Exit Planning with Entrepreneur Mac Lackey

In this episode we are joined by Mac Lackey to discuss exit planning at every stage of the business life cycle. Mac is an American entrepreneur who has started, scaled and sold six companies (all seven or eight figure exits), most in health & wellness or internet commerce sectors.  Mac advises entrepreneurs through his Exit DNA program. Mac discusses the vision owners should adopt to build the strategic value of their business and see the acquisition through the buyer's perspective. Mac and his companies have been featured on CNN, The Wall Street Journal, Fast Company, Business North Carolina, USA Today and The New York Times. Notable ventures include: KYCK (acquired by NBC Sports), Mountain Khakis (acquired by Remington) and InternetSoccer Network (acquired by division of News Corp/Sky). He additionally served as a member of the Board of Directors for Lending Tree (NASDAQ: TREE) for over five years and is currently an angel investor in over 50 companies. Mac is the owner of the Spanish soccer team Algeciras Club de Futbol.

Selling a business is the American dream, the pot of gold at the end of the rainbow, the reward for years of hard work. Successful entrepreneurs make countless sacrifices in hopes that they would someday reap the benefits of their labor and live a new life of vacations, recreation, and prosperity.

You only exit your business once, so you should feel confident passing this milestone. A successful business exit reflects the preparation done beforehand. Failing to plan is planning to fail.

The owner of a privately held company has several alternatives on how to exit their business. In the absence of an exit strategy, events will inexorably dictate the final exit plan. A costly involuntary exit may be caused by death, disability, divorce, disagreement, or distress.

Selling Your Business with David King will help you take control of the sale process and make it positive one.

Transcript

David King:

Welcome back to Selling Your Business with David King. I'm David King. I'm the author of Selling Your Business. Begin with the End in Mind. It's available on Amazon. Please subscribe to this podcast and this YouTube channel. Today we have the great pleasure of being joined by Mac founder and a who man who is exited over six businesses in the seven and eight figure range. Mac, welcome.

Mac Lackey:

Thanks for having me. Excited to be here.

David King:

Yeah, it's great to have you. You've also got a, a coaching program for business owners called Exit D n a. Is that your, that's your primary Yeah. Work these days.

Mac Lackey:

It is, yeah. So after I'm, I'm happy to go into them, but after I sold my sixth company back in 2018 mm-hmm. <Affirmative> I ended up being asked to speak in an event, and it was ironic. I really spent my head my life with my head in the sand. Up until that point, I was running my companies and spending time with family. I didn't go to events, I didn't speak. And so these guys asked me to speak at this entrepreneur's event mm-hmm. <Affirmative>, and I just said, look, I'm not a great speaker, i's not what I do. And they said, well, just, you've exited a bunch of companies, talk about exits. And so I got up on stage and really just shared stories, you know, things I had learned, mistakes I made, which were a lot. And after the talk, probably eight or nine of these entrepreneurs, very successful entrepreneurs, came up and said, Mac, I need your help.

Like, the things you're saying on stage are very different than what I've heard from my C P A or my attorney, or in some cases my m and a advisor, and you have a different approach. And so really at that moment, it was kind of a light bulb moment where I said, you know what? I've had an interesting set of experiences that seem to be unique relative to some of my peers. And I wanna help people. It's kind of the second part of my life. How can I really help? And so, yeah, today I, I spend probably 50 plus percent of my time mentoring through exit D n A working with entrepreneurs, working with founders. And then I actually completely unrelated. I own a, a professional soccer team in southern Spain, which is a passion. So I'm back and forth to Spain a lot for that, just because it's something I really love. And so yeah, that's kind of how I spend my time, that and my family.

David King:

That's awesome. And I do wanna walk back through your career to date but I want to ask about exit dna. Is, is there a typical size of the businesses that you're mentoring? How, you know, the sweet spot that you serve?

Mac Lackey:

Yeah, that's a great question. I would say exit dna. Mm-Hmm. <affirmative> works with a pretty broad set of entrepreneurs. No real industry focused. I'm pretty agnostic as it relates to industry agnostic as it relates to geography. We have members from all over the world. The average company is probably between high seven figure and mid eight figure revenue range. I think very much in line with a lot of what you talk about. And mm-hmm. <Affirmative>, that's a, it's an underserved market. I am, you know, I'm not a broker dealer, I'm not licensed, I don't do anything with the actual transaction. My entire focus is really helping founders get kind of confidence and clarity on how do they maximize value in preparing, you know, before they meet with their advisor, before they talk about two perspective buyers, what are the things they need to be doing to really maximize value. So yeah, that's kind of the, the range. And then I also describe it as modern industries, meaning e-commerce, health and wellness. Mm-Hmm. <affirmative> things that are, that are, you know, although I don't really ever say I absolutely won't help someone, but I do end up saying no when someone has a very traditional old line industry manufacturing company, mainly because that's just not an area I feel is equipped to add value. So most of my clients are in pretty modern technology forward type businesses. That's kind of where I, I generally focus energy.

