Selling a Disability-Focused Business with Mai Ling Chan and Martyn Sibley
Our hosts, Mai Ling and Martyn, decide to give the guests a break and just share some valuable information with you from their personal entrepreneurial experiences. So in this episode they talk all about exit strategies. You’ll learn about some of the various types of exits, tips on how to navigate the process of selling your business, and why it’s important to set yourself up for a successful exit from the outset.
Contact Mai Ling: MLC at mailingchan.com
Contact James: James at slptransitions.com
It is good to still ask questions from that other side of the fence as to sort of checking, how's this gonna work? And what does it mean? Have you done this before, and all that kind of stuff? So, it's good to provide the information you've been asked for. But it's also good to ask questions as well.
Welcome to exceptional leaders, with Mai Ling and Martyn, where we give you front row access to intimate conversations that are shaping the way the world is supporting disabled people. If it's happening, it's being shared here. I am Martyn.
Mai Ling 00:37
And I'm Mai Ling. And we are very excited to share our personal stories today because we're going to be chatting with you about exit strategies. I have created a couple of companies, and so has Martyn. And I know that people have asked me several times, so what's your exit strategy? And in the beginning, in my early years, I definitely had that blink blink. I don't even know what you're talking about exiting. I just now created my LLC. What about you, Martyn?
Yeah, this is surreal time. I think, as I've said quite a few times to you Mai Ling and on the show, that I'm very, very mission driven. So, if I'm really, really honest, I, and don't get me wrong, I don't mean that, if you are mission driven, it can't result in an acquisition. But I probably had some beliefs that if I was doing something around disability and social good, that, you know, maybe there couldn't or shouldn't be some financial kick back out the other side. So, I almost wasn't being an entrepreneur, I was being a sort of change maker that gradually stumbled into a business world. And so, I think you know that doesn't speak directly to the Airbnb acquisition. In the end, of course, it took through very entrepreneurial steps and processes. But earlier on, I probably didn't have some of those thought processes that I would educate or empower other people to have. But yeah, it was still an amazing process to go through. And obviously to come out the back end with saying we sold, cofounded, and sold a business to Airbnb is a pretty cool cocktail party story as well. So how about you Mai Ling? How is it for you?
Mai Ling 02:16
You know, both of my companies have been really personal. The first one is interesting, I don't think I've ever shared this on the show, it was called emommie, "e m o m m i e" (https://www.thebraggingmommy.com/emommie-com-inexpensive-maternity-clothing-review-and-giveaway/). And it was back when eBay first launched, it was a new and used maternity clothes site. And I was literally purchasing used maternity clothes. So, people would send them to me in a box and I would go through it, I would check them out, I would put it on my mannequin that had a little pregnant belly. And I would sell them, you know, piece by piece. I mean, talk about labor intensive. But then I also finally got a, an agreement with these places out of New York because I was on the East Coast, and I was able to buy stuff off season. And that was a big thing. Because back in the day, you know, you couldn't get everything on the internet. So, this was pretty incredible. This was 1999. But what I wanted to say about this is that business was just me all by myself and my family. But I called it my baby. And that's a funny thing because it was called emommie right? Yeah, yeah. So, I call it my baby. And I never thought I was going to exit you know, put that in quotes. And I was going to grow this, and it's gonna be a mom and pop shop forever. And then my second one is, and I ended up in, I did sell that to a wonderful woman who also ran it for a number of years. But my second one, which is XceptionalEd (https://xceptionaled.com/), I still refer to it as my baby. But because I had co-founders, you know, it was more of a team effort. We're all in this together, any of the decisions we made were collective, you know, that type of thing, even though I still had, you know, most of the decision making. So, it's interesting, you know, when you start out on your journey, thinking about how you're going to end it. But I think that you and I now, now that we've had this experience of actually selling our companies, I think that we do the next company, I do go into I'm going to be thinking about that, right? And plus, because I'm older, so older and wiser.
