Ep. 285 — Lowell Ricklefs: The Emotional and Technical Game of Selling Your Business

4 min read

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Episode Summary

You get an email out of the blue. A strategic buyer, or a private equity group, says they’ve been watching your company and wants to talk. The number they float sounds big enough that you start doing the math on what life looks like after the wire hits. Lowell Ricklefs has sat on every side of that conversation. He’s a former CRO and COO who scaled and sold two tech companies to private equity, ran roughly a dozen strategic acquisitions as an operator, co-founded a fintech, and now runs Traction Advising helping B2B SaaS founders sell their companies. We got into why most bankers and CPAs are wired wrong for the sales process. How strategic buyers actually build the model that justifies the price, and why fear of losing the deal to a hated competitor moves them more than the upside. The $1.3 million swing hiding inside a working capital negotiation. And why that out-of-the-blue offer is almost always a buy-side process designed to keep you from running one of your own.

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## Top 10 Takeaways
  1. Selling your company is a sales process. CPAs and bankers are wired for finance, not sales.
  2. Strategic buyers pay more because your $5M company becomes a $25M asset rolled across their customer base.
  3. Once a strategic buyer builds the post-acquisition model, fear of losing the deal outweighs everything else.
  4. Your company has two valuations: the financial floor based on cash flow risk, and the strategic premium on top.
  5. Financial buyers are intrinsically aligned with paying you less. That’s the math of their returns.
  6. Get clear on what you actually want out of: your job, your financial asset, or your identity.
  7. Working capital is where hundreds of thousands of dollars hide. Your attorney won’t fight that fight for you.
  8. “Cash-free, debt-free” sounds neutral. It isn’t. The target working capital number is a real negotiation.
  9. An out-of-the-blue offer is a buy-side process. They ran one to keep you from running one.
  10. Every deal dies a thousand deaths. Your advisor’s job is to keep finding the path forward.

Sound Bites

“Take your very favorite CFO you’ve ever worked with, and you wouldn’t put them in charge of sales.” (@TBD) — Lowell Ricklefs

“The fear of losing a deal far outweighs the fear or the desire to add something.” (@TBD) — Lowell Ricklefs

“Out of what? Your financial asset or your job? You have to separate those two, otherwise I don’t even want to keep talking.” (@TBD) — Ryan Tansom

“Some days I feel like a hostage negotiator.” (@TBD) — Lowell Ricklefs

About This Episode

Lowell Ricklefs is the founder of Traction Advising, a B2B SaaS-focused M&A firm. He started as an electrical engineer at Rockwell Automation, took the technical sales path to global VP, then moved into operating roles. As CRO he scaled one tech company from $1M to $50M before a sale to private equity, then served as COO of another that scaled to $120M and also sold to PE. He co-founded a fintech and across his operator career was involved in roughly a dozen strategic acquisitions. He brings the rare combination of having sat in the operator’s chair, the founder’s chair, and now the advisor’s chair on the same kind of deal.

Resources Mentioned

  • Traction Advising — Lowell’s M&A advisory firm focused on B2B SaaS. — tractionadvising.com
  • Lowell Ricklefs on LinkedIn — Direct contact via LinkedIn search.

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