Kevin Manley on Exit This Way™ / by Kerri
Listen to Kevin Manley on Exit This Way™
Kevin Manley, founder of The Exit Advisors and Manley Strategic, is a noted business & exit strategist and entrepreneur. Kevin holds an MBA, a Masters in Engineering, and a CExP. He has founded, advised, and/or invested in a variety of companies in consumer electronics, medical technology, philanthropic technology, real estate development, etc. In 1995 Kevin co-founded Yesmail.com, an online e-marketing solutions company. He and his co-founders took Yesmail public in 1999, and sold it to CMGI in 2000 for over $700M. This 5-year process involved name changes, strategic focus changes, smart advisors, luck, great timing, and great people.
Kevin helps owners of both startups and established businesses maximize their company’s value and formulate a plan to grow their business, leverage their talent, improve their focus, utilize technology, enhance overall stability, and develop and implement an exit/transition strategy.
Entrepreneur to Exit Planner, It’s All About Value
Kevin was an entrepreneur in the heyday of technology so I asked him what he learned from that experience that helps him serve clients today.
Kevin briefly told the story of his parents owning their own business and his desire to own his own business. He recognized the internet would be big and decided to become the expert.
It’s a Game
In building his company, he understood and explains to owners that it’s a game, especially when you are navigating to the end. He was very specific that you must identify what others will value in your business and maximize that. You must focus on what will be most valuable to someone else. So, at Yesmail, they had a ‘laser focus’ on what made them most valuable.
As they were trying to raise capital, they realized they did not know what game they were playing. But they got good advisors and their CPA led them to real investors.
Have an Exit Plan
They had to put their plan and their business model on paper in order to get that. That became their exit plan. He says you have to have the exit plan to have the opportunity. If they had not had that exit plan to keep them focused, they would have failed. His advice now is to have an exit plan and work backwards from there to answer the question: How do we get to that?
They hired a CEO who helped turn a me-too company into a valuable company with a unique offering which drew investor interest and led to a buyer. In his blog, Kevin tells the story in more detail of how they had an IPO followed immediately by the sale to CMGI.
After the Exit
Kevin also talked about the story after the exit; in terms of the decisions and options to take an earnout, to go with the business to the new owners, accepting lockup clauses and for how long.
In retrospect, Kevin said he had enjoyed owning the business and that he had provided a living for his employees. His employees all benefited from their stock options when the company sold, so that participatory exit for everyone on the team was hugely rewarding to him. Rather than keeping their exit plan quiet, their team knew the plan. Indeed, their exit plan added comfort for all employees, not just the owners.
Kevin admitted there was a bit of luck and timing to the sale of his business, selling one week before the NASDAQ peak. He also explained the impact of that on him personally, as the reality of a stock purchase lock up prevented him from liquidating any of his stock for one year. He and all the founders then sold stock and did just fine, but they had to watch the stock drop from 160 to 40 before they could sell.
It’s an insightful and compelling story to hear. Listen to Kevin’s full interview here.