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Speaker 1: Earners. What's up.

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Speaker 2: You ever walk into a small business and everything just

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Speaker 2: works like The checkout is fast, the receipts are digital,

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Speaker 2: tipping is a breeze, and you're out the door before

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Speaker 2: the line even builds. Odds are they're using Square. We

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Speaker 2: love supporting businesses that run on Square because it just

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Speaker 2: feels seamless. Whether it's a local coffee shop, a vendor

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Speaker 2: at a pop up market, or even one of our

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Speaker 2: merch partners, Square makes it easy for them to take payments,

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Speaker 2: manage inventory, and run their business with confidence, all from

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Speaker 2: one simple system. If you're a business owner or even

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Speaker 2: just thinking about launching something soon, Square is hands down

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Speaker 2: one of the best tools out there to help you start, run,

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Speaker 2: and grow. It's not just about payments, it's about giving

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Speaker 2: you time back so you can focus on what matters

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Speaker 2: most Ready. To see how Square can transform your business,

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Speaker 2: visit Square dot com backslash go backslash eyl to learn

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Speaker 2: more that Square dot com backslash, go backslash eyl. Don't wait,

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Speaker 2: don't hesitate. Let's Square handle the back end so you

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Speaker 2: can keep pushing your vision forward. This episode is brought

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Speaker 2: to you by P and C Bank, a lot of

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Speaker 2: people think podcasts about work are boring, and sure they

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Speaker 2: definitely can be, but understanding of professionals routine shows us

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Speaker 2: how they achieve their success little by little, day after day.

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Speaker 2: It's like banking with P and C Bank. It might

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Speaker 2: seem boring to safe plan and make calculated decisions with

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Speaker 2: your bank, but keeping your money boring is what helps

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Speaker 2: you live or more happily fulfilled life. P and C

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Speaker 2: Bank Brilliantly Boring since eighteen sixty five. Brilliantly Boring since

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Speaker 2: eighteen sixty five is a service mark of the PNC

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Speaker 2: Financial Service Group, Inc. P and C Bank National Association

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Speaker 2: Member FDIC.

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Speaker 3: Kind of break that down as far as for people

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Speaker 3: that are entrepreneurs of how you have to remain calm

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Speaker 3: under these type of umstances, because some people might have

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Speaker 3: just you know, fell to the pressure and did things

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Speaker 3: that they would have really regretted later on.

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Speaker 1: Yeah. Yeah, to be honest, I thought about that a

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Speaker 1: lot during that deal cycle. That I grew up in sales,

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Speaker 1: so tense negotiations were kind of familiar to me. I

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Speaker 1: grew up in football, where coaches would you know, become emotional,

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Speaker 1: so that behavior wasn't as threatening to me as someone else,

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Speaker 1: And I grew up in the projects on a housing

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Speaker 1: estate where you know, for all of his bluster, he

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Speaker 1: was nowhere near intimidating as people as people I had seen.

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Speaker 1: So those things were super helpful to me. What I

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Speaker 1: learned in that process and have since always used when

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Speaker 1: exiting a company is that competitive leverage, competitive tension. You know,

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Speaker 1: it's key. Otherwise you're sitting opposite somebody trying to tell

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Speaker 1: them that they should just pay more for something because

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Speaker 1: you want more money for something, right, And that's difficult

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Speaker 1: when you both want to buy my thing, and I'm

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Speaker 1: able to say to you that the you've offered is nice,

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Speaker 1: but it's not nice enough for me to do the

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Speaker 1: deal with you because somebody else is willing to pay more.

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Speaker 1: That puts a very helpful distance between me and you

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Speaker 1: and the negotiation. Right. If I'm just saying, you know,

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Speaker 1: prices and one hundred has to be one twenty, that's

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Speaker 1: not as impactful as saying, if you can't get above

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Speaker 1: one twenty, there's somebody else who will do that. There.

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Speaker 3: And it's crazy because we just spoke with a sports

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Speaker 3: league that they are we're in, they're in a contract

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Speaker 3: with a major TV network, right, and they were saying

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Speaker 3: that they the TV network pretty much told them like, look,

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Speaker 3: I know that you don't have anybody else, but it's

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Speaker 3: bidding for this contract, so we really can't negotiate. But

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Speaker 3: I know that at some point you probably will have

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Speaker 3: so at that point in time then where you're going

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Speaker 3: to be in a position to actually have a conversation

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Speaker 3: with us. But until then you have no leverage.

