Learn from Alex Bean's $2.5B exit: avoid the post-sale happiness trap and preserve your relationships after a big win.
Your Weekly Pilot Briefing
In this week's episode, Alex discusses many topics that we see clients dealing with regularly. For example, at 4:45, Alex discusses his thought process concerning taking outside funding and recommends looking at your total addressable market and your scalability before deciding whether raising capital is the right choice. Raising venture capital will dilute your ownership, so there is a tradeoff between your ability to grow quickly and the new realities of not owning 100% of your company. His company, Divvy, had a large TAM and was exceptionally scalable; therefore, raising capital was throwing gasoline on a roaring fire. This led to a multibillion-dollar valuation and successful exit. However, Alex also uses a landscaping company as an example where outside funding would likely not increase enterprise value based on its limited scalability and small regional market.
Some other interesting discussions are timestamped below:
8:00 – The value of an accountability partner (Board of Directors/Family/Friend).
11:00 – Being ready for the risk of losing your identity/purpose after a sale. Who am I?
21:45 – Understanding your output framework (Money, Time, Relationships) and that money does not always = happiness.
23:25 – Little decisions significantly impact your future. Understanding your relationship with money.
33:00 – The “Disease of More” and how to inoculate yourself from it.
36:00 – Give yourself six months to breathe after a sale. “Settle In” before making sweeping financial changes.
40:15 – The “Bank of Mom and Dad” Exercise
47:00 – Talking to your kids about money… “I have a lot of money, you don’t”
Finally, at the very end of the conversation, there were some real gems when Alex discussed knowing how long to stay in your business. He tells us to ask ourselves if we “still love it” and whether we are being pushed out of the company or pulled toward the next chapter (family, philanthropy, etc.). Flight Plan Strategies has an excellent PreScore assessment addressing many of these issues. If you would like to secure your personalized PreScore assessment report, please feel free to click here: [PreScore Link]
About this Episode
Alex Bean sold his company, Divvy, for $2.5 billion. But after reaching this monumental milestone, why didn’t the sale bring him the happiness he expected? In this episode, Alex shares his journey and the lessons he learned about life after a business exit.
Listeners of Built to Sell Radio will discover how to:
Evaluate if your business should raise capital or grow organically.
Talk to your kids about money (without undermining their motivation).
Avoid the happiness trap and find purpose after selling your business.
Steer clear of the “disease of more” when making financial decisions post-sale.
Preserve and improve relationships with family and investors after a big liquidity event.
About Our Guest
Alex Bean
Alex Bean is the co-founder of Divvy, a leading finance and spend management platform designed to streamline expense tracking, budgeting, and financial operations for businesses of all sizes.
Under his leadership, Divvy has revolutionized how companies manage their spending, offering a seamless combination of corporate cards, real-time expense tracking, and budget oversight in one easy-to-use platform.
Known for his entrepreneurial spirit and vision, Alex has been at the forefront of fintech innovation, helping businesses gain better control over their finances.
Before founding Divvy, Alex held key roles in business development and strategy, shaping his approach to solving critical challenges faced by modern businesses.
Definitions
Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.
Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.
Are you personally ready for what should be the happiest day of your life?
By analyzing 40,000 business owners and conducting hundreds of in-depth interviews with owners who have recently sold their business, we have determined that there are 4 major drivers that lead to an exit without regret.
Future Vision: Why do you want to exit your business? What do you plan to do after you leave your business?
Personal Detachment: How attached are you personally to your business? Have you built a fulfilling life outside of your company?
Team Involvement: Have you considered how your employees will be treated when you exit your company?
Structuring Flexibility: How much is your business worth to you? What is your bottom line? Have you considered the practical financial questions surrounding your exit?
Click the link below to take your 8-minute, 12-question PreScore assessment and take the first step toward making a profound impact on the second half of your life.
Commentaires