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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 Podcast | E22 | Sandeep Sood
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 special guest, serial entrepreneur, and CEO Sandeep Sood. Sandeep started his career as a designer and application developer for a variety of companies, before launching his first business, Monsoon, a high-end software development agency to the Fortune 500.
After a 13 year journey, in 2015, Sandeep sold his business to Capital One. For the next 3 years Sandeep immersed himself into how large scale financial products were really built within large corporations, and then used that experience to create an even better software development agency to service large financial institutions, called Kunai.
Today, Sandeep talks about his multiple exits, the pros and cons of working at a large public acquirer, and how he negotiated as part of his exit the ability to build a second business in the exact same industry.
Sandeep, thank you so much for being here today. I was really looking forward to this podcast because, you know, I see this serial entrepreneur in you.
00:00:27:01 - 00:00:50:16
Todd Sullivan
I see a lot of what I was doing and what you were doing. But just remarkably, the first business that you build that I'd love to hear about you and you use that company to enable starting additional startups and then you have exit upon exit. Then you go work for an acquire and then you back out and build a very similar business with what I'm sure is learnings from the first experience.
00:00:50:16 - 00:01:04:22
Todd Sullivan
So I'm so excited to hear about that. I know our listeners are going to learn a lot from from your experiences. But first I have to say Mark Cuban had this time slot and I had no problem bumping him when you agreed to take it. So thank you for being here.
00:01:05:10 - 00:01:12:20
Sameer Sood
Know, I'm excited to be here. Todd And in the short time I've known, you have already learned a lot. So excited to dig deeper.
00:01:13:09 - 00:01:22:21
Todd Sullivan
Great. Great. Well, I think a great place to start, right, is probably. Why don't you take us through your background, right into the kind of first company that you you built?
00:01:23:10 - 00:01:50:11
Sameer Sood
Yeah, sure. So I started my first company shortly after college, and I think perhaps like yourself, but like so many other entrepreneurs I meet, I learned very early in my career that I was not a very employable individual. I don't know what psychological issues have led me to that tonight. I'm a terrible employee and I took a software consulting job right out, right out of college.
00:01:50:11 - 00:02:17:17
Sameer Sood
And I went to Cal. I actually was not involved in technology. I was not even very interested in it. I studied philosophy, religion, history, economics, thought I was going to go towards the liberal arts side of the world. And then in 1998, I graduated and this new thing called the Internet was taking over the Bay Area. And I just shifted course as I got interested.
00:02:17:23 - 00:02:41:23
Sameer Sood
My second semester of my senior year at Cal loaded up on computer science courses and without really knowing how to code, I talked myself into computer programing job, did that for a year, and then quickly realized I wanted to start something on my own. And that became monsoon that the first consulting business that we started.
00:02:42:15 - 00:02:59:22
Todd Sullivan
That's fantastic, right? So that that business was in such need at that period of time, right? Being able to have an expertise in development and then bring teams to to clients. So how long did you run that and how big did you end up building it?
00:03:00:07 - 00:03:32:22
Sameer Sood
Yashwant So just as you said in that era, you could get paid to build a website, to generate a JPEG, you could use it. It was such a new world that there were clients willing to pay for all kinds of things. And so we opted for that consulting type of model and we quickly found a niche in engaging legacy corporations and helping them build their first website, create their first e-commerce solution.
00:03:33:18 - 00:03:51:14
Sameer Sood
And we grew pretty quickly because that era that work was in very high demand and then scaled that up to both US based team and the international team of designers and developers. A few hundred people. All in all, before we, we moved towards our first acquisition.
00:03:53:01 - 00:04:14:07
Todd Sullivan
That's awesome. So, you know, at the time I'm sure there was a lot of demand and you do a good job and then you get the referrals and they just keep coming in. But those corporate clients, were you just still delivering, you know, websites and maybe a little bit of marketing in design or did you start taking this kind of industry specialty that I know you're really known for today?
00:04:14:08 - 00:04:53:13
Sameer Sood
Yeah, we really fell. So we started doing everything. I mean, everything like small business websites, logos, e-commerce solutions for large corporations. And then in the late 2000s, we began forming relationships with financial institutions. Wells Fargo became a major client. Bloomberg became a client. And in 2013, we started working with Capital One on their mobile application. And there were there were one of the first banks to move into the public cloud, which is very now it seems obvious, but at the time was a very controversial decision.
