While Lauren Friese says there are no hard and fast rules for selling a business, she noticed the signs indicating the time was right to sell TalentEgg, the company she founded in 2008.
Among the leading indicators were two factors: Friese recognized that her personal contribution to TalentEgg’s success was becoming less important, and there was a higher “opportunity cost” in continuing to own the business, which helps students and new graduates find jobs.
In July 2015, Friese decided to sell Toronto-based TalentEgg to CharityVillage, a job board for Canada’s non-profit sector.
“At the beginning of TalentEgg, my contribution was important to business because it fuelled a significant amount of growth and success,” she said in an interview.
“Over time, it mattered less. While it’s great for the company, it is less fulfilling as an entrepreneur. The upside is it facilities the company being sellable versus the company depending on you for its growth and day to day sustainability.”
At the same time, Friese said she also started to weigh what it meant to her personally and professionally to continue running TalentEgg as a growing and profitable “lifestyle” business against doing something new and different.
She said:“For me, at some point I thought the business doesn’t rely on me anymore. In fact, I might be getting in the way of its growth. What could I be doing instead of this right now? Even though I still don’t know what I will be doing, the equation (sell versus stay) made sense.”
The sale of TalentEgg, which has 20 employees, started a year ago when the company was approached about a potential acquisition. Friese says it was a serious enough offer that she hired a broker to make sure the process was handled properly.
One of the biggest lessons, she said, was ensuring the company was prepared, which included establishing a data room so potential acquirers could get the information they needed to consider a purchase.
“With no investors and bosses historically, and not being the most organized person in the world, it was a huge undertaking for me,” Friese said.
“It was distracting and difficult. I didn’t find any resources so I could understand how difficult or time-consuming the process can be. Start to finish; it was nine months. It was not an overnight thing. We frequently hear the stories from startups about how Google suddenly came along with a huge offer. Those are the exception, not the rule.”
In exploring the sale of the business, Friese said one of the luxuries was there was no need to do a deal. Instead, TalentEgg’s broker was given a mandate that the business was open to a sale, as well as other alternatives.
While money was a key part of the selling equation, Friese said it was also important to find a company that would provide good opportunities for her team and continue to support TalentEgg’s mission to help students handle the challenges of finding a job.
“The idea of selling TalentEgg meant it had to be sold to someone who would carry it on [the mission]. I will always be the founder of TalentEgg so it was important for so many different reasons and angles for it to be in the hands of a parent organization that has the same vision.”
Having experienced the sales process, Friese said she was particularly struck by the attention and kudos that an entrepreneur receives for selling their business.
“I hope that is not the reason someone sells their business. There is nothing wrong with running a lifestyle business. When people ask you about exit options, one of them is keep on running your great business.”
Photo of TalentEgg’s Lauren Friese via TalentEgg
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