Jeff Cotton

Who should I talk to about exit?

Does everyone in the company need to understand what's going on, how we're thinking about exit?

One of the first things I'll tell you, and you've all heard it, I'm sure, which is that companies are bought, not sold.

And I would sort of spend time with my top leadership team obsessing over that mantra and that, look, we have to build great product that customers love and continue to buy and expand, and the rest of that stuff will take care of itself.

Because that's what I needed the internal team focused on.

But of course, as a founder, as a CEO, and for those of you that have a board, you obviously do have to think about this and manage it.

So what I did is I created a little council that included the two founders of the business that were still there when I joined.

because I wanted them to feel like they still had a voice and ownership in that with my board and a couple of other advisors, where we would quarterly have a strategic planning session to sort of look at the metrics of the business, what we thought valuation really, really was, not just what some math model is telling you, what's going on in the market, who are the potential exits.

So that we were just constantly keeping an eye on that.

Now, in our business, maybe very different than some of what you all are dealing with, but because we went with a primarily channel distribution model, we had a lot of natural exits built into our business.

And in fact, one of the decisions we made was to OEM our software and white label it so that others could sell it as their own.

And clearly in that type of a model, those are going to be potential acquirers for you down the road.

I had made the call that because we were effectively a tool, I didn't believe that this really had a public IPO path.

You've got to get to 100 million with rule of 40 at 100 million for you to really be on a potential IPO path.

And I didn't see that with this company.

And it was so valuable.

I knew that I could get 20X revenue multiples

If we aligned with the right types of partners.

So we chose to use that partner strategy to align ourselves with people that probably would end up buying.

But once again, I'm maniacally focused on execution, acquiring customers, making those partners happy, showing that we were delivering high quality product that they needed.