Yeah, I think yeah, that that sort of wisdom and experience comes in time, I By the way, you do not look older Mai Ling. You look young, way younger than I do very glamorous or some entrepreneurial women. But I think that that yeah, your point is absolutely right about knowing from the beginning, what that that end in sight looks like and what's that objective. And that's why I gave that little reference earlier that, you know, for me, maybe it wasn't about selling or exiting. It wasn't even in my mind, but actually that, you know, that wasn't necessarily a positive thing. So I hope that point alone just changes some people's mind that even if you are looking to go out and create some sort of social movement or you know something that's less about business, just be open to the fact that it could consequentially have a big value in our entrepreneurial sense. And I've even had a couple of conversations today that there are quite a lot of people with a disability that definitely have that thing around the stigma of poverty and unemployment and scarcity. And so, I just think it's almost a tangent point. But it's actually very important when we're talking here to potentially entrepreneurs over disability, that don't limit yourself. Right? Yeah, it's such a big message I keep, I'm a big proponent of you know, you can have it all, basically everything is possible. When I think that's a really good thing to talk about. I think there were there were four points, we'd sort of, you know, you know, a little bit of planning and getting set up for today's, we had a quick brainstorm, and there's sort of four types of exits probably good, just to give a little bit of a punchy nuts and bolts here. So, I'll read out a couple of our notes, Mai Ling, and then you can always share the other couple, we sort of divvy them up 50-50, right. But the first one is, there's no exits, as some people, they can just stay on as a founder and CEO for forever. Some people might have heard of it as a lifestyle company exit. So that's just around that you're not reinvesting the profits back in to keep growing and scaling. But actually, you're onto a good thing. It pays you what you want to live off, you know, get covers the mortgage covers some holidays, all that kind of good stuff. And, you know, that is enough for some people, and that's fine. Like, if that's the entrepreneur’s preference, that's an absolutely fine way to look at your exit. Mai Ling do you want to come in on that one for a second as well.
Mai Ling 06:24
I do. I have a staffing company that I've had for oh my gosh, I don't even know maybe nine years old, 10 years. And it's a small staffing company. I've grown it to five full time contract employees at once. And now I have two I've worked for it myself. Providing clinical services and it, lovely little business that I have Martyn I love it. I love just taking care of, I call it my peeps, and I still have, it's called Surprise Therapies (https://orthopedic.io/physio-clinic/surprise-therapies-llc-surprise-az/). And I've never had the goal to grow it into some huge staffing company and selling it even though I've actually been approached a couple times. You know like, you know, would you like talk about acquisition? And I'm like, dude, I don't have really anything to acquire. Hahahaha.
I think that's a really important point as well, that it's not that as an entrepreneur, it's one of these. So, the other ones we're going to talk about, but it you know, you could have multiple companies. And each of them you might have that different type of exit plan. So as ever in life, it's never binary, right?
Mai Ling 07:21
Yeah, absolutely. That's great. Okay, what's the second one,
The second one is around a sale. So, it's a complete acquisition. And you could stay on as a consultant or have a temporary transition period. But it's literally that 100% kind of entity.
Mai Ling 07:37
So, did you have that with your sale of Accomable (https://en.wikipedia.org/wiki/Accomable)?
Yeah, thank you for like weaving into our stories, I think it's good to have the punchy nuts and bolts, but it's good to have the experiential storytelling. So as some of you may know, I actually interviewed Srin (https://srinmadipalli.com/) on Mai Ling and my podcast when we first joined forces. Srin was one of the first guests on the show. And so the way it played out was I was always very much more the sort of content production and community marketing side and Srin was very much the learn to code, you know, creating the product so that the actual website did all the things we needed. And then we both tried to work on the business development and bring in the different property owners and that kind of stuff. And so yeah, I think, you know, when we started out, that was how we, we geared things up and how it worked. But as it got more after sort of angel investment, and ultimately with it going into Airbnb, I think it's fair to say that Srin's value sort of propositions, these are business terms, but Srin's skills was more what was needed to keep Accomable, growing, but more so it was what Airbnb were looking for. So once the acquisition happened, to answer your question, yes, it was a complete sale. And then Srin was brought on as the sort of accessibility Product Manager. So, he then went to San Francisco, obviously, we both from England, living in England. So that was such a cool opportunity. And so, he ended up working for a good couple of years in San Francisco to continue bringing that value that we've done at Accomable, more into Airbnb’s DNA, and the Airbnb’s ecosystem. So, it had some of that that you thought we talked about whether it's consultant or temporary transition period. So Srin was kept on and did quite a lot of work for Airbnb, whereas I was free to carry on. Obviously, there was an NDA, or non competes and all that kind of stuff. But I was very immediately already, in fact, prior to the sale, doing stuff on Disability Horizons (https://disabilityhorizons.com/), which we talked about before, but yeah, so the direct answer is, that was a complete sale anyway.