David King:

Mm-Hmm. <affirmative>, personally, I could use more health and wellness and less e-commerce. That would help my lifestyle a little bit, but hey, we, we can always look forward and aim to do

Mac Lackey:

Better. That's right. So,

David King:

Let's rewind here. You played collegiate soccer, all American, the professional football as well there, huh?

Mac Lackey:

Yeah, so a big, big part of my life growing up, I would say was dominated by soccer. It was just, you know, my, my passion, all of my goals and dreams kind of ended at soccer. You know, I, I wanted to play in college. I dreamed of being an All-American, cuz in my mind that was an ultimate achievement. Mm-Hmm. <affirmative> cause of my age. It was before MLS existed before there was really an opportunity for Americans to go play abroad. Very much so. So yeah, I, I was very fortunate to, you know, play through college. Played the very first year professionally in a league that's now called the U S l the very first year that league existed. So I played professionally soccer, played on a US team that went to Brazil in Argentina and met some of my idols and Pele and Mess and Madonna. And so soccer's been a big, big part of my life. And up until I decided to stop playing soccer, I didn't think about anything else. And so so yeah, it was a pretty big theme in my life.

David King:

That's funny. The, I I grew up in Jacksonville, Florida, and we always wanted a professional sports team, but we did, we got an N A S L team, I'm sure you remembered that back in the days, the Jacksonville team in, and there were a lot of former good players that played in the N S N A S L. They were kind of past their time from their home countries. People like gerd, Mueller Pelee came and, and played for the New York Cosmos. Do do you remember that from growing up?

Mac Lackey:

Yeah, I I certainly remember the N A S L and interestingly, Charlotte, North Carolina, which is my hometown, where I am today. We had an a s L team when I was probably eight or nine or maybe 10 years old. And, and my little Charlotte team won the national championship the very first year of that league. And it was kind of the heyday, much like you said, all international players from around the world who were older in their career kind of passed their prime, but really, really talented players. And we had 20,000 people at a, you know, overcrowded attendance at a stadium. So it was a, a lot of fun, but mm-hmm. <Affirmative>, but then all those leagues really disappeared and soccer went through kind of a dark they did for a while. It was kinda, especially on tv, it was really difficult to find. And I'm jealous of kids today that can watch amazing matches every day and watch, you know, videos and social media follow. Cuz for us it was soccer made in Germany on Sunday night for 30 minutes. That's about all I got on tv. <Laugh>.

David King:

Yeah. I don't wanna get too far into the soccer cuz I think we could go there for a while, but I do wanna play off that because both of my kids play soccer and at both of their games, I'm the parent who's yelling, shoot, shoot, shoot, shoot, shoot, because they just, it, it happens every single time that you, why don't you just shoot, you got the ball, you're close enough, you keep dribbling, it's gonna get taken away. You get closer enough, you're gonna, and how often do you see the same thing with entrepreneurs where you're at a good spot right now? This is a good time to just lock and load and, and see if you can test the, the market because you know, the, sometimes you, it's a good time to take the money off the table.

Mac Lackey:

Yeah, that's a great, it's a great analogy and tie in. I mean, I, I see it a lot. We, we actually through exit d n you know, I'm living vicariously through entrepreneurs who are on this exit journey mm-hmm. <Affirmative>, and I've had quite a few conversations about the fact that, you know, some have turned down offers that I think are really, really life-changing opportunities. Mm-Hmm. <affirmative> and the tendency of a lot of entrepreneurs to wait just one more quarter or just one more cycle and try to top tick the market. Mm-Hmm. <affirmative> that is often a mistake. If anything, I probably could be accused of selling too early, you know, I mean, because I felt so strongly that if I have an opportunity to take my chips off the table to de-risk or to pursue something else I'm passionate about, I really took the opportunities when they came mm-hmm. <Affirmative> knowing statistically there may not be another one. And sadly, I've watched it even within, you know, exit d n mm-hmm. <Affirmative> and, and people that I know that really thought, you know, one more quarter and one of those in particular that next quarter landed amid Covid and they watched eight figures of a deal disappear. It happens. So yeah, I'm a, I'm a big believer in the opportunistic, take advantage of opportunities when you can because you never know what the future holds. So it's part of my sort of teaching for sure.

David King:

Did you, when you started your career and you had your first business in 95, did you start with the idea that, okay, I'm building this with a mindset towards selling? Did you know already to do that?

Mac Lackey:

No, I have to admit, you know, it's, it's two things that are really interesting about my first business experience in, in that sort of vein. One is we absolutely started because we wanted to build something. We thought the timing was great, we were excited about it. We had no energy, you know, mental state or even understanding of what an exit might look like. We were self-funded, kind of typical garage startup. The timing was amazing because we started an internet company the first quarter of 95, right when Netscape launched the commercial web browser. So we, uhhuh <affirmative> called the internet kind of wave one really well. But so we didn't, didn't think about it. And then we actually got offers inbound unsolicited offers on our company that ultimately led to a life-changing exit. I had an eight figure exit in my mid twenties.

