.
00:25:49:22 - 00:26:07:22
Brent Wall
And I said, Well, look, we have we have to do this. It's like 20% higher than any of the other ones. Like, why would I not? He's like, I just don't have a good feeling about this. That's all I'm saying. And I said, All right, well, here we go. So we locked down exclusive got oh, gosh, I think they dragged it out.
00:26:07:22 - 00:26:28:14
Brent Wall
We got to nine months and maybe like six months, I think, but got to a point where we were three weeks from the closing date we had selected. I had already spent close to 50,000 in legal fees. I can't tell you the countless amount of hours of days, nights, weekends that we both you know, and along with their team and our team, had to put in to get this to where it was.
00:26:29:04 - 00:26:53:18
Brent Wall
And then we had a short conversation on a Friday, late afternoon, and it was a couple like little housekeeping items. And then out of nowhere he just dropped the hammer and said, Guys, I just don't think this is still worth what I originally put in the Oh, I think it's 50% lower. And thank goodness I had the investment banker because I probably would have cringed and given in because I didn't know any better and the banker took over.
00:26:53:18 - 00:27:18:01
Brent Wall
We hung up the phone. He said, You're not talking to him. We went cold for about a month or so. The investment banker tried to see if he could save the relationship in the acquisition deal, but it just didn't happen. So we had to go back to market and again, to your question earlier, I mean, countless hours were lost and lots of money and time and distractions and everything else along the way.
00:27:18:13 - 00:27:35:16
Brent Wall
And, you know, very, very fortunate and lucky and all the above to a sold to who you and I both know as well. An amazing, amazing person and group that he's created with his private equity couldn't have been happier at sale.
00:27:36:02 - 00:28:08:17
Todd Sullivan
I appreciate you sharing kind of the trials of this because one of the things that your investment banker and it sounds like yours really had a good sense that this was going to be a problematic buyer, right. He warned you at the beginning. But what our fellow founders really need to look out for when they're interviewing and making the selection of their investment bank is that that bank needs to have relationships with your potential buyers because they know who's going to pull that, you know, trick at the end of of saying, okay, now I want to pay less.
00:28:09:02 - 00:28:32:12
Todd Sullivan
They know who has the money and who doesn't, Right? That is a big part of that representation for you to not let you get into those kind of situations. And now I understand you made that call, right, that the carrot was dangled and it would have been very, very difficult for anyone to say no to 20% higher. And it sounded like from our past conversations that that you thought that that buyer had the money.
00:28:32:12 - 00:28:52:06
Todd Sullivan
But then maybe in the end. Right. Their capital was kind of falling through and that that was maybe the reason they wanted to pull back, not that they didn't value the business that way, but, you know, it's such a waste of time, right? You're trying to run a business, grow a business, make it more valuable. And like you said, nights and weekends away from family to try to get this done.
00:28:52:06 - 00:29:12:05
Todd Sullivan
And then dollars with accounting and legal and banking, it is is really not for the faint of heart. And sorry you had to go through that. But then somebody steps up. Right. And is willing to understand the value, somebody that, you know, obviously, like you said, we both know. So I was so excited when you did sell to him because I think he's such a great steward of businesses.
00:29:12:11 - 00:29:33:22
Todd Sullivan
Right. You're going to have legacy. That business is going to continue to grow, even though, like we've hit some really challenging times, right, with COVID people not assembling and all of that. But I know he's is is very enthusiastic about continuing to grow the business. Is there anything else you would tell me? There's a lot of great kind of advice and learning from that experience.
00:29:34:03 - 00:29:38:20
Todd Sullivan
Anything else that you would share from selling the business that you'd want other people to know and learn from?
00:29:39:19 - 00:30:02:02
Brent Wall
Yeah, I mean, I would definitely tell anybody to consider an investment banker as part of the process. Yes, of course, they're going to take what they need to make it worth their while. And it may sound like a lot when you look at that number that they probably show you. But for me, it was okay. Investment banker, can you get me this range that I need to get in?
00:30:02:02 - 00:30:22:23
Brent Wall
If you take that, I don't really care because as long as you get me in the range that I need to be in after years and others, then I'm good. And so their ability to move the process forward, you know, make sure that everybody's playing nice in the sandbox or not and kick out the bad actors, you know, just, just everything.