00:04:53:21 - 00:05:24:07
Sameer Sood
No one thought it was wise to trust financial data to Amazon or something like that. Now it's the default, but we began to help them through that journey and through that relationship. There was no premeditation of this. And this is sort of a recurring theme through my career. Serendipity just seems to strike and we began to learn more and more about both the need and the tremendous old archaic history of financial services.
00:05:24:14 - 00:05:47:05
Sameer Sood
70 year old systems that are written in programing languages that were meant for computers that took a whole room and the need to modernize those systems. So we quickly latched on to that sort of work. And of course, as you know, that relationship blossomed to the point that Capital One made us a cornerstone acquisition. And in their own digital transformation journey.
00:05:48:04 - 00:06:11:18
Todd Sullivan
Yeah, that's fantastic. I mean, you must have built in their eyes an amazing organization, right? That that's international. And then you've developed this expertise, taking them where really nobody else has gone. What I love about a lot of our clients is the ones that end up selling to strategic partnerships that they already have, right? Because you're a known quantity.
00:06:11:18 - 00:06:30:01
Todd Sullivan
There's fit there. You know what the expectations are, right? It's just a great way to sell a business. And if a client like that is willing to kind of make a take you off the table offer, right, why wouldn't you consider it? You're clearly a serial entrepreneur, right? You're going to do this again. So did you have an earnout?
00:06:30:01 - 00:06:32:13
Todd Sullivan
Did you go work work for Capital One at that point yet?
00:06:32:13 - 00:06:58:08
Sameer Sood
So we had a fairly unique deal that actually led to my life now. So we had a two year earnout with Capital One actually ended up staying three because I really enjoyed the people there in the work there. And we also we were bought for our technical proficiency, for our people, for some of the frameworks and libraries that we co-developed with Capital One.
00:06:58:23 - 00:07:22:01
Sameer Sood
But we also, of course, had dozens of other clients. And as we approached the acquisition, we went to Capital One and said, Look, we would like to create some sort of a structure that would allow these other clients to continue to be served and will I myself will come in house for two or three years and I won't work for any of the clients, neither will the team that we bring.
00:07:22:12 - 00:07:52:17
Sameer Sood
But are you opposed to us setting up a different entity and continuing to serve these clients? And they agreed to that and it's much to their credit. It's not something they had to agree to and that is actually what is Kunai. So we hired another CEO. He did a fantastic job and sort of got the company into a position where after my earnout and my time there, I was able to come back and rejoin what is essentially another manifestation of the same company.
00:07:53:04 - 00:08:18:21
Todd Sullivan
While I think there's a lot to unpack there. So, you know, during your M&A negotiation, right, you're asking if you can set up another organization to appease current customers and they're okay with that. So there must have been a lot of conversations around, you know, just the overall structure of your agreement. Right. They certainly don't they don't want to lose the intellectual horsepower in you.
00:08:19:05 - 00:08:28:00
Todd Sullivan
Right. But wow, I mean, what did you learn through that? What were like the toughest parts of that negotiation? Because it couldn't have been simple.
00:08:29:04 - 00:08:54:08
Sameer Sood
Yeah, it wasn't. And I mean, I wish I knew folks like you back then because we were flying very blind. So the biggest thing I learned is that you need to be unafraid to ask creative questions because this we we bemoaned this decision. We discussed it for weeks whether we should even bring it up. Is it we were very fearful that it might derail the deal.
00:08:54:08 - 00:09:14:03
Sameer Sood
They may think that we're trying to do something on the side. And what we learned from the experience is that the faster we throw our cards on the table, the more we ask for, and the more we were willing to give, the more surprised we were at how open the dealmaking side of the house was, where corporations seemed very large.
00:09:14:03 - 00:09:28:01
Sameer Sood
Corporations seem very rigid in so many other ways and they are in corp dev. There is a lot of flexibility, a lot of creative dealmakers, a lot of people accustomed to thinking about different ways to to get a deal done.
