When I was 19 I started Heyo.com from my dorm room at Virginia Tech. This is the story of how we grew it to many thousands of paying monthly customers, raised $2.5m in venture capital, and sold it yesterday to our #1 competitor.
The First Acquisition Email and My Suspicions
In Episode #171, Nathan breaks some big news regarding his business Heyo — he got an offer to sell it. Listen as Nathan discusses with his team the process and ramifications of potentially selling their business.
EP 171: We got an offer to sell Heyo from The Top Entrepreneurs in Money, Marketing, Business and…_Listen to The Top Entrepreneurs in Money, Marketing, Business and Life episodes free, on demand. Listen to The Top if…_www.stitcher.com
3 Key Points:
- Transparency has the advantage of keeping everyone on Heyo’s team informed and learning. The downside is that they may feel anxious about what the future holds.
- A big part of selling a business is considering its future profitability and potential.
- When selling a business, it’s important to be sensitive to the feelings of the people who are invested in it. (Employees, investors, customers, etc.)
Time Stamped Show Notes:
- 00:00 — Nathan talks about when he first started his business with his mom.
RELATED: MY MOM SHARES 3 THINGS SHE TAUGHT ME WHEN I WAS YOUNG THAT MADE ME THINK LIKE AN ENTREPRENEUR
- 02:02 — Early on building Heyo, Nathan resolved to be transparent about how offers were negotiated so that everyone on the team could learn from it.
- 04:28 — Nathan’s team got an offer to sell their five year old business Heyo by their competitor.
- 05:56 — In line with the founding philosophy, Nathan’s decided to be fully transparent about the process to his Heyo team.
- 07:22 — Chris Rieger, the head of operations at Heyo expresses his thoughts.
- 08:04 — Heyo has sentimental value to the team and still possesses long-term value in its future opportunities.
- 09:20 — Nathan’s concern with transparency is losing talented employees due to the potential acquisition.
- 10:10 — Nathan is also concerned that the business might become too comfortable and miss out on bigger opportunities.
- 10:30 — A big part of deciding whether to sell Heyo is its future potential.
- 11:18 — Nathan doesn’t like the offer — he plans to reach out to other potential buyers get LOI’s (letters of intent) to leverage Heyo’s value.
- 13:37 — Christina, Heyo’s head of branch strategy joins the show.
- 16:01 — Nathan thinks that Heyo’s brand wouldn’t be shut down if acquired by their competitor, only reused.
- 18:01 — Nathan and Christina have faith in their team to find a new project if Heyo were acquired.
- 19:01 — Christina thinks that as long as they properly manage the communication to their customer base, the transition will be smooth for users.
- 21:48 — There are numerous people tied to the business — Nathan sees his business partners as life-long, not business long.
- 22:19 — The investors in Heyo is an important factor to consider in the acquisition decision.
- 22:44 — What do you guys think — should Nathan sell Heyo?
How We Created a Bidding War Among 4 Companies to Drive Up Deal Price
In Episode #177, Nathan talks more about selling his business Heyo and brings on Jim Risner of Votigo to talk about what makes Heyo desirable. Listen as Nathan comes to a decision regarding a dream he’s had since he was 18— selling a business before the age of 30.
EP 177: My decision. Should I sell Heyo or not? from The Top Entrepreneurs in Money, Marketing…_Listen to The Top Entrepreneurs in Money, Marketing, Business and Life episodes free, on demand. Listen to The Top if…_www.stitcher.com
3 Key Points:
- Offers to buy a business may be a ploy to gain information by competitors. Often it’s prudent to hold off on any announcements before seeing a contract.
- LOI’s aren’t created equally. Some of them are offers of pure cash while others include other things like stock in a publicly traded company.
- Even after a signed LOI, many deals fall through. Due diligence is required for the actual exchange of money for a company.
Time Stamped Show Notes:
- 01:00 — If you haven’t caught up already, one of Nathan’s biggest competitors has offered to buy Heyo.
- 01:26 — One concern is that the offer may not be serious, only a ploy for information.
- 01:51 — Ken Armijo calls in to offer advice: before taking the buyers seriously, wait until they produce a contract.
