Due Diligence from an RV
How I Arrived At the Decision to Sell + Embracing Work-Life Integration
Last week, I mentioned that I often assumed we’d get acquired sooner than was realistic. Still, once it happened, it was more sudden than I ever anticipated.
We paused running a structured process for finding a growth investment partner or strategic acquirer mid-COVID. In the midst of that, I started to pursue in earnest finding a similar-sized company that we would seek to acquire and effectively “package up” as part of a broader PE investment deal.
I compiled a database of 700+ proptech companies. I evaluated various factors:
How complementary their services were to ours.
How much overlap in customer base we had.
How much money they had raised.
How much annual revenue I estimated they were generating (by looking at their number of employees as a proxy).
After all of that analysis, the company that stood out as a top fit was W+R Studios. I had assumed they would be a great fit, as I had already been building a relationship with Greg and Dan, hoping we might join forces one day. I reached back out, and there was mutual interest in exploring the concept of going to market together. But those talks quickly subsided. A would-be acquirer had approached them, and they needed to curtail discussions.
Less than two months later, in December 2020, Lone Wolf’s acquisition of W+R Studios closed. With my favorite off the table, I continued the search for other potential companies to acquire and identified several good options. But, the number of “great” opportunities for us was shorter than I would have hoped.
With that backdrop, Lone Wolf reached out to us in late January 2021. It wasn’t something I had expected or pushed for. (Special thanks to Greg, Graeme, and Chris at Lone Wolf for their separate parts in contributing to us being on the radar for that initial outreach.) They weren’t at the table in our prior process, so it was a fresh start. I assumed they weren’t serious about us, and I wasn’t sure I was interested either. However, in late February, I was prepped to do a demo for two people for Lone Wolf’s C suite. I was pleasantly surprised when about a dozen people showed up. They were serious.
From there, things flew by. We signed a letter of intent on March 25, 2021, and closed a short 46 days later.
How did I transition so quickly from wanting to raise a growth round to deciding instead to get acquired? The trite answer might be that it was about the money, and they made a good offer.
While true, there were many other reasons. The process of intentionally looking at who else we would buy and seeing the path toward future growth had me believing that that would be a long road. Also, I have been predicting a recession since 2016. While I had been consistently wrong for ~5 years, I knew a recession was inevitable. And 2020 was a rollercoaster of a year. We navigated it well, but I could sense our team was tired. I wasn’t sure we were collectively excited enough to continue to pursue the independent path for another 5+ years.
In addition, the fact that Dan and Greg chose to sell to them was a significant endorsement. Moreover, I liked my interactions with the Lone Wolf leadership team and the vision of where they were heading. I saw the opportunity to build out the end-to-end platform we had always envisioned as an eventuality at HomeSpotter.
Most of all, my kids were getting older, and I wanted to make sure I would be available in a more meaningful way. I had some friends drive home this idea that you only have “x more vacations” with your kids before they leave the house, and that time is fleeting. I wanted to be more present.
That particular reason made for a more interesting journey immediately after signing the letter of intent to sell. My family and I had been itching for a vacation mid-COVID. After having various plans thwarted, we had long scheduled a two-week RV trip to start on March 27 - two days after I signed that LOI. It was set to be a trek through some fantastic national parks in Utah, Arizona, and New Mexico. Though we would consider ourselves “indoorsy,” we were excited about this adventure.
The thought of canceling the trip crossed my mind briefly, but I didn’t seriously entertain it. I didn’t want to let my family down.
But I also didn’t want to jeopardize the deal or convey that I was any less committed to a timely close. So, I never mentioned I was in an RV to my new colleagues at Lone Wolf. I took many due diligence meetings hunched over a laptop on the side of the road or in some other temporarily contrived office setup. I booked two separate hotel rooms along the way - not for us to stay in but for me to have a reliable place to take Zoom calls from. I also rented a car for a day for the same reason.
One of the hardest-fought lessons I’ve learned over the last few years is that work-life integration is far better for me to aspire to than work-life balance.
When you’re aiming for work-life balance, work is seen as a negative chore that steals from the rest of your life and priorities. You treat work as a 9 to 5, and then it is out of sight, out of mind. It doesn’t acknowledge the reality that sometimes you must sprint for a season to achieve a goal or that sometimes entrepreneurs dream up their best ideas off hours.
On the other hand, when you aspire to work-life integration, you focus on trying to be present in each moment and live it to the fullest. You might work in the evenings after your kids are asleep, but also take some time off work in the middle of the day to pick them up from school. You also acknowledge that life is messy.
I’ve found having guidelines for myself that I adhere to most of the time makes it easier if I need to break them, provided I’m communicative. For example, I try to keep my phone off when we are together as a family - especially over dinner. But once in a long while, I get home and have an urgent issue to deal with for work. I acknowledge it with the family and work through dinner. The keys are being intentional and communicating well.
Or, when we take a vacation, I often get up an hour or two before everyone else, knock out what I need for work, and then do my best to stay off my phone the rest of the day with the family.
This approach may not be for everyone, but I wouldn’t have it any other way.
And as you can see below, we managed to have the vacation of a lifetime and enjoyed every minute of it … and the deal closed on time too!
Having just hit the eighteen-month anniversary of the sale, I have no regrets and many positive things to say about the decision to join Lone Wolf. I am also glad I didn’t forego the opportunity to take this epic trip.
Special thanks to many HomeSpotter colleagues and advisors for supporting my time away and our collective due diligence efforts.
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