00:09:28:12 - 00:09:56:06
Todd Sullivan
Oh, that's fantastic. I think that's that's just a tough path for a lot of entrepreneurs is to be able to to traverse. I know, you know, our model is trying to bring the best investment banker in on that conversation to know the right time to ask for those things. And, you know, I would just encourage entrepreneurs, if they're in discussions like that, that whoever your advisors are, you're loading them up with, look, this is something that has to happen.
00:09:56:08 - 00:10:12:23
Todd Sullivan
Please figure it out. It's great to hear that, that at Capital One, the corporate development group could have that kind of flexibility and that you guys are able to pull that off yourself. I'm always amazed what entrepreneurs are able to do on their own. Can I ask you, do you think that did you leave anything on the table?
00:10:12:23 - 00:10:18:06
Todd Sullivan
Like what did you learn through that M&A experience because that was your first, right? I know you have subsequent ones.
00:10:18:10 - 00:10:47:13
Sameer Sood
Yeah, I would I would say with I looking back, we certainly left things on the table. The thing is that without a proper advisor, you sort of have this quadrant of you don't know what you don't know. So I couldn't tell you what I left on the table. What I can tell you is that in subsequent acquisitions that we've been part of, we've just had a more well-rounded idea of the set of possible outcomes going in.
00:10:48:05 - 00:11:16:17
Sameer Sood
And in this case, we didn't. In this case, we jumped on to the first suitor and we we operated both opportunistically. We did some smart things like start this other company, but we also operated out of fear during the deal making because we felt sort of young and exposed and that and just wanted them to say yes and sign so badly because it was so life changing for us that we probably moved too quickly.
00:11:16:17 - 00:11:30:22
Sameer Sood
On some negotiations, gave in a little bit too fast, sometimes without even negotiating. And in retrospect, that's something we would have handled differently today. And with Kunai, if we're blessed in the same way, we certainly will handle it differently.
00:11:31:00 - 00:11:49:17
Todd Sullivan
You know, I think that it's it's easy to say, right, looking back, that you could have done some different things, but you said it. You just created a life changing event for yourself, for employees. And what I always like to say, you put a win on the board, right? We're serial entrepreneurs. We're going to do this multiple times.
00:11:49:23 - 00:12:11:08
Todd Sullivan
You know, the next one's going to be easier when you've been from kind of beginning to end. So, you know, it's it's a journey. It's a career path. You're not just trying to get every last dollar every time, right? That's just not the right approach. So just commend you to be able to pull this off. Really. Did you have any advisors along the way, M&A attorneys, What did that look like?
00:12:11:08 - 00:12:35:05
Sameer Sood
We did we had a few M&A folks who we met during the process who joined on. We had advisors who were helping us previously to find a different deal and we ended up finding this deal on our own. But, you know, it's sort of it's beyond advice. I think there is a mindset and a confidence that you eventually gain.
00:12:35:05 - 00:12:54:20
Sameer Sood
And once you gain, that advice is actually actionable. You're not you're going into a meeting prepared to push for what it is you want, whereas before you could get great advice. But if you're not in that mindset, if you're the one at the table, you're just not going to navigate that in a in as effective a way.
00:12:55:04 - 00:13:18:07
Todd Sullivan
Yeah, it's a great point. I think the other thing that that always sticks in my mind is that you're running a business and now you're running an M&A process, right? In the last thing you want is for that business to slip. So one for me, one of the best reasons, aside from bringing the best talent to lower your risk and maximize your outcome, is really let you keep your eye on the ball.
00:13:18:07 - 00:13:42:12
Todd Sullivan
So I don't know how you pull it off, but I know is a fantastic outcome. And it seems like you got some of the terms that were incredibly meaningful to you up. Can we jump to the to the gaming company? Because I think this is so cool that you've developed this financial expertise and maybe architecture around kind of financial information for one of the largest companies in the world, specifically in finance.
00:13:42:17 - 00:13:50:00
Todd Sullivan
And now you used the assets that you've created to launch a gaming company. So can we can we hear about that yet?
00:13:50:14 - 00:14:17:13
Sameer Sood
So first things first, we're we monsoon is a consulting company, so we build stuff for other people and you know, years go by. We built the original mobile application for a company called Yammer, which became $1,000,000,000 company. We did a lot of work for Tom Shoes early on, became a multibillion dollar or not multiple $1,000,000,000 company. And so you start getting this FOMO as a consultant because you're like, I just did this for you, and now it's this huge thing.