- 03:02 — Nathan plans to obtain LOI’s (Letter of Intent) from companies that might be interested in buying Heyo and leveraging competition to raise its price.
- 03:17 — Another Top Tribe listener weighs in on what Nathan should do with the company.
- 04:36 — Nathan called CEO’s to talk about Heyo’s desirability so he could better understand its selling points.
- 05:06 — Nathan talks with Jim Risner of Votigo, one of Heyo’s main competitors in the SMB space (Small Business Space) about obtaining a LOI (Letter of Intent).
- 05:51 — With one LOI in hand from Jim, Nathan began emailing other CEO’s to gauge other interest in Heyo. He obtained four LOI’s from interested companies.
- 06:30 — The LOI’s weren’t created equally — some of them are pure cash and others include stock in a publicly traded company.
- 07:27 — Jim Risner talks about Votigo and why they would want to acquire Heyo.
- 09:10 — Votigo’s been thinking about entering Heyo’s space for a while, expanding into the SMB market. Buying the company would be a big head start into the space.
- 10:21 — Bethany London calls in to express her thoughts that selling Heyo, a long-time dream of Nathan’s, might not be all that it’s cracked up to be.
- 11:34 — One of Nathan’s friends from Virginia Tech’s Pamplin School of Business offers his thoughts that Nathan may have outgrown Heyo.
- 13:58 — Nathan signed the LOI — he’s selling Heyo.
- 14:22 — Many deals fall through even after a signed LOI.
- 15:21 — Tune in next Monday to find out what happens. And also, call in to express your thoughts @ nathanlatka.com/talk
Due Diligence Hell and The Big Signature:
In Episode #184, Nathan continues to tell-all about the selling of Heyo. In this part, he focuses on ‘due diligence’ and the business post-acquisition.
Sold Heyo, Here's What's Next from The Top Entrepreneurs in Money, Marketing, Business and Life_Listen to The Top Entrepreneurs in Money, Marketing, Business and Life episodes free, on demand. Listen to The Top if…_www.stitcher.com
3 Key Points:
- While waiting on due diligence, Nathan kept leverage and created a safety net by keeping Letters of Intent from other companies in case the signed deal with Votigo fell through.
- Entrepreneurs often have strong intuition or ‘gut feeling.’ Sometimes it’s wise to trust your instincts or to find out why you’re feeling a certain way.
- Nathan’s signed the deal to sell Heyo! What’s next for him? Find out on his webinar launching on Feb. 4th.
Time Stamped Show Notes:
- 00:00 — Nathan’s talks with Jim Risner, a co-CEO of Votigo.
- 01:30 — Nathan signed the LOI offered by Votigo.
- 01:53 — Jim talks about Votigo, a social marketing promotions platform.
- 03:22 — Nathan kept leverage and created a safety net by keeping Letters of Intent from other companies in case the signed deal with Votigo fell through during ‘due diligence.’
RELATED: THE WORLDS TOP CEO’S READ THESE 18 BOOKS TO STUDY LEVERAGE, DEALS, AND NEGOTIATION
- 04:37 — Sue Zimmerman joins the show, one of Nathan’s first customers at Heyo.
- 06:41 — Nathan does The Top Podcast because he loves being out in front of people, not for the money.
- 07:38 — Joe Snider weighs in on what he thinks Nathan should do with his podcast now that Heyo is being sold.
- 08:56 — Autumn Beam of the Write Your Own Story podcast calls in.
- 10:05 — Nathan talks to Jim Risner about Heyo’s future post-acquisition — there are none to few changes planned.
- 11:09 — Nathan and Jim discuss red flags when it comes to business acquisition and due diligence.
- 12:40 — DJ Stephan, a highly accomplished entrepreneur and podcast listener calls in to advise Nathan.
- 15:03 — Nathan docu-signs the acquisition deal and sells Heyo.
- 18:29 — Get your mind in something, build it, hustle hard, ignore haters, and ride momentum to winning.
- 19:07 —Talk to Nathan Live: Click here to grab a spot live with Nathan on February 4th where he’ll answer questions about the acquisition and discuss whats next.
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