00:30:22:23 - 00:30:47:09
Brent Wall
You know, they put me in touch with the right accountant that has the experience that they have from an investment banker perspective, the right attorney to use so that we close the deal and it's not someone, you know watching every dot of an eye and cross of a tee that doesn't have the experience in closing deals. So all those aspects that you just don't think about, if you're a first time entrepreneur that wants to sell, I'm telling you, you gotta use professionals.
00:30:47:09 - 00:30:56:00
Brent Wall
And yes, it's a sticker shock to know what their fees are. But as long as you get yours that you need and you want, it's so, so worth it.
00:30:56:13 - 00:31:19:19
Todd Sullivan
Brent That's fantastic. I got a riff on that because we talk to founders a lot and as fellow founders, right, we're used to pinching pennies, right? We want that dollar to go just a little bit further. And so when we see the fees that come out of investment banking, it is shocking to us. But if we focus on the outcome, not the fees, right, you're just in a far better position.
00:31:19:19 - 00:31:40:03
Todd Sullivan
So you really want to be picking the group that is going to take you to the promised Land and not worry about an extra $100,000, $200,000 because you're going to get that five times, ten times back by making the right selection. It's nice to hear that. They're also bringing you accounting and legal. You know, that's what we do at Exitwise is really surround you with the M&A dream team.
00:31:40:08 - 00:32:08:19
Todd Sullivan
And we love to know when banker and lawyer have played well together before and they're on your team, you know, sometimes that that they can be butting heads too right. Your investment banker wants a deal done your lawyer wants to kind of dot that last I and cross that last tee and protect you. That's their job. So having a balance there and having the team really functioning in high functioning way is really a big benefit to to the founders and, and frankly, getting deals done.
00:32:09:12 - 00:32:23:02
Todd Sullivan
Do you think you made any mistakes? Right. Aside from maybe selecting the wrong buyer? But that's just that's just really tough, a tough call to make. Anything else that you did that you might change if you had to do it over again?
00:32:23:10 - 00:32:44:19
Brent Wall
I mean, I put so much faith and trust in the investment banker that maybe things did go wrong and they did such a great job professionally of protecting me and so that I could focus on the day to day business and making that continue to be successful month in, month out. Boy, I mean, I made a lot of mistakes over those years for sure.
00:32:44:19 - 00:33:16:02
Brent Wall
But when it comes to the process, I think with them taking the lead and me following along, no, it was it was a really good process. I mean, one thing I would say, though, anybody that's thinking about selling their business, I mean, you really got to get your ducks in order, you know, when it comes to like all the behind the scenes paperwork for the due diligence process and everything else, I mean, all that stuff we were trying to just do on the fly as we were going through it, it would have been nice to, you know, maybe ramp that up a year or two prior so that everything was organized.
00:33:16:02 - 00:33:25:10
Brent Wall
I mean, no different than like an audit or whatever else. Right. Sure. You prepared ahead of time. But again, I didn't know any of that going into it. And they helped hold my hand the whole way.
00:33:26:00 - 00:33:48:19
Todd Sullivan
That that's great advice. One of our last guests and you'll know the company he ran. His name's Andy Beal and he ran Maxpreps. Right. And yeah, he talked about the value of his Board of Directors, making him get prepared to be purchased. Right. So that that diligence room, that data room was just so clean that a buyer comes in and they fully understand.
00:33:48:19 - 00:34:09:17
Todd Sullivan
And when a number is there, that number is accurate and they have no reason to question anything. And when you have that package, your business packaged that, well, there's far more demand for it. And so you really lower the risk of a failed transaction and you increase maximizing your outcome. So yeah, that's fantastic advice. So let's go into overtime now, right?
00:34:09:17 - 00:34:14:00
Todd Sullivan
I got a few few questions for you. So when you sold the business, who was your first call?
00:34:15:18 - 00:34:39:17
Brent Wall
Well, my wife was there, actually, my first well, I talked to my investment banker like the second after everybody was on the call and, you know, the deal closed and the money was getting exchanged, called the new buyer, talked to him, started crying like a baby, because, I mean, it was just a life changing moment for me. I mean, yeah, it really was, you know, and tearing up right now a little bit, actually, just thinking about it some three years later.
