M&A Lessons From A 3x Entrepreneur | A.J. Lawrence

04/26/23 • 53 min

E32: Join Todd Sullivan as he interviews A.J. Lawrence, a self-proclaimed journeyman entrepreneur with multiple exits under his belt. A.J. sold his first web development business to an ad agency a few years out of college. He then moved into I.T. hardware and sold his Wi-Fi router business to his main hardware supplier. AJ capped it off in 2021 by building and selling a multi-million dollar digital ad agency which made the Inc. 500 twice.
Today, A.J. is a student of the entrepreneurial mindset. Given his success, he is intent on better understanding what makes founders succeed and fail. To this end, A.J. acquired the Beyond Eight Figures podcast to explore and share what makes entrepreneurs tick and how we can all improve our skill sets through the experiences of our fellow founders. In today's discussion, A.J. and I discuss how his companies were valued by strategic acquirers, his understanding of why terms are more important than price in an M&A transaction, and the value of family support when building and selling a business.

Episode Highlights:

(3:32) AJ's beginning as a serial entrepreneur
(8:26) The details behind AJ's first exit, and the strategic partnership that created it
(13:49) "Your Price, Our Terms"
(16:45) The Creation of business #2
(18:52) From near failure to a seven-figure exit
(25:29) The importance of defining your "why" in the early days of your startup
(29:17) The creation of the JAR Group, and the emotional toll it took on AJ on his team
(33:32) Losing his revenue whale at JAR, and the realities of the business left behind
(35:04) A burned out CEO, and a fortunate negotiation that led to a significant earnout
(42:11) Buying a podcast with BITCOIN
(47:19) Final M&A perspectives from a 3x entrepreneur
(51:12) The role that friends and family play in an entrepreneur's success

Where To Find Todd Sullivan (Host):

LinkedIn: https://www.linkedin.com/in/toddfsullivan/
Twitter: https://twitter.com/Todd_Sullivan

Where To Find A.J. Lawrence (Guest):

LinkedIn: https://www.linkedin.com/in/ajlawrence3/
Twitter: https://twitter.com/ajlawrence

Episode 32 Required Reading:

What Is Seller Discretionary Earnings ("SDE")?
Beyond 8 Figures podcast | A.J. Lawrence
Built To Sell | John Warrillow
Buy Then Build | Walker Deibel
4 Ways to Calculate the Value of Your Business
Startup Savant Podcast
TRUIC: Guides To Start And Grow Your Small Business

Thanks so much for joining us this week. Want to subscribe to the CASHING OUT PODCAST? Have some feedback you’d like to share? Connect with us on iTunes and leave us a review!

Episode Highlights:

(3:32) AJ's beginning as a serial entrepreneur
(8:26) The details behind AJ's first exit, and the strategic partnership that created it
(13:49) "Your Price, Our Terms"
(16:45) The Creation of business #2
(18:52) From near failure to a seven-figure exit
(25:29) The importance of defining your "why" in the early days of your startup
(29:17) The creation of the JAR Group, and the emotional toll it took on AJ on his team
(33:32) Losing his revenue whale at JAR, and the realities of the business left behind
(35:04) A burned out CEO, and a fortunate negotiation that led to a significant earnout
(42:11) Buying a podcast with BITCOIN
(47:19) Final M&A perspectives from a 3x entrepreneur
(51:12) The role that friends and family play in an entrepreneur's success

Where To Find Todd Sullivan (Host):

LinkedIn: https://www.linkedin.com/in/toddfsullivan/
Twitter: https://twitter.com/Todd_Sullivan

Where To Find A.J. Lawrence (Guest):

LinkedIn: https://www.linkedin.com/in/ajlawrence3/
Twitter: https://twitter.com/ajlawrence

Episode 32 Required Reading:

What Is Seller Discretionary Earnings ("SDE")?
Beyond 8 Figures podcast | A.J. Lawrence
Built To Sell | John Warrillow
Buy Then Build | Walker Deibel
4 Ways to Calculate the Value of Your Business
Startup Savant Podcast
TRUIC: Guides To Start And Grow Your Small Business

Thanks so much for joining us this week. Want to subscribe to the CASHING OUT PODCAST? Have some feedback you’d like to share? Connect with us on iTunes and leave us a review!

Previous Episode

Opportunistic M&A, and Building A Business With Family | James "Bud" Petcoff

E31: On today’s episode of the Cashing Out podcast, co-hosts Todd Sullivan and Brian Dukes speak to James “Bud” Petcoff, a prolific entrepreneur and CEO.

