6 Lessons From Selling Your Company to a Growth Equity Investor
“Jon Morris, founder of Rise Interactive, decided he wanted to move away from using his own funds to grow his business and instead bring on an investor. Jon shares his story that includes his eventual exit from his business,” states Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “Many tips on taking on an investor to agreeing to an earn out.”
Despite starting with just $10,000 in 2004, Jon Morris built Rise Interactive, a digital marketing agency, to more than 100 employees before deciding to sell part of the business to Quad, a global marketing services provider.
After two years with Quad as a minority partner, Morris decided to sell the remaining chunk of his equity to Quad in a second transaction. Morris recently left Quad after his two-year earn-out was up. In this episode, Morris shares what he had learned about the process of building to sell, including:
- The simple acid test Rise used to ensure each of their 250 employees lived their brand.
- What he found most challenging about raising money.
- The challenges associated with negotiating with “follower” investors.
- How much of a growth capital partner’s investment you get to keep.
- The unique way Quad incentivized him to stay through his earn-out.
- The three things that should be in your operating agreement with investors.