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Episode Summary
You’re three partners deep, the business is growing 25% a year, every dollar of profit goes right back into the machine, and your spouse is asking when the freedom shows up. Kenyon has been on every side of that scene. He built comworks from a Crystal, Minnesota sublease into a national tech installation business serving Best Buy and US Bank, bought out a founding partner with a clean buy-sell, swung and missed twice with investment bankers, took 200 inbound buyers down to a private equity deal with Morgan Taylor in Cleveland, rolled 20% equity, and was gone six months after close. We got into why growing businesses are the poorest they’ll ever be, why hiring industry veterans for their “rolodex” is the most common misfire of the early years, why his Rule of Fives finally cracked their growth, and the two pieces of advice every owner needs before signing the LOI: be happy with what you get on the first pass, and find out what problem you’re actually solving for the buyer before any money changes hands.
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## Top 10 Takeaways- Set your partnership equity below 100% on day one because roles change and capital needs to be allocated as you grow.
- A growing business is the hungriest cash animal you’ll ever feed. You’ll be poorer than you’ve ever been.
- Industry veterans bring their rolodex and their baggage. The rolodex rarely follows them. The baggage always does.
- Hire for work ethic and culture fit. You can teach almost any skill. You can’t teach character.
- Until you’re willing to say no to something, you don’t actually have a strategy.
- Run a buy-sell agreement while you’re still friends. Build the formula now so the math is automatic later.
- The first two investment bankers will probably be wrong. Triangulate referrals from owners who’ve actually exited.
- Be happy with what you get on the first pass. After that, control is no longer yours.
- Strategic buyers buy for their own reasons. Find the problem you’re solving for them before any cash changes hands.
- Six months after the sale is the average tenure of the seller-CEO. Plan your identity for what comes next.
Sound Bites
“The honest truth is, Ryan, we were never poorer than when the business was growing. But on the outside everybody sees this fast-growing business, and we’re hiring people along the way, and they think ‘geez, these guys got to be rolling in it.’ It’s just not the case.” (@10:25) — Kenyon Blunt
“Be happy with what you get on the first pass, because after the first pass it’s not yours to control anymore. You might have a hand in it, but it’s not the same level of control.” (@36:42) — Kenyon Blunt
“You need to understand as the seller what problem are you going to solve for them. If you can’t figure that out, don’t do the deal, because it’ll go badly. I would promise you, it’ll go badly if you can’t figure that out.” (@48:50) — Kenyon Blunt
“We got our five principles, and the first one is your drivers, which is knowing what you want. And it literally is not about the check. I’ve got hundreds of interviews to prove that.” (@38:18) — Ryan Tansom
About This Episode
Kenyon Blunt is the founder of Dynasty Leadership Consulting, where he coaches CEOs and runs strategic planning sessions for growth-focused companies. Before Dynasty, he co-founded comworks in 1995 with two partners. It became a national tech installation business serving clients like Best Buy and US Bank. The three partners bought out one founding partner in a clean buy-sell, then exited via a private equity recap to Morgan Taylor out of Cleveland. Dynasty is the sixth bootstrapped company in his career. This is an early Ryan episode (2018) walking the full arc of building, partnering, and selling.
Resources Mentioned
- Dynasty Leadership Consulting — Kenyon’s current firm, coaching CEOs and running strategic planning. — dynastylc.com
- Dynasty Leadership Podcast — Kenyon’s show.
- Green Hulman Fisher — The Twin Cities investment bank that ran the comworks sale process (Eric Nicholson as lead).
- Morgan Taylor — Cleveland-based private equity firm that acquired comworks.
- Jack Stack / The Great Game of Business — Referenced for the observation that most Inc. 5000 companies can’t afford two payrolls in cash.
Connections
Phase + Module:
- Module 1 — Ownership Goals — The “freedom over a golden parachute” framing Kenyon and his wife set from day one
- Module 5 — Predictable Revenue — The Rule of Fives as an ideal-customer filter that drove their accelerated growth
- Module 7 — Leadership Team — Delegating sales and adding managers as the unlock for the next stage
Milestones:
- Milestone 1 — Time & Role Goals — What freedom and role looked like for Kenyon and his partner before the sale, and what nobody planned for after
- Milestone 13 — Strategic Plan — The Rule of Fives as a saying-no framework that turned chasing into focus
- Milestone 21 — Leadership Development — Hiring for work ethic over rolodex, and the delegating curve that took too long
Concepts referenced:
- The Owner-Operator Trap™ — Why six months after the sale is the average tenure of the seller-CEO
- Three Lenses of Value — The gap between what owners think their business is worth and what the market actually pays
- Normalized EBITDA — The basis of the 3-2-1 weighted multiplier in Kenyon’s partner buy-sell
- Enterprise Value vs. Equity Value — Rolled equity, second bite of the apple, and what “control” actually means post-close