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Speaker 1: Right.

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Speaker 3: So it's important for people to know that, you know,

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Speaker 3: it's always good to have somebody else exactly that is

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Speaker 3: bidding for it, because even if they're not going to

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Speaker 3: buy it, at least it raises.

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Speaker 1: Exactly your interest exactly. In the last process, so with Fortira,

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Speaker 1: where we sold at a billion euros, I did something

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Speaker 1: I never did before, which was we had free parties

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Speaker 1: competing until the moment the deal was signed. Right, So

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Speaker 1: we ran Normally, what you do is you get offers,

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Speaker 1: you say, Okay, I like your offer, I'm going to

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Speaker 1: negotiate with you for thirty days to get it done.

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Speaker 1: You have exclusivity for thirty days to get it done.

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Speaker 1: It's what you normally do. In the last process, which

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Speaker 1: was twenty twenty two, we said, first man to the

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Speaker 1: finish line, you know, get to it. As long as

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Speaker 1: the offers financially were in the right zip code, whoever

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Speaker 1: get it done first. And that was a new experience

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Speaker 1: for me. And what that done in the negotiations was

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Speaker 1: something I hadn't seen in my previous free transactions, which was,

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Speaker 1: you know, somebody said I need this condition in the contract,

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Speaker 1: and it's a completely normal condition. I did it in

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Speaker 1: the previous three deals. It's not something you want to do,

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Speaker 1: But in this situation, I was just like, oh, actually,

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Speaker 1: we don't really want to do that. No, you know,

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Speaker 1: no market conditions, deal norms. A lot of them didn't

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Speaker 1: get done because everybody understood that this was a race

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Speaker 1: to the finish line and was highly competitive. So that

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Speaker 1: like that changes dynamics in the negotiations when you've got

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Speaker 1: that kind of competitive tech.

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Speaker 4: Yeah, I think in terms of deals, a lot of

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Speaker 4: times people might have taken the twelve because they haven't

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Speaker 4: done the proper valuation of their actual business. Well, they

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Speaker 4: might say we may not get another offer, Well we'll

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Speaker 4: do it here and we'll try to work up to this.

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Speaker 4: So like, what's that process for you? Obviously that was

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Speaker 4: you wanted the one twenty five. The next deal is

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Speaker 4: we had a billion dollars, how are we figured out

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Speaker 4: the valuation and how are we negotiating on it?

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Speaker 1: So good thing about tech is there's tons of comps

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Speaker 1: and there's a lot of you know, there's a lot

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Speaker 1: of formulas that guide you to what the price should be. Right.

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Speaker 1: So a company, you know, a company in our space

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Speaker 1: that as over thirty percent margins, over seventy percent of

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Speaker 1: the revenue is recurring, that company's valuation will start at

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Speaker 1: nineteen times. It's ebitda like. That's you know, everybody knows that,

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Speaker 1: and nobody's going to come into the room and try

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Speaker 1: and offer you fifteen because everybody kind of gets that.

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Speaker 1: It starts there. So that's helpful. Then from that nineteen

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Speaker 1: times foundation, yeah, it's on you to sell your kind

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Speaker 1: of strategic advantage that you're offering a buyer, the opportunity

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Speaker 1: you're offering the buyer the eternal investment that buyer is

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Speaker 1: going to realize that bits on you between nineteen and

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Speaker 1: twenty five or thirty times ebe where the deal gets done.

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Speaker 1: But you get in tech, you get good you know,

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Speaker 1: you get good formulas that give you foundation of value.

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Speaker 1: I think that the main threat to underselling in those

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Speaker 1: situations is people sometimes think, well, they must know about right.

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Speaker 1: So in that case, we're a tiny company selling to

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Speaker 1: American Express. I think in that situation it would have

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Speaker 1: been easier for someone to say, these guys must know

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Speaker 1: what the valuation is. They must know better than we do.

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Speaker 1: They buy companies all the time. He's a smart guy.

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Speaker 1: I think that's actually a bigger risk. It was pretty

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Speaker 1: easy for me. I didn't make I wouldn't have made

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Speaker 1: any money at twelve million euros. So discussion clothes.

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Speaker 5: An illegal alien from Guatemala charged with raping a child

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Speaker 1: Sponsored by the United States Department of Homeland Security,