Bud has more than 35 years of insurance industry experience, including founding North Pointe Insurance Co. in 1986, taking it public in 2005, and facilitating its sale to QBE Holdings Inc. in 2008.

Today, Bud is the chairman and CEO of Conifer Holdings Inc, and is responsible for establishing the overall direction and materializing the strategy of the company. We talk about leaning on experts when taking on new challenges, his learnings from a lifetime of entrepreneurship, and what it’s like building his newest enterprise with his two sons.

I hope you enjoy our conversation with Bud Petcoff.

Episode Highlights:
(3:58) College life, and starting his first insurance company
(7:46) Bud's first exit - selling North Pointe Insurance for the first time
(9:00) In hindsight, should Bud have used an Investment Banker?
(12:11) Problems at the acquiring company, and buying North Pointe back
(14:43) Getting North Pointe back on track for another run at success
(16:53) Taking North Pointe public, and why?
(19:14) The second exit of North Point Insurance Co.
(22:33) The big difference in selling a public vs private company
(25:04) After selling North Pointe Insurance a second time, what comes next?
(28:32) Final advice for entrepreneurs considering an exit
(30:21) Building the next enterprise with family
(38:25) The role that Bud's parents played in creating an incredible human and entrepreneur

Where To Find Todd Sullivan:

LinkedIn: https://www.linkedin.com/in/toddfsullivan/
Twitter: https://twitter.com/Todd_Sullivan

Where To Find Brian Dukes:

LinkedIn: https://www.linkedin.com/in/brdukes/
Twitter: https://twitter.com/bdukes32

Episode 31 Required Reading:

Next Episode

From Stay-At-Home Mom to Home Health Care Billionaire | April Anthony

E33: On today's episode of the Cashing Out podcast we are very fortunate to be chatting with April Anthony, currently the founder of the VitalCaring Group, which is her fourth home health care company. April is a home health care and technology entrepreneur with three exits under her belt. She started her career as an accountant, but at the age of 25, with the initial goal of being a stay-at-home mom, April talked herself and her husband into buying one of her clients, which was a failing home health care company. The next 25 years is a remarkable story of perseverance and success where April built and sold three home health care businesses for more than $1.5 billion.

April's superpower comes from her early days as an accountant and her unwavering perseverance to follow her purpose, which allowed her to flip the home health care industry on its head. In our discussion, April shares how finding your purpose will drive your business success, why you should do due diligence on your buyer, and when to sell pieces of your business while rolling equity to take a second, third and fourth bite of the apple.

Episode Sponsor:
Thanks to DoerenMayhew for sponsoring this episode of the Cashing Out podcast! DoerenMayhew is one of Forbes best tax and accounting firms in the United States. Check out their Quality of Earnings (QofE) offerings, and everything else they can help you with at doeren.com.

Episode Highlights:

(3:32) April's beginnings as a CPA at PricewaterhouseCoopers, and buying her first home healthcare business from a client
(8:24) From initial losses to profitability - building her first big home health care company
(14:24) Selling her first business to a flawed owner, and what that meant to her earnout
(21:51) Due diligence works in both directions - what April missed the first time around
(28:39) Starting her second business, and building through acquisition (first) and organically (second)
(36:58) What it meant to find the perfect Private Equity partner
(39:03) April's perspective on when to sell your business - lake house or generational wealth
(43:08) Self-awareness and entrepreneurship - the importance of being able to objectively look at your skill sets
(45:27) Two, three, and four separate bites of the apple that created significant wealth for April and her family
(51:04) April's "why", and a healthy balance of profit generation and mission
(56:35) Failing at retirement, and creating her next home health care company, the VitalCaring Group
(58:56) The importance of having a supportive family and amazing marriage partner

Where To Find Todd Sullivan (Host):

LinkedIn: https://www.linkedin.com/in/toddfsullivan/
Twitter: https://twitter.com/Todd_Sullivan

Where To Find April Anthony (Guest):

LinkedIn: https://www.linkedin.com/in/april-anthony-95bab1213/

Episode 33 Required Reading:

April Anthony: Forbes 2022 America's Richest Self-Made Women (#28)
April Anthony: Forbes BILLIONAIRESDAILY COVER
Doeren Mayhew

Thanks so much for joining us this week. Want to subscribe to the CASHING OUT PODCAST? Have some feedback you’d like to share? Connect with us on iTunes and leave us a review!