The Path to Exit and Beyond: Entrepreneurs’ Stories, Part I
Market Insights - Q2 2019
“The sale of a company can mark the beginning of a major time of reinvention and renewal…but It can potentially lead to a difficult time for entrepreneurs, beginning with time to mourn their lost company and identity.”
Barbara Reinhard and Bill Woodson, Credit Suisse Americas
Barbara B. Roberts and Murray B. Low, the Columbia Business School’s Eugene Lang Center for Entrepreneurship
This quote, lifted from a Columbia Business School’s study in partnership with Credit Suisse Americas, Life After an Exit: How Entrepreneurs Transition to the Next Stage, gives rise to a critical question: what are the factors that shape the post-exit experience?
The study reports that most entrepreneurs who struggle after the sale of their business started the process without much reflection, analysis and planning. But what about the entrepreneurs that celebrate their exit as the start of a new adventure? How do they approach the process? Are there common themes that shape their experiences?
To gain deeply personal insight into this question, we interviewed two entrepreneurs who are thriving post-exit. We share the first of those interviews below. The second, with Joe Graci, President & GM of Interworks Technologies, will follow in our next Market Insight.
Interview with Shelley Wishart, Co-Founder and ex-CEO, Orchard International
Exit objectives: Finding a buyer that would value the company’s culture, staff and management, and allow Shelley and her husband Ken to retire and pursue their passion in Costa Rica
Sold to: Albéa, a French strategic buyer
Shelley Wishart and her husband, Ken, founded Orchard International in their kitchen. They spent 25 years building the company into a leading Canadian developer and distributor of cosmetics and personal care items, with clients that included brands such as Sephora and Macy’s.
Reaching a Decision to Sell
FP: Can you describe how you started thinking about selling Orchard?
SW: After more than twenty years in the business, Ken wanted to retire, but I wasn’t ready. Then we purchased a property in Costa Rica, I started a side business leading yoga retreats, and I began to rethink my decision. The idea of spending more time in Costa Rica and building up the yoga business had more and more of a gravitational pull, and after a year of thinking about it, we decided to sell.
FP: Once you decided to sell, what were the hurdles?
SW: I actually didn’t think it would be possible to sell. The business was so close to me personally that I couldn’t imagine anyone else buying it. I was also very worried about my staff being let go. Those obstacles seemed insurmountable, and it took me another year to get mentally prepared.
FP: How did you do that – get mentally prepared?
SW: To make the leap, I had to feel like there was something worthwhile that I was moving towards. I also gave significant thought to what kind of buyer I wanted: one that would respect our legacy, value the talent of Orchard’s staff, and fit with our company culture, while allowing Ken and I to retire without strings attached. It felt like we would be looking for a needle in a haystack, but that’s what I needed to be prepared to sell. I also started to pull back from the business, and delegate. I worked from home a couple of days a week and promoted our VP Sales to President.
Through the Sale Process to the Close
FP: After launching the sale process, what were your biggest concerns?
SW: Everyone tells you to keep the process top secret, but I didn’t want to sneak around behind the management team’s back. So I told them, which actually made the process so much easier when it came to gathering information during the buyer’s due diligence. It was very important for me to make them feel part of the process.
FP: And when the transaction closed, how did that feel?
SW: I felt free! I also felt proud of the way we conducted the process. Our investment banking team (FirePower Capital) understood our priorities and delivered, but we really had to define our objectives and stay true to them—that’s not on them to do. And we did, I’m proud of that.
A number of buyers they brought to the table could have worked, but one (Albéa) truly stood out in terms of where they were positioned in the market and their similarity in culture. They also placed considerable value on Orchard’s management team, staff and clients. That made it easier to walk away from Orchard.
Life after the Exit…
FP: How’s life after the exit?
SW: I teach at my yoga studio, and we’re currently expanding to include meditation. I travel often for different retreats and workshops, and of course, with my family. Honestly, I’ve never been so busy! I’m very proud of what we built at Orchard, but at this point, it seems so far away. I loved my time there but I’m glad I’ve moved on.
FP: Any words of advice for business owners considering an exit?
SW: Be very clear about what your life will look like afterwards, and what you want from a buyer. Then take it one day, one meeting, one conversation at a time. In hindsight, I think it’s good to exit when you still really enjoy the place and the people, which I did.
Applied Comfort is a designer and manufacturer of non-standard HVAC systems for commercial, industrial and institutional facilities. FirePower guided the company in its search for a strategic partner, concluding a transaction with a UK-based strategic, with a complementary product portfolio and distribution capabilities.