00:14:18:00 - 00:14:45:21
Sameer Sood
And so you're constantly tempted to start your own things on the side. And we did that many times horribly because you you learn very quickly. You can't run both at the same time in a good way. And this gaming company, we were actually building gaming software for a company in India and it was a side project. It wasn't part of our core expertise, but we were all very fascinated by the technology and we have a partnership.
00:14:45:21 - 00:15:09:02
Sameer Sood
So there's four of us who run monsoon together and one of the members of our team, his name is Ankush Guerra. He got really engrossed in the technology in the business model of gaming in India, the Indian marketplace. And we're four guys in San Francisco. We may be Indian, but we're mostly American born. We're not really familiar with this market at all.
00:15:09:02 - 00:15:37:16
Sameer Sood
And then the client who we built this massive software application for, I decided they were not going to pay the last few invoices. So suddenly we are sitting with software that now belongs to us technically, because we have not been paid for this development. We have this one partner on our team who is obsessed with it and organically, the idea to start our own gaming company just kind of formed inside of Monsoon itself.
00:15:37:16 - 00:16:07:06
Sameer Sood
And then we did probably the smartest thing that led to this one actually succeeding where so many previous attempts didn't. We actually created a wall within the company. So Ankush decided to take this project on full time. I took over all his responsibilities at Monsoon and continue to run the service company, and he poured himself into this company and we used funds from profits in monsoon to fund this gaming company.
00:16:08:00 - 00:16:33:17
Sameer Sood
He eventually moved to India part time, took raised financing together with us. We found a bunch of great investors and he turned that into something far bigger than either a monsoon or a kunai is, or probably will be. And it's just been an incredible ride. And I'm I'm semi part of the ride. I sort of creatively figured out how to do this at the inception.
00:16:34:03 - 00:17:17:00
Sameer Sood
But really I was more of a fan and investor in empowering a close friend and business partner to go off and do this. And I think when people ask me about this journey and I think I see similarities in the way you work as well, it it would have been an impossible journey without the trust of our business partners and friends who just had each other's back completely because we had to negotiate what percentage of monsoon or are still owned, what percentage of this new gaming company Generally, we all had and we all had to go our separate ways and do backbreaking work without even knowing how hard the other party was working or what
00:17:17:00 - 00:17:34:18
Sameer Sood
was going on and trust that we were all working in each other's best interests. And it worked out for us. But I think if people are considering doing something like this, unless you have that depth of trust, you can't really do something like that with a high probability of success.
00:17:35:00 - 00:18:05:16
Todd Sullivan
Boy, great story. Yeah, that level of trust is very rare. It's tough to find when you find it. You know it right? And you know, I've started this is my fifth company and, you know, I can speak personally very, very difficult to find that that match. So you're really lucky to have to have found it. You know, I want to jump back because knowing that you were building jammers, technology, I was one of the TechCrunch 50 in 2009 and Yammer one.
00:18:05:23 - 00:18:21:17
Todd Sullivan
Right. So they really were number one. And I think I, I don't know if I was number 40, but probably if they kept me on the board after that, I was number 40. But and then they eventually sold to Microsoft. Big number, right?
00:18:22:04 - 00:18:44:00
Sameer Sood
And they had $1,000,000,000 acquisition. And really, I mean that the reason I brought them up as an example is just we were sort of the shovel. So as everyone was digging for gold and we were selling shovels and selling shovels is a great business, but you only get so rich selling shovels. And so this gaming company was the first time we tried to go off and dig for gold.
00:18:44:09 - 00:18:47:11
Todd Sullivan
And so that's still in existence, or did you end up selling it?
00:18:48:00 - 00:19:07:15
Sameer Sood
We sold our share to a company called Flutter Entertainment, or a large international gaming conglomerate, and we still own a small stake, so we're still very excited for Flutter to continue growing it. And Ankush who as the partner at Monsoon who went off and started it, he now works for Flutter as part of the acquisition.