Mai Ling 09:48
Yes. And you can listen to this wonderful interview with Martyn that I did. Two years ago, now on the Xceptional Podcast Network (https://podcasts.apple.com/us/podcast/xceptional-leaders-with-mai-ling-chan-martyn-sibley/id1435433350). That's how we met but he definitely deep dives into this and that was fantastic. I did make a note here, Martyn that I wanted to talk about non-compete, I also had the sale of Emommie, and I stayed on for two months, and that was weaved into the sale. So that, you know, amount was included in there. But I also agreed not to start a likeminded company anything like it not to use any of the contacts that I had had, you know, to create that, because think about it. I mean, you already know what you're doing to do it again, would be so much easier, and you could just blow out your buyer, you know, essentially. Right. So, did you have any issues with that? Because you know, your expertise, your experience, your passion was all in this area. So how were you able to move on without, you know, using any of these skills?
Yeah, I mean, I think just a broader point is that, you know, I think that some procedural things we'll go through in a minute as well. But it's quite an arduous process, it's like, a lot goes on behind the scenes with the sort of negotiate and the conversations and then the contracts. And so yeah, I think it was fair to say that it, it wasn't going to be allowed, like you just said that. You just set up shop day after within a day and don’t call it Accomable but call it something very similar and you knock up another pizza version. That's just not, as we say in England, that's just not cracker. So there definitely were stipulations. But also, I'm sort of just thinking, as we're talking, there was a hell of a lot of things in that contract that my general go to decision is don't say too much, because there were all sorts of NDAs and non-disclosure agreements that went into it. So obviously, where we are very able to talk about the experience more broadly, and what we learn to pass on to our listeners in different ways, but there was a hell of a lot of clauses of things you could and couldn't do afterwards. And that paperwork was pretty crazy, to be honest.
Mai Ling 11:54
Wow. Yeah. Well, we'll get into that later on. Can I move on to the next point?
Yes, please do.
Mai Ling 12:00
Okay, so let's talk about mergers. So, we're calling it mergers and acquisitions. I personally just went through this just recently, with XceptionalEd and with my cofounding partners, we were acquired by Verge Learning (https://learnwithverge.com/), which is an online teletherapy company and also a startup. And this has been an absolute joy Martyn, everyone that I talked to about this, I tell them that we were looking for a partner for years, or buyout, like we definitely had an exit strategy in that it was either going to be a merger partnership buyout. So we did pitches and I don't know how many people listening, if you've thought about doing a pitch and an actual creating a pitch deck, sitting down with investors, we've done that and the first time you do it, it's incredible. You have this big high and then like the 20th, you're like, okay, here we go. But and that's just 20. I mean, I know people now of course, I'm with Cognixion (https://www.cognixion.com/), Martyn, and I can't even tell you how many our founder Andreas Forsland has done. But it's an amazing, amazing journey. And the merger part is the coming together of two existing groups. And that's just really amazing. And I can just tell you, it's been a absolute smooth ride with our company, but it was because we knew what we were looking for in terms of culture, mission values. And so, if you can find somebody pretty quickly, you know, in that first five, I'd say meetings, that's such a blessing. I've even heard that 20 is not a lot. You know, obviously, we even did that in under three years. So, the whole thing's been amazing. I do want to bring up though there are agreements there where you're going to be losing your controlling interest, which is hard, especially if you have the “my baby” mentality, right? Also, the ability to make the final decision. So yes, you're an authority, but you're not the one to make the final decisions, and then also deciding what exactly is your role and responsibility. So I was CEO of XceptionalEd, and now I'm director of, and that's definitely a step down in terms of title, but it's actually kind of a relief in terms of responsibilities, you know, so it depends on what you're looking for.
Mai Ling [Sponsor Ad] 14:01
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Mai Ling 14:53
Now, let's get back to our discussion about exit strategies.
