It sounds planned in hindsight but it was pure luck. None of us had any idea how to do it. The reason luck was in our favor was because it wasn't a 1-man show, our location, aiming our communications not just at customers but always keep in mind our competitors and potential investors will (and should) hear us too.
We started eating our competitors lunch so they did have no choice but to take an interest. First we were an annoyance a few years later we had offers to discuss, then it became once or twice a year. We took every opportunity to engage but only for getting to know them but didn't take it further.
We were very visible because there were 3 of us in 3 different countries "making lot of noise" about our product.
Also timing wasn't good yet (why sell today when you know you'll be worth 5x in 2 years).
We went for ~5 years without considering selling and always positioned ourselves to eventually sell from the day we founded the business. If you think about selling when you're just starting, you end up constantly thinking if the company can be easily understood by an auditor and explained to an interested party.
We (3 partners) were already present in 3 countries/sites from the beginning so there was potential of messy "organic growth". And the only way to fix this do this was with a holding company.
- holding company to keep things simple and easy to explain and audit, e.g.:
- No difference in the contracts with our individual CEO's / sites that have to be negotiated individually when the company is acquired/sold
- an investor that takes over the holding has the keys to the kingdom
- all important negotiations done in the holding
The holding also made sense because it allowed us a presence in a 4th jurisdiction that is known to have a high density of investors and none of us would feel the main site is in one of the 3 jurisdictions that the partners were. So it kept things neutral.
Another thing we did right was never touch things we weren't experts in at least not until we had the first hire to move this forward internally, so we hired one of the big 4 to help with controlling & finance.
We had lots of internal bickering, I hated the idea of all this complexity with the holding, and the whole thing almost went tits-up before we even started. But implementing a holding within the first few months was the single most important decision for us. We might have gotten lucky without but not for the same returns.
It sounds planned in hindsight but it was pure luck. None of us had any idea how to do it. The reason luck was in our favor was because it wasn't a 1-man show, our location, aiming our communications not just at customers but always keep in mind our competitors and potential investors will (and should) hear us too.
We started eating our competitors lunch so they did have no choice but to take an interest. First we were an annoyance a few years later we had offers to discuss, then it became once or twice a year. We took every opportunity to engage but only for getting to know them but didn't take it further.
We were very visible because there were 3 of us in 3 different countries "making lot of noise" about our product.
Also timing wasn't good yet (why sell today when you know you'll be worth 5x in 2 years).
We went for ~5 years without considering selling and always positioned ourselves to eventually sell from the day we founded the business. If you think about selling when you're just starting, you end up constantly thinking if the company can be easily understood by an auditor and explained to an interested party.
We (3 partners) were already present in 3 countries/sites from the beginning so there was potential of messy "organic growth". And the only way to fix this do this was with a holding company.
- holding company to keep things simple and easy to explain and audit, e.g.:
- No difference in the contracts with our individual CEO's / sites that have to be negotiated individually when the company is acquired/sold
- an investor that takes over the holding has the keys to the kingdom
- all important negotiations done in the holding
The holding also made sense because it allowed us a presence in a 4th jurisdiction that is known to have a high density of investors and none of us would feel the main site is in one of the 3 jurisdictions that the partners were. So it kept things neutral.
Another thing we did right was never touch things we weren't experts in at least not until we had the first hire to move this forward internally, so we hired one of the big 4 to help with controlling & finance.
We had lots of internal bickering, I hated the idea of all this complexity with the holding, and the whole thing almost went tits-up before we even started. But implementing a holding within the first few months was the single most important decision for us. We might have gotten lucky without but not for the same returns.