00:19:07:23 - 00:19:32:09
Todd Sullivan
Oh, that's perfect. So you're able to transfer the right team in that acquisition, right? Which I'm sure drove a lot of value. So, okay, so now you got two exits under your belt and you've you've now you've worked at Capital One, now you got the time to leave and really focus on Kunai, right. Which has all the previous customers, I'm guessing, or clients that you had.
00:19:32:09 - 00:19:35:11
Todd Sullivan
Maybe not all of them have stayed, but it's grown. It's probably grown.
00:19:35:17 - 00:20:00:12
Sameer Sood
Yeah, many of them. And Capital One is one of our biggest clients still. So again, those are those long term relationships are probably one of the most defining points of my career. Just sort of continuing to invest and grow with the same kinds of clients. So Kunai is a consultancy dedicated to financial services and fintech, and the goal this time around.
00:20:00:12 - 00:20:34:04
Sameer Sood
I've now been in consulting for 20 years and you know, we were talking before we started recording today where I have made a lot of small bets that have paid out through my career. And I feel like this is not by any means my last company, but I feel like this is one of the first times where I'm fully putting my feet on the gas and just trying to see like, okay, I've always thought I can grow something to excite guys or get to this level of quality or this level of profitability.
00:20:34:22 - 00:20:44:13
Sameer Sood
No more half asking, can I actually get it all the way there? And, and so we are we're pushing very hard on and growing and making nice, accessible.
00:20:45:04 - 00:21:09:10
Todd Sullivan
Good for you. I want to get back to that. But before we go there, I feel like you said at the very beginning of this, Ray, you were not employable and that is why you ended up, you know, starting your own company. But you had three successful years at Capital One. What did you learn? Because I think a lot of founders, when we help sell their businesses, they're nervous about what is that role going to be.
00:21:09:10 - 00:21:23:11
Todd Sullivan
And certainly we define it ahead of time and we get great employment contracts in place. But ultimately, you're not the boss anymore. Can you talk about any of the learnings that you had at Capital One and what our fellow founders should embrace if they're in that position?
00:21:23:18 - 00:21:51:07
Sameer Sood
It is such a good question, I think, and a useful one for people who are considering selling. And so first of all, your my stress level went from massive to very little. So that's the biggest change in my life from running monsoon to going inside to Capital One is there is just no doubt that there is an easier pace of life as an executive in a corporation when compared to a hard charging CEO of a consulting company.
00:21:51:18 - 00:22:13:04
Sameer Sood
So that's the first thing, is just I understood why people were there, because the quality of life was incredibly different. But the biggest lesson I learned was actually I got humbled pretty hard at Capital One. I came in as a hotshot CEO. I've built this technology, I've done this. I singlehandedly did X or Y. You guys are a bunch of fuddy duddy corporate executives.
00:22:13:04 - 00:22:44:15
Sameer Sood
I'm going to show you how to actually move fast and do all this stuff. And within months I learned how arrogant of an attitude that was and how wrong it was. There were exceptionally smart people internally, but they were up against a Goliath. They're basically running the company the size of a small country, and they are managing relationships, disparate technologies, integrations, releases that affect millions of customers.
00:22:44:15 - 00:23:05:23
Sameer Sood
Tiny things you do that could cause an outage for millions of people. And I learned pretty quickly that in my own way, I had thought I was doing big things, but I was kind of playing small ball compared to what I saw. Some of the technologists inside Capital One doing. And so rather than what I thought, I thought I'd go in and sort of be a superstar and run things there.
00:23:05:23 - 00:23:29:21
Sameer Sood
I actually ended up learning so much from the executives there. And it has really grown me as a consultant because I now have an appreciation for the complexity of the challenges that these executives face. And so it's it's been a huge advantage starting Kunai because I'm able to empathize and structure projects in in a much different way now.
00:23:30:15 - 00:23:50:23
Todd Sullivan
Yeah, I bet having that perspective has got to be really valuable. It's a totally different skill set, right? The challenges are really far reaching. As entrepreneurs, we can fail fast, right? And in those corporate environments, you got to play it a lot safer in a lot of instances. And as entrepreneurs, we don't quite understand that. So great that you had that perspective.