00:34:39:17 - 00:34:48:12
Brent Wall
But and then, you know, I eventually did call my parents, I think, that day as well. So, you know, this was all family driven. I can't think of anybody else.
00:34:48:12 - 00:34:49:08
Todd Sullivan
I thought, that's great.
00:34:49:14 - 00:34:51:02
Brent Wall
My sister, maybe as well.
00:34:51:02 - 00:34:58:19
Todd Sullivan
So how did you celebrate with your team? Your family? Like what? What did you would you end up doing?
00:34:58:19 - 00:35:09:02
Brent Wall
It's funny. My my wife and I, you know, we live modestly and whatnot, right? But what is it? Bottle of Cristal. Is that the couple of hundred bottle of champagne, Right.
00:35:09:06 - 00:35:10:00
Todd Sullivan
I wouldn't know.
00:35:10:06 - 00:35:27:12
Brent Wall
I Yeah, well, I didn't either. I was like, Oh, I see. People maybe it's like I'm, you know, music videos or something, you know? Um, yeah. Anyways, I went and bought a bottle of it. It was like $200 something dollar bottle of champagne. And so we toasted and, you know, it's and I'll tell you, it has had it.
00:35:27:12 - 00:35:53:01
Brent Wall
Yeah, it's not really all that much better, but that's just me. Yeah. And then celebrated, you know, I mean, look, luckily, you know, I was able to pay off the house and we put on an addition and I don't know, it's just there's quite a peace of mind, you know, when you read about life and financial pains being one of the biggest up there to to be able to remove that pain in life.
00:35:53:01 - 00:35:59:00
Brent Wall
And you still have your other struggles. Right. But like, that's a huge one to remove if you can if you're in a position to do that.
00:35:59:17 - 00:36:14:08
Todd Sullivan
It was yeah. So well so well said. I'll add in this question for you. So did your experience on the basketball court benefit you in building selling? Like how do you think that that lifelong athlete athletic experience helped?
00:36:14:08 - 00:36:42:20
Brent Wall
Absolutely. And I think I don't know your feeling and you don't need to share. But like mine, you know, when you hear someone that's played team sports at a collegiate or even higher level and not to take away from anybody that played competitively in high school or played an individual sport, there's just something there. And the drive, the determination to push through adversity, I mean, look, I could have easily just shut down the process after that first phase went so horribly wrong.
00:36:43:09 - 00:36:59:16
Brent Wall
But because, I mean, it takes so much time and effort and demanding hours out of you to focus on your business, which is going to make you money at the end of the day. And if none of these buyers come to the table, you still got to run that business. So but, you know, you just push through it and you're like, Hey, I want this.
00:36:59:16 - 00:37:24:20
Brent Wall
I'm going to do anything and everything in my power to make sure this happens. And through the process. So I'll prepare any of you first time buyers, it's you're you're doing it. You're working two jobs. There's no question about it. Even with a strong investment banking team behind you, I mean, the demand put on you in addition to running the business and actually the business had to be more successful month in and month out during that process so that the buyer doesn't walk away or they don't try to discount it.
00:37:24:20 - 00:37:39:03
Brent Wall
So you have these internal pressures every single month. But now once you go through that process, oh my gosh, it's it's demanding. But I will say at the end to get that closing day is all worth it. All worth it. And then so.
00:37:39:13 - 00:38:05:01
Todd Sullivan
Awesome. Awesome. Yeah. I do want to share because I think you touched on something that is important to me and that that that team sport really you are going to battle with your brothers, right? And you've learned to trust them over time and you've got better together over time. And there's just so much that that is unspoken to achieve a goal.
00:38:05:09 - 00:38:25:13
Todd Sullivan
And so when you have a company and you have employees and you have partners, to have that kind of camaraderie and mission around a similar goal, I think athletics just brings a ton to to business life. And it's the adversity, right? Yeah. You're gonna lose. You're going to get knocked down and you just got to get back up, Right?
00:38:25:13 - 00:38:27:18
Todd Sullivan
And sports absolutely teaches you that.
00:38:28:07 - 00:38:32:23
Brent Wall
And anybody that's a successful entrepreneur that hasn't played sports, you guys are great too. But just.
