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Masterclass Setup: Selling a Company With Few Reps
Shaan explains that this masterclass follows his earlier one on raising money and covers the end of a company's life: selling it. He is repurposing an old HustleCon talk because little good content exists on selling and founders get few repetitions at it.
- •Follow-up to his earlier masterclass on raising money and pitch decks
- •Repurposed from a HustleCon presentation given years ago
- •Management and sales get daily practice, but selling a company happens maybe once every four to ten years
- •He has sold two companies, one to Twitch (owned by Amazon) and Milk Road to two private buyers
You're Not Instagram: Most Companies Are Sold, Not Bought
Using Kevin Systrom and Instagram as a contrast, Shaan says most founders lack that kind of leverage. He argues that while great companies are bought, most companies are sold, and his own exits came from running a process.
- •Instagram's founder had huge bargaining power, which most founders don't
- •Shaan's businesses were good but early, not sensational
- •"Great companies are bought, not sold" is true, but most companies are sold
- •Media-reported deal numbers can be wrong, and deal values shift with cash, bonuses and stock
Why and When Should You Sell?
Shaan says the first question is whether you even want to sell, and suggests checking in on the beliefs you had when you started. He describes three moments to sell: a great offer, loss of belief in the business, or no longer wanting to run it.
- •Start-of-company beliefs: it will work, it will be big, I can do it, I want to do it more than anything
- •His first exit came because he expected only a medium-sized outcome and four more years was too costly
- •With Milk Road his attention was drifting to new ideas and the podcast
- •Without belief you won't take massive action, which reinforces the doubt
- •Three moments to sell: a great offer, lost belief, or not wanting to run it
Who to Tell: Managing Psychology and Your Communication Table
Shaan says managing your own psychology is the most important part of a sale, and discusses who to tell and when. He leans toward telling only co-founders until the deal is done, and recommends planning a communication timeline.
- •Managing your own psychology is the number one most important thing
- •Transparency with the team has drawbacks, as people start to wonder about their jobs
- •He now thinks he erred toward too much transparency and would tell only co-founders until close
- •Create a communication table with timelines for co-founders, investors and employees
Who Might Buy You and Who You'll Deal With
Shaan lays out four buckets of potential buyers and the roles you need to identify on the buying side. He also describes the role of a 'deal doula' on your own side.
- •Four buyer types: unicorns, dying dinosaurs, adjacent alligators and talent farms
- •You need to identify the exec champion pushing the deal on the other side
- •The company router, often corp dev, gets you to the people whose buy-in you need
- •Deal doulas are one or two trusted people with M&A experience who help with wording and confidentiality
Demonstrate Value: Why Companies Buy Companies
Introducing the DENIS system, Shaan covers the first step, demonstrating value. He separates financial reasons from strategic ones and lists six strategic motives.
- •Financial reasons are EBITDA and revenue, which many companies lack
- •The CEO finds it interesting, or has a pet project
- •A new or promoted executive needs a big move
- •Catching up to a surging competitor, or synergy where one plus one equals three
- •The buyer fears you, or you have unique talent that's cheaper to acquire than recruit
Engage Physically: Getting the Meeting
Shaan explains how to get in front of potential acquirers, with the goal of an in-person meeting. He covers reaching executives, corp dev, investor intros and advisors, plus two framings: a partnership discussion or a pending offer.
- •Reach out to executives, corp dev, investors or advisors
- •An investor's email to a CEO got him a meeting the next day
- •Framing one: discuss a partnership; framing two: we have an offer and want to talk first
- •Build relationships over time so you aren't a stranger, but cold outreach via corp dev works too
Nurture Dependence: Package Yourself as the Solution
Shaan says you want lust, not love: tap into the buyer's emotions with clarity rather than trickery. He describes getting a beer with a Twitch exec to learn their priorities, then pitching himself as the answer to their problem.
- •Trim your story so you are the answer to the buyer's pain point
- •He learned Twitch's top priorities and which one was weakest before meeting the CEO
- •Questions to ask: what has exec buy-in, what fires need putting out, who is the decision-maker
- •Talk to founders previously acquired by the same company to get intel on timelines and retrading
Do the Work for Them: Make Your Company a Buy Button
Shaan describes preparing materials so the buyer doesn't have to work out the fit themselves. He wrote one-pagers, a talent presentation and a CEO memo, aiming to turn the company into a giant buy button.
- •Write a strategic one-pager from the buyer's perspective
- •Prepare a technical one-pager and a talent presentation like a dating profile
- •He drafted a memo in the buyer's culture, announcing the deal as if it were already done
- •Keep financials in a clean data room to remove friction
Neglect Emotionally and Inspire Hope: Create Competition
Shaan advises running multiple parallel conversations so no single buyer holds all the leverage. He then describes going back to the preferred buyer to say you have other options, using one deal's leverage to improve another.
- •Negotiate with 10 to 20 parties in parallel and try to get multiple offers in the same week
- •Going cold briefly makes buyers sweat, but don't push it
- •He left breadcrumbs on Instagram stories to hint at meetings with other companies
- •Tell your preferred buyer you want them, but that a time-sensitive competing offer exists
Sell Entirely: Closing, Bridges and Celebrating
Shaan covers the closing phase: have diligence and terms ready, hire a good lawyer and accountant, and avoid burning bridges. He says to sprint hardest after the term sheet rather than relax, then celebrate once the relief fades.
- •Prepare due diligence, clean closing terms, a good lawyer and an accountant
- •Don't burn bridges: a buyer he had rejected came back later for the Milk Road sale
- •His deal doula told him the term sheet is when to sprint the hardest
- •Celebrate after the relief subsides
Final Rules of Dealmaking and Wrap-Up
Shaan closes with three pieces of advice he received: deals fall through, momentum is everything, and one choice is no choice. He then asks for feedback and says he may do more masterclasses.
- •Birds fly, fish swim, and deals fall through, so don't get too high or low
- •Speed of follow-up keeps deal momentum going
- •One choice is no choice: a single buyer means zero leverage
- •Asks viewers to comment, like and subscribe if they want more masterclasses