00:23:51:10 - 00:24:11:03
Todd Sullivan
So so let's jump back to Kunai and it seems like you've put this goal in front of you. In a lot of times when I talk to my fellow founders, the goal is financial. It's like, what am I going to put in my pocket with you? It seems like there's this challenge to build something bigger and more sustainable than you did last time.
00:24:11:03 - 00:24:17:00
Todd Sullivan
What do you what do you think is driving that? If and maybe I'm wrong, maybe it is financial or.
00:24:17:00 - 00:24:37:17
Sameer Sood
Yeah, I know you're dead on. There's a deeper there's it's it's both a goal and a fascination. So just quick background and I promise I won't get too boring. What? The history of the history of strategy consulting. The history of consulting. So you think of McKinsey, B.C., storied consultancies that we've known for decades. It's a very recent history.
00:24:37:19 - 00:25:11:18
Sameer Sood
It's the sixties and seventies when BCG and McKinsey were started, and you have to get into the eighties or nineties before the Deloittes and the Accenture and all of them were started, their earlier instances of them. But really the modern framework for strategic and corporate consulting is a fairly recent phenomenon. And the way corporations use these consultancies in the recent past, the consultants would actually be in the boardrooms with CEOs helping them sort of decide on strategy for the year.
00:25:11:18 - 00:25:38:07
Sameer Sood
And to some extent that still happens. But most of these consultancies today, the way they make most of their money is as technology accelerators, they help with digital transformation. They're the companies that these large financial institutions and others go to when they need hundreds of programmers to build something very complex for them. They stick around for years. It's this unending dependency that these consultancies have created.
00:25:38:08 - 00:26:09:07
Sameer Sood
It's very lucrative. You just make billions every year as a result, and I see fundamental issues with that model. I see an incentive mismatch. I see large amounts of technical debt. I'm sure you heard recently about the Southwest outage where they they down too much of cranes for weeks. There is technical debt inside of these large institutions. There is I don't want to overexaggerate, but in some cases it's a ticking time bomb.
00:26:09:07 - 00:26:45:23
Sameer Sood
In other cases it's just technical debts that preventing them is handicapping them from accomplishing a lot as a company. And so I want to build sort of the next generation consulting model that is actually enabling these corporations to get out of this debt and and accomplish something that they're previously unable to do, so that it's an ambiguous sort of thing, but it's an intellectual fascination and it's an execution based fascination of how do we create the consultancy of the future and start delivering for these companies in a much more effective way.
00:26:46:15 - 00:27:06:15
Todd Sullivan
Oh, I love this. Right? I think we're similar in that instance in that, you know, I built and sold companies and then I started helping friends sell their businesses and then venture capital firms start coming in. I help sell businesses. And in the realization that, you know, the way it's done today is not fair to our fellow founders.
00:27:06:15 - 00:27:27:09
Todd Sullivan
And so we very much set out to say not only are we going to level the playing field, we're going to put all the power back into the entrepreneurs hands. And, you know, we feel like we're really, really changing that game. So it's very much for us a mission of passion, right? It is. It is purpose. So I love hearing that.
00:27:27:09 - 00:27:29:03
Todd Sullivan
I think maybe you could comment.
00:27:29:10 - 00:27:53:09
Sameer Sood
It comes across so clearly in interacting with you guys. And I'm sure like you've you've now started four or five companies and you just need something different to drive you after you've had a few exits because the money is not going to be as life changing anymore. You actually learned the hard way that about how much fulfillment it can actually buy you versus not.
00:27:53:21 - 00:28:09:05
Sameer Sood
And so you end up you still want to play a game, but you end up creating different rules for the game. Victory is looks different than it did before, and it's really the only way to keep yourself as engaged, at least in my case. And I'm sure it's fairly similar for you too.
00:28:10:00 - 00:28:32:06
Todd Sullivan
Yeah, I mean, that's that's kind of what I wanted to touch on is that it's it's easier, right, for us, having had some successes in the past, to say how important purpose is in what you're building, right? Because we have some luxury of being able to pick and choose where we're going to focus our time. But I don't know.
