Holly founded ExitPromise.com as well as StartupPromise.com and so far has answered more than 3,000 questions asked by business owners about starting, growing and selling a business.
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This is the third part of a three part series telling how one entrepreneur took a chance on an emerging market, weathered an economic storm, and exited a business with a bright future.
‘Nothing I Would Have Done Differently’
It was 2010 and for Richard Hagerty, a Pittsburgh-based entrepreneur and CEO of the search-marketing agency IMPAQT, the time had come.
After starting IMPAQT in 1999, Hagerty had seen the company master its market, experience periods of rapid growth, and successfully weather tough economic times.
Hagerty had been informed that the nation’s largest customer relationship marketing agency Merkle was looking to acquire a search marketing firm, so he decided to reach out. Shortly thereafter he met with the company’s officials at their headquarters in Maryland. The seeds to what became a healthy business relationship had been sown.
He had received acquisition interest before. Back in 2007 and right before the economy took a turn for the worse, he entertained some thoughts about getting out but never took them too seriously. There were even some lowball offers thrown around during the recession from outside companies figuring it would be a good time to swoop in and acquire IMPAQT on the cheap.
As 2009 and 2010 dragged on and the economy slowly turned the corner, more interest started coming in and this time Hagerty was really listening.
One thing became clear to Hagerty after his first meeting with eventual successful bidder: he liked the way Merkle did business. After starting IMPAQT from the ground-up, the last thing he was looking to do was to relinquish rights to the company he worked so hard to create to an organization that wouldn’t uphold his reputation for integrity following his departure.
The two came to an agreement several months after the initial meeting and began a three-month period of due diligence. In February of 2011, Hagerty sold his company for the sum he was looking for with the stipulation that he accept a two-year earn-out.
In detailing the acquisition process, Hagerty commended the work of an experienced Exit Planner, whom he said was right by his side with valuable advice every step of the way. He hired his Exit Planner nearly four years before selling his business which proved to be a smart move. The planner was able to help Hagerty resolve a customer concentration issue and decipher the various deal terms that came his way over those years. Hagerty said that the expertise brought to the table by the exit planner gave him the assurance he needed to move forward with the deal when the time and terms were right. It was time for this entrepreneur to execute his exit plan.
“It was absolutely the best,” Hagerty said of his advisor.
He still remembers the day he signed his company away, or in his words, “the most insane day of my entire business life.”
Hagerty said he was caught off-guard when the final word came through letting him know that the deal had been finalized. He had imagined the closing procedure would be a longer, more drawn-out ordeal.
“I always thought I’d be celebrating it with champagne,” Hagerty joked. “It was just crazy to think that it had happened during a conference call.”
As required by the contract, Hagerty spent the next two years stepping away from the company he built.
What’s next for the career entrepreneur? Well, he’s been spending a lot of time recently traveling on his motorcycle, a longtime passion of his.
But don’t be fooled. By no means does the 66-year old plan on calling this a retirement. Hagerty said he’s currently interested in pursuing his next business venture, whatever it may be, and hopes to not just focus on one thing per se.
“I think that several opportunities are going to come to mind…I sort of look at my future as that,” Hagerty said. “I’d like to be involved in a few things.”
As Hagerty now open-endedly ponders his next move, he knows one thing for sure. He has no regrets.
“It was a long journey, but a successful one,” he said. “There’s really nothing I would have done differently.”
Good story, but I wonder how he might have felt if he had spent some time figuring out how he would spend his post-ownership life, BEFORE he started the selling process. At Successful Transition Planning Institute we empower owners to use their planning skills to their personal future.
Had Richard done so, by the time his contract was up, he’d have already put into place his plan for 10 lifestyle areas. He’d have laid the foundation to his opportunity to experience meaning and fulfill his life’s purpose. He may have lost two precious years. He also risks making imbalanced decisions, becoming bored, and maybe entering Post Transaction Stress Disorder (the other PTSD). A set of meetings over a few months of planning with a qualified consultant or coach might have made this an even better experience for Richard. A missed opportunity for personal growth.