Yeah, I think there's a point just broadly to make around self-awareness of, you know, when you start, it might be all about the title and the responsibility and my baby and all that stuff we've talked about. And then you know, over time, life changes, right? And there's different reasons that you get to a point in life where you don't want or need the title or the responsibility. And so that shift is a very natural, comfortable one. But yeah, if it doesn't feel natural and comfortable, and it's feeling a bit like scary and awkward that you're giving up that control, then obviously, there's a self-awareness. Why is that? And ultimately, is that the right next step, if you like? And I think the other, you know, looking back on our Accomable journey, was it kind of fits more on the merger in a way was we had angel investments that we didn't lose the title or the sort of controlling element, we still were the majority owners and had the final decision. But there were you know, basically it was investment that other people put money in. So, we went from two, we weren't actually in a garage. But it's like the old entrepreneurial startup story being in a garage. Right? You know, it was not, that was me and Srin, it was just the two of us. And we got some social impact grant money. And then we got that angel investment. So, you could sort of call that a merger in the sense that you're merging with other entities. But it more came via that, that yeah, investment and put in finances on more like a silent partner, if you like, whereas the merger you're talking about is where that dynamic shifted sort of much more around who got the final sale was the CEO. Right.
Mai Ling 16:41
Right. Right. Okay. And the last one is IPO Initial Public Offering, and you're selling shares of stock in your company, I have never gotten there. And I actually don't know anyone who's done that yet. Do you?
Not personally, we've all read about it. Right? But not personally. One day.
Mai Ling 16:58
Fantastic. All right. Well, you brought this up before, and I want to talk about timing. So, you know, when you finally do find that perfect match, you know, how long does it actually take to getting to the finish line. And there's actually there's, there's timing around it in the beginning. And after you sign the dotted line. And so, I want to talk about the negotiation period, you know, everybody, you're on a high, everything sounds great. And then now you really start talking about the nitty gritty, and also due diligence, you know, getting all of the paperwork. And so I highly recommend that you start using something like QuickBooks, something that is a credible quantitative delivery system for your data, because they're going to want to know, not just you know, how much money you have in your bank account. But really, you know, how active your sales have been, or your whatever your services are, they're going to want to see some historical information. And so, I've always had to make sure that I was keeping the books really well, or some way of reporting that because they really need to see that. And it might not just be the person you're talking to who might love you, you know, oh, yeah, we love you. It doesn't matter what it is, we want you, they have to up level that. So, they may have other decision makers, they may have an accounting department and lawyers. So, I highly recommend that you start from the beginning getting all of those ducks in a row. What do you say about that, Martyn?
Yeah, I guess the biggest thoughts to share really is just, if you've had the right processes, and software's and even the right professionals, yeah, having like a good accountant, and all that kind of stuff around you in earlier on, it certainly makes that whole process a lot smoother. But an equally, it's not the end of the world. If you've not done all of that. I mean, obviously, it's just good housekeeping. But ultimately, in the end, you are going to have to put all that as you just said really Mai Ling, put all that information together in it, it can be quite forlorn. And there's a lot of questions that you might not have imagined being asked about all sorts of things. But you know, at the end of the day, that's due diligence. And I guess also, as much as there's a lot being asked from the other side to you, it's I probably just want to say it's fine to ask questions the other way around it, you know, it takes two to tango, right? So, I mean, it is good to still ask questions from that other side of the fence as to sort of checking, well, how's this gonna work? What does it mean? And have you done this before and all that kind of stuff. So, it's good to provide the information you've been asked of, but it's also good to ask questions as well.
Mai Ling 19:26
Yeah, I love what you're bringing up. I'm definitely somebody who asks a million questions. And it's kind of like, do it now or forever, hold your peace. You know, if you didn't ask, it's going to be too late later. But the other thing is also to just be careful. If you're too defensive and too protective you're not going to get to the finish line, right?
Yeah. It's that it's a balance, isn't it? It's a real balance.
Mai Ling 19:46
Yeah. All right. Well, the next one is paperwork. Gosh, this is going back to, you know, providing your data but also the legal review. So, I feel like I've become an accountant and a lawyer. After all of the business dealings, I've done. What about you Martyn?