00:28:32:06 - 00:29:00:13
Todd Sullivan
I wish that my my advice to founders is when you find that purpose, the ability to give that hundred and 10% every day, it doesn't feel like work, right? It's so exciting to be working on a mission that you truly, truly believe in. And maybe you could comment How do we how do we give that advice to people who are like, Look, I need to make my first ex before I have the luxury of doing what you're talking about?
00:29:00:19 - 00:29:21:04
Sameer Sood
Yeah, it's such a it's such a paradox. And I don't have by the way, I think a lot of times in the valley you hear someone who's building a new calendaring tool and they're like, I'm going to change the world for the better. And you're like, No, actually you're going to incrementally improve scheduling and implement Like it's not this is not this vision that's as grandiose as you're making.
00:29:21:04 - 00:29:48:10
Sameer Sood
It sounds to be. But that said, it's just working for something else besides money. It's setting the goalposts. And I want to improve this. I want to obsess over this one little thing for three years and get lost in it and take it to a different level. And I think the paradox when you're selling your first company is you in many ways are desperate for that financial success you have.
00:29:48:10 - 00:30:14:02
Sameer Sood
Yes. Find it's so hard you're maybe barely making mortgages. I was maybe deeply in debt as I was. And you're you're grinding for that financial exit. But the paradox is that when you focus only on that financial exit, you end up shooting the company in the foot and you actually hurt your chances of a higher financial exit. And so there is this need and I don't know, I couldn't do it.
00:30:14:02 - 00:30:32:13
Sameer Sood
I was very much focused on the money at that point. But there is a higher probability of success if you're focused on some other goal post outside of money. But I mean, I don't know that I would feel qualified to tell an entrepreneur to do that for their first exit, because I certainly was not able to see that at the time.
00:30:33:00 - 00:30:54:19
Todd Sullivan
No. Yeah, I agree with you. I don't I never want to project onto a founder what they should do. It's a very personal decision whether they should sell a business. But to me, if you could materially change the economics of your life, it doesn't bring happiness. But to me it brings options. And I, you know, I would wish that for for every entrepreneur.
00:30:55:01 - 00:31:17:12
Todd Sullivan
I think you you alluded to this idea when you were in your first transaction of fear, right. Fear of this going away. I think that is one of the things, you know, doing my fifth company now is we don't make decisions based on fear, right? We know what our true north is. And it's making sure our clients, our fellow founders, create the exits they deserve.
00:31:17:12 - 00:31:24:18
Todd Sullivan
And that's when you have that one focus. Everything gets so much more enjoyable. It doesn't feel like work and you have purpose.
00:31:25:01 - 00:31:53:19
Sameer Sood
And the crazy thing is, is when that happens, the probability of a large financial outcome increase with debt. The that's just an interesting paradox because it's you're not focusing on the money, but because you're so focused on building the right service or product, your financial opportunities just exponentially go up. And so it's been a it's been a very fun lesson for me to learn that once you've truly free yourself to that and you're never fully free, it's always fun to get more money.
00:31:54:02 - 00:32:01:14
Sameer Sood
Yeah, but once you disengage from that to some extent, you're suddenly your chances of success are much, much higher than they were before.
00:32:02:01 - 00:32:21:18
Todd Sullivan
That's great, man. This is a great conversation. Let's let's let's jump into what we've tried once before, what's called a lightning round right? So or I don't maybe I should be calling it over time for for our hockey analogies but when when you sold in pick one of the companies. Right. So I guess I guess really monsoon would probably be the best one.
00:32:21:18 - 00:32:30:01
Todd Sullivan
But who is the first person that you called when you inked that deal? You put your signature on it and the wire transfers happened.
00:32:30:01 - 00:32:55:11
Sameer Sood
So it was my parents and it was because I come from an immigrant family and I had what my father considered to be the best programing job you could ever get out of college. And so he for years could not understand why the hell I would give up a six figure salary or whatever and go take this risk and work so hard.
00:32:56:11 - 00:33:15:08
Sameer Sood
And I got to tell him that it was because he took all his risk, because he came to this country with nothing, because he built this life for us. I almost felt like I had a duty to take this risk because and so that it was the most meaningful phone call after that, call them both. And just I tell him that we made it happen.
00:33:15:16 - 00:33:22:00
Todd Sullivan
Oh, I love that. That's fantastic. Okay. So did you celebrate with your team? And if so, what did you guys do for.
