Ep. 22 — Nina Hale: Do You Want to Be King or Do You Want to Be Rich

5 min read

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Episode Summary

You’ve plowed profits back into the company for eight years. You’re working sixty-hour weeks. The business is profitable, growing twenty percent year over year, and on paper you’re a success story. You still haven’t seen the cash. Nina Hale sat in exactly that chair in 2013 and made a choice most owners never seriously consider. She sold one hundred percent of her digital advertising agency to her employees through an ESOP. Not ten percent first. Not a phased sellout. All of it. I met Nina on an ACG panel here in Minneapolis and knew I had to get her on the show because she walked the rare path: a clean, planned exit on her own terms. We got into the decision underneath it (king or rich), the magic number she’d set in her head before she ever talked to a broker, why a strategic sale would have locked her into seventy-hour weeks for three or four more years, how the promissory note at five percent interest kept her skin in the game, and what she’d do differently around retention stock and SARs for her key leaders. The part that hit hardest was the ego work. Stepping out of the company that still has your name on the door is harder than the math.

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## Top 10 Takeaways
  1. Plow profits back in long enough and one question shows up: am I ever going to see this money?
  2. Your magic number lives in your head before you ever talk to a broker. Know it before you negotiate.
  3. King or rich is the real question. Most owners don’t ask it until they’re already burned out.
  4. If you don’t have an exit strategy, you don’t have a strategy. Every owner needs one, even if you never use it.
  5. A strategic buyer pays more and locks you back into 70-hour weeks for three to four years. That’s the trade.
  6. An ESOP pays financial value, not strategic value. You give up the multiplier to dictate your own exit.
  7. Self-finance with a promissory note and you keep skin in the game, collect interest, and let the company breathe.
  8. Phased ESOPs confuse everyone. Going 100% is cleaner for culture, for taxes, and for your own head.
  9. Use retention stock and stock appreciation rights to lock in key leaders. Most owners wish they’d granted more, not less.
  10. The transition fails when you can’t separate your ego from the business that still has your name on the door.

Sound Bites

“There’s a great quote from Joe Kennedy that said, how did you make all your money? And he said, it was from selling too soon.” (@TBD) — Nina Hale

“If you don’t have an exit strategy, you don’t have strategy. You have to be thinking about what your long-term plan is even if you may never hit it.” (@TBD) — Nina Hale

“When the company starts being a company with a value attached to it, then you start saying, okay, do I want to be king or do I want to be rich?” (@TBD) — Nina Hale

“Even if other people are the owners and working there, they don’t have the same dedication to the company. Even if they’re partial owners, they didn’t build it from being a baby.” (@TBD) — Nina Hale

“You have to get rid of your ego, get your ego out of the way, and focus on the big picture.” (@TBD) — Nina Hale

About This Episode

Nina Hale is the founder of Nina Hale Inc., a Minneapolis-based digital advertising agency she launched in 2005 and built to roughly 70 employees and $10M in annual revenue. She started in radio and computer animation before moving into digital in the late 1990s, and her firm became known for performance-focused search and social media work. In 2013 she sold 100% of the company to her employees through an ESOP, self-financing the transaction with a promissory note at 5% interest over 15 years. Ryan met Nina on an ACG panel in Minneapolis and brought her on for one of the earliest podcast conversations digging into the king-or-rich decision and the ESOP as a real exit path for owners who want to dictate their own transition.

Resources Mentioned

  • Nina Hale Inc. — Nina’s digital advertising agency. — ninahale.com
  • Joe Kennedy quote on selling too soon — Referenced as the framing for Nina’s exit timing
  • ACG Minneapolis panel — Where Ryan first heard Nina tell her ESOP story

Connections

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