Yeah, was interviewed on another podcast today that came up around sort of playing to your strengths and having others around you with this, it doesn't mean that accounting or legal isn't a strength, but it's also about how many hours there are in a day and all that sort of, you know, being able to have everything moving forward and not have it all on your shoulders to the point that you burn out or collapse or whatever. And I think that's what I found, again, it's about balance, right? It's so many things about balance, but you have to have a good enough understanding of what the legal terms and the process are, likewise with the accountancy and the figures. But at the same time, it's good to have an accountant and a lawyer, that are able to do the heavy lifting and give that advice to protect your corner, really. So, it's don't feel you have to suddenly have qualified for law and do all of it on your own. you outsource that help, but still have the wherewithal to understand it enough.
Mai Ling 21:05
Yeah, I do want to jump in on this. Because I know when you're a startup, most of us did not have you know, all of this investment money to get started. And so, you are really robbing Peter to pay Paul type of thing. And I have to say, when it's time to get the legal representation that you need, you can go to the Small Business Association, I'm sure that they have, do they have support in England Martyn?
Yeah, I probably have the exact bodies, but I know I use my network. That's another point I would say is, you know, I'm involved in like a local SME, small medium enterprise business networking group, I spoke to my uncle who started and sold his own businesses. So actually, that's a really good takeaway is just, you know, ask around the right networks. And so, the body you just said Mai Ling, I might not have known that myself, but someone else would have, would know it.
Mai Ling 21:55
Excellent, yes. And mentors, this is the time that you reach out to those mentors that you've connected with, and even in other fields in different areas of expertise, for them to take a look or give you ideas. This is the time to not be shy. I have actually told people you know what the number is just to say, you know, what do you think, just to be honest, like Martyn, you have to have those people and you're one of mine, a close confidant and mentor that I can really say, look, you know, we're ready to pull the plug on this. What do you think?
Yeah. And again, it's that balance, because, you know, you're not going to put on Facebook or LinkedIn. What does anyone think to this number? Obviously, you will play the whole deal out the wall, right? Yeah, exactly. It's picking those is having a close counsel, basically. And those confidant as you say, we're lucky that we have each other for that kind of stuff. And I'm sure if people listening don't feel they have that, you know that there's always someone when you really get down to where that would have that experience to help you just have to ask and a bit or your point about pitching. And some might say, sorry, you know, not got time at the moment, but then eventually someone will say, Yes,
Mai Ling 23:03
Cool. So, we're getting tight for time, we'll try and rattle through the last few bits of the process quite quickly. But the next one is around team meetings. I guess it's just having those internal conversations that is everyone in the team happy with the direction because particularly if you know, the team are going to be kept on, then you definitely need the team to be happy with the next steps. And even if they're not going to be kept on it still, you know, they've been there to get the business to that point. Right. So, it's just courtesy and goodwill, just to check in really. So, I think that one probably explains itself. Should I say the next one, Mai Ling?
Mai Ling 23:40
Sure. Next one I like is the honeymoon period. And that's those first couple of months after you've, you know, made whatever decisions you're doing, you know, how is it really working out for you? I know when I sold my first company, I kind of felt like a fish out of water have to say I think I think I consulted too much. I was like, do you need anything? Do you need anything? I'm here. And then with the second one, it's just been wonderful. So, this honeymoon period is going really well. How about you?
That's good to hear. Oh, yeah, I think what's lovely that we both have different experiences. And we've outlined all these different scenarios or these different variables. And as I mentioned, for me, I was less hands on with Accomable when it ultimately was acquired. So that wasn't that exact thing going on of like, I wasn't that adiem either way, Srin was, I was cracking on with those other things. But yeah, again, I've got lots of friends that have shared that that element of it. I you know, I think go say just to mention that with Purple Goat at the moment, we're flying. And we're very much looking at what is our value proposition? How does it become attractive down the road to a big marketing agency? And so yeah, I think even for me, it's great to hear some of these stories that you're sharing because there are parts of it. I'm yet to experience anyway.
Mai Ling 24:59
That's great. And then last one is public announcement. This is so cool. I definitely thought it was like you sign the dotted line and you know; you do the press release. But I've realized that it's so much better to wait, you know, make any changes that you've decided to do, us personally, we did a whole revamp to our websites, we're really excited to share that. But the PR release came out probably, I think, two months after we actually signed everything. And so, when it came out, you know, everyone's saying, congratulations, I was like, Oh, this is old news.