00:33:22:03 - 00:33:45:11
Sameer Sood
We did we actually we were a very close knit team. So the team in Oakland, California, we were out together multiple times a week. It was a very familial culture. And so we actually celebrated four weeks after there were a lot of partying, a lot of events at people's houses. We celebrated with the Capital One team quite a bit.
00:33:46:04 - 00:34:10:10
Sameer Sood
So it was a very jovial atmosphere and a lot of that credit goes to my co-founders. They're really the culture builders at Kunai and Monsoon and there they had just they were not only concerned about the acquisition going smoothly, they were concerned about every single person having a good outcome at Capital One. And the celebrations really drove that point home.
00:34:10:20 - 00:34:27:22
Todd Sullivan
That's great. Yeah, I know some of the bigger companies with with substantial corp dev groups know how to put on a party when it's when it's done. So that's. Yeah, that's good. Yeah. So how else, how did you reward yourself or do you buy a car, Did you buy a house. What was, what was your first purchase.
00:34:28:04 - 00:34:56:13
Sameer Sood
I feel thrilled that I fulfilled a lifelong dream, which was to learn how to surf. So I actually when the when the deal for Monsoon signed, I was actually in Costa Rica with my best friend at a surf camp, learning how to surf my first waves. And that has led to a ten year obsession since then. And so there was I actually didn't buy a big house afterwards, didn't buy an expensive car.
00:34:56:13 - 00:35:06:13
Sameer Sood
I spent a lot of money on travel and and trying to turn a 36 year old lanky Indian dude into a surfer. Oh, that's.
00:35:06:13 - 00:35:27:20
Todd Sullivan
A great story. Okay. Well, all right, so now you're running Kunai. You know, is there any last bit of advice that you would say to our founders? This story has been fantastic. And I think before you answer, it's very clear to me, our Less listeners have been telling us what they love. As they can see themselves in each one of our guests.
00:35:28:05 - 00:35:39:19
Todd Sullivan
And your stories are just so personal. I see a lot of the things you've been through, you know, in myself what, what what other last pieces of advice would you have for the audience?
00:35:39:23 - 00:36:03:21
Sameer Sood
Yeah, one thing I've been thinking about a lot lately, you know, so chat, beauty is the most recent trend that everyone's excited about. It was crypto for the years before that two sided marketplaces. And I just want to give a little voice to businesses that are more a grind it out, hustle for every damn dollar or do things that don't scale businesses.
00:36:04:12 - 00:36:35:13
Sameer Sood
I would just say as you're evaluating your probability for success, everyone is pushing you into these trends. Everyone's pushing you to go out and raise 10 million or $20 Million. But if you actually look at the numbers and if you look at the self-made millionaires and I guess 10 million years now is sort of the number everyone aspires to, you will find a lot more of those are people who scaled up their parking garage business or their digital consultancy or simpler types of models.
00:36:35:22 - 00:36:47:18
Sameer Sood
And I would just I would consider those if you already have a skill and you already have a few customers, it's often better to stick with that than it is to go shoot for the moon in a in a realm that you don't know as well.
00:36:48:10 - 00:37:18:05
Todd Sullivan
I think that's great. I, I often love talking about businesses that start with a customer in hand and I would add to it that those businesses that you're talking about are forced to look at profitability when these high flying, you know, dreams of a I and crypto and blockchain, you know, profitability is not on the horizon. It's about spend, grow and build and and that is to me, it's a much riskier proposition.
00:37:18:10 - 00:37:44:20
Todd Sullivan
Right? So I'm glad you gave a shout out to people that focus on profitable businesses. Right. I can tell you from an M&A perspective, what we know continues to be gold even in the times of like possible recession is if you have growth rate and you have profitability and you're in a market that has a big TAM total addressable market, there are buyers that are going to line up to take a look at that opportunity.
00:37:44:20 - 00:38:12:13
Todd Sullivan
But profitability is a big part of that. Yeah. So yeah, thank you. That's, that's I love that advice. 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 ex it was dot com and the Cashing Out podcast are for entertainment purposes.
00:38:12:13 - 00:38:17:20
Todd Sullivan
This should not be relied upon as the basis for investment decisions.