00:38:32:23 - 00:38:43:06
Todd Sullivan
Yeah, yeah, yeah. All right. So is there one person in your life who you'd like to thank that really contributed to your personal and professional success?
00:38:43:06 - 00:39:06:17
Brent Wall
Well, I got to say, my parents, my dad for creating All-Star Drivers Ed, because obviously without that, I never would be here talking to you. And then my mom for, you know, stepping in, as great mothers do, to realize that family's far more important and to stick up for her kid over her husband like, seriously. And then and then, you know, a shout out to the investment banker.
00:39:06:17 - 00:39:13:10
Brent Wall
Absolutely. Because I've told them many, many times without you, you know, you've changed my life. You really, really did. So.
00:39:13:17 - 00:39:22:22
Todd Sullivan
All right. So, Brent, what are you working on now? Right. So many entrepreneurs, they sell a business, they can't sit still and they go do their next thing. Tell us. Tell us about what you're working on.
00:39:23:12 - 00:39:46:21
Brent Wall
Well, a lot of people are going to think I'm pretty crazy if you didn't already, but I've been invested in cryptocurrencies since 2015. So when I actually owned All Star and Fast Forward Partner and I, my best friend, CIO partner, created a crypto hedge fund trading fund. And so we started that last year. We're doing pretty darn well out there looking for Limited Partner investors.
00:39:47:12 - 00:39:58:11
Brent Wall
As we trade coins, we're getting yield, we're staking coins, we're doing all sorts of different things and love of the industry. So call me crazy, but that's what we're doing.
00:39:59:00 - 00:40:09:00
Todd Sullivan
Who's your ideal Limited Partner, right? Because it's probably not someone that's just an angel investor, is it somebody bigger than that? Like a Family Office? Who do you really target?
00:40:09:17 - 00:40:30:23
Brent Wall
Yeah. So family offices, fund of funds. We're also looking for high net worth individual investors. The minimum is up there with what their accustomed to seeing, probably with other investments. But yeah unfortunately it doesn't allow through the SEC regulations, the laws that we're in to take on anybody.
00:40:32:05 - 00:40:42:15
Todd Sullivan
In your performance is really at the top. Like 5% of all of these traders, hedge funds that are in this particular kind of crypto blockchain industry, Right?
00:40:42:23 - 00:41:00:09
Brent Wall
Yeah, we're doing really, really well. Our attorney has works with 450 different funds and he said after giving him our performance to date since inception, we're right up there in the top 10%. So really, really excited about where we are and where we're looking to go.
00:41:00:09 - 00:41:03:07
Todd Sullivan
What do you think the difference is? Why? Why are you guys that much better?
00:41:04:14 - 00:41:32:02
Brent Wall
I think the position that we're taking is a long non leveraged position and we're not going after the I won't use this word, but the crap coins, if you will, out there or like the very, very, very speculative coins that many others are trying to go after to just either go crazy in a win strategy or in many other cases right now, you know, lose miserably.
00:41:32:12 - 00:41:57:05
Brent Wall
And so we're just I hate to say conservative with the word crypto, but I feel like we're probably the most conservative, you know, long non leveraged fund out there. And so I think that's showing now through the FTC's drama last quarter and everything else that's going on with native regulation and crypto and so forth, we're playing it safe, if you will, if there's such a thing in the crypto space.
00:41:57:05 - 00:41:57:15
Brent Wall
How's that?
00:41:58:06 - 00:42:17:11
Todd Sullivan
That's fantastic. All right, Brett, thank you for being here. This is fantastic. I love that you're off doing the next thing right because entrepreneurship, it's a career path. A lot of us, we do this multiple times, right? And this is actually what like number three for you because you've sold other businesses that we didn't even touch on. So I'm sure whatever you're doing is going to be successful.
00:42:18:02 - 00:42:21:15
Brent Wall
Well, thank you again to this was a lot of fun for me, too. So appreciate you having me on.
00:42:22:02 - 00:42:47:13
Todd Sullivan
Thanks, Brent. Thanks again for listening to the Cashing Out podcast. For more founder exit stories, please subscribe to the Cashing Out podcast on Apple, iTunes, Spotify or wherever you listen to your favorite podcasts. And please remember Exitwise dot com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.