Yeah, actually, that's something I definitely can throw an experience in the ring. One is that we had a lot of press about Accomable and Airbnb, because, you know, it was two disabled founders that had angel investments, sold to a big brand big company like Airbnb, and we were in BBC, TechCrunch. Like, literally all the big business sort of, and particularly the tech business media just loved it, because it was such a novel story. And so yeah, there was a lot of press, and there are pictures of us, and when we how we got the thing going in those early days, which was lovely to look back on everything we achieve. Really?
Mai Ling 26:07
Yeah. And after that, that's when you earned the third most influential person with a disability in 2016. Correct?
Yeah, it was all around then. Yeah, absolutely. It definitely helped put me on the map more of a as an influencer say, yeah, it's cool. Yeah, I definitely love that thing. Steve Jobs says that, when you look back, you see how the dots join. So, it was like, the blogging, the magazine, the travels, I just did, because I love him, etc., etc., all led to that, that point. And I guess that's probably something to say as well, as, you know, sometimes when you're going through that process, it can be quite stressful when there's things going on behind the scenes. But our public announcement was a nice moment to take stock and have gratitude for oh, really.
Mai Ling 26:48
Wow, I love that. I also wanted to share that I had made a note that you definitely need to let your existing customers and clients know, especially people that are really close and have built up with you like I wanted them to know, before the PR release came out. And so, I made sure that we sent an email to everyone. And I was like, if you want to meet, I'd love to talk with you. Because you know, they feel part of the whole growth of it. And so, I think that they want to be a part of the next step.
Yeah, yeah, I totally agree. We've got a note to finish up with a kind of learning. Like, I think we are tight for time, but I think we could probably just give a one liner, have you got something that stands out for you, for anyone listening, Mai Ling? That is thinking about or currently growing a start up on how to exit?
Mai Ling 27:30
Absolutely, you kind of stole it from me, but I'm going to highlight it and that was these two things. One is that everything works itself out in its own time, and the way that it's supposed to, like you said, looking back, you know, everything has happened the way it's supposed to. And so that wrapped into my other one, which is you just can't rush this process, you know, you want to but you just can't and you're growing every minute, I just want you to know the challenging times the exciting times. All of that is part of your journey, and it's taking you to whatever this end is for you your exit strategy.
Yeah, that's amazing. I'm gonna build on top of that because I think that really is the key takeaway. And I totally agree. And I suppose just to look at it the other way around, if you're starting, do have that end in mind. But like, it will not be a linear line from A to B. It's a really squiggly roller coaster. So, it is echoing your point. And it says that, yeah, that sentiment of, you know, go with the flow. Try not to get emotional about the ups and the downs, try and stay sort of emotionally down the middle where possible. And yeah, essentially know that if you keep up, it will happen.
Mai Ling 28:38
Excellent. Well, thank you so much for joining us for this episode, Martyn and I wanted to make it very specifically focused to disability focused offerings, whether it's a nonprofit, a product, a company, a platform, a website, I mean, there's so many things that I'm sure you are creating, but just knowing that the people that you are serving will forever benefit from what you've created. And it's okay to start thinking about how you're going to step back a little bit.
Yeah. 100%. Thanks for listening, everyone.
Mai Ling 29:06
It was my absolute pleasure. Thanks so much for joining us for this episode, and I invite you to connect with me directly at mailingchan.com. We also want you to let us know what you think about the show, ideas and how we can continue to help you or referrals to a great guest through our Facebook group at Exceptional Leaders Podcast or email us at email@example.com
Yes, Mai Ling I totally agree to that I know we're both really mission driven people. And for me, it's always been this big mission to have a world that's fully inclusive for all people. And in the end, that's probably why we've bonded and come together, so well on this podcast, exceptional leaders podcast (https://podcasts.apple.com/us/podcast/xceptional-leaders-with-mai-ling-chan-martyn-sibley/id1435433350), because we get to meet cool people, give them a platform to share their story and really just make such an impact in the disability world. I love it. Also, for everyone listening please do head over to disabilityhorizons.com. This is the magazine that I co-founded about 10 years ago and we've got a free mailing list there for all the latest article news and discounts for the shop if that's your kind of thing. And definitely, definitely do get your copy of the Becoming an Exceptional Leader book. We want you to get as much information as you need and to be as successful as you can be.
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