 But what's really interesting about that is I feel so strongly and I teach almost every day, that it is unlikely if not unheard of, that those inbound life-changing offers are gonna show up, I believe very strongly. And everything that I've done since then is I had to create those opportunities. I had to sell my business, not, you know, someone wasn't coming in knocking on the door. It happened once I consider myself very lucky. It opened my eyes. So that one was, was really unique cause of the timing, the space was so hot and we had pretty valuable, but ever since then, every business I created, everything I think about is creating the option to exit. Because I know if I have the option to exit, someone wants to buy it, someone's willing to pay a premium, every other option's available. I can raise money, I can recapitalize and take chips off the table. You know, that the hardest thing is to sell a hundred percent of your company for maximum value. If I design for that and prepare for that and think about that, all these other things are a little bit easier. So that became my mindset in 1998, right after that first exit is it was an eye-opener and I need to be thinking about these things proactively. So that's kind of when it changed for me.

David King:

Yeah. Yeah. It's, it's funny. I'm surprised I haven't bitten a, a hole in my tongue from the need to, to bite it and hold it and not tell people, Ooh, you could have done this or you could have done that cuz it's too late now when it gets to the sale time and things that they probably should have done differently. So that's, that's the point of my book is begin with the end in mind and, you know, there's certain things that they can invest in and get right and it'll take a little bit of extra money. And then there's other things just don't make these mistakes along the way.

Mac Lackey:

Right.

David King:

And one thing that, you know, entrepreneurs, they compare their success with each other and, and sometimes it's just apples and oranges. I've worked all over America in different times and like say the heyday of the.com boom. I mean, they sure people were going public, they were getting venture capital, they'd get seed money before they even had their website reserved. And yeah, that's like playing basketball. If they lowered the gold to four feet and made the rim bigger and just threw a baseball through, I mean, you were going to go public. It was a given. And then all these other places where it's just, there's not that much early funding. There's, it's a different business climate and everybody you know, just kind of needs to see how their own success looks based on where they, where they are, what they've done. Do you get that a lot, kind of this comparisons with other markets?

Mac Lackey:

Yeah, I think one of the things that I've seen a lot, and I have to, you know, advise and coach around is this number people have in mind because they're comparing to something they've seen in the media, maybe even in their own industry, much less others, which can be apples and oranges to your point. You know, people have it in their mind that they need 25 million or 50 million or some, you know, money. And it really is important for people to think about and understand what is the goal, why do you want the exit? Because for a lot of people, when you start really digging in and they say, well, I wanna slow down and spend more time with family, or maybe I'd like to have a place at the beach, and you start doing the thinking in math and say, you know what, if you had 3 million that would change tomorrow.

You know, you could buy the beach house, you could, you know, hire someone to be your president, take time off. So I I really, you know, kind of challenge entrepreneurs to think about that ultimate goal because the yardstick, if it is based on what you've read in the press or what you've seen from other entrepreneurs, it can be, it can be pretty damaging because that's what keeps people trying to get that extra, you know, dollar out of the deal versus just take your chips off the table and live a great life. You know, it's, it's so it's something I I see a lot and I have to you know, kind of coach people through, because a lot of people have a, a number in mind which is completely arbitrary, not based on anything that they need to go out and do in life or that they're comparing themselves to someone that had a giant exit. And what's really important is what do you need and want for yourself and your family. Mm-Hmm. <affirmative>. And a lot of people haven't really taken the time to, to think through that.

David King:

So, you know, we're, we're talking about the actual exits here and akin to playing professional soccer. But if you, if we're gonna rewind here and say, well, but wait a minute, how long do you need to work with somebody to build them up to help them be ready to achieve a realistic goal? That's a good one. H how many years to would you like to work with the business owner to get them ready to exit? Successfully?

Mac Lackey:

Yeah, so there are a couple things that I think about. You know, one is if someone is two or three years out from exit, the great news is there are lots of very simple actionable things that they can do that don't take a lot of time, but they need time to compound into value. And so two to three years for me is, is anything beyond that's great, but if you have two to three years, you have enough time to start doing things and making changes in your business without completely disrupting what you're doing, that will compound over time into a lot of value. The other thing is when people join Exit d n a, they join, it's a year long program, not because it takes a year to go through everything we teach and share, but because every single person I work with is busy running a company, like they don't, they don't have enormous amounts of time.

And so I want someone to have a year to join our live sessions, access our content, and fit it into a very busy schedule. So in a perfect world, someone would come to me and say, I'd like to sell my company in three years or more, and I'm gonna join ex exit d n a so I can work with you, join with these other entrepreneurs around the world who are on a similar journey, learn from them and start implementing these things because in a few years, everything will be ready. If someone's, you know, wants to sell in six months, I always tell 'em like, of course they can sell in six months. I just don't have the time to really help 'em optimize things the way they they should. So that's, and you know, I I similar to you I, you know, I wrote a, an ebook, so not a a published book. I have an ebook, exit dna.com/book free. Simple stuff that is exactly the kind of things that I know you go into great detail around. Like, hey, just start making actionable steps now. Mm-Hmm. <affirmative>. So you have the, you avoid the scramble in the future cuz as you said Exactly right. If you wait until it's time to put your company on the market, or you need to sell because of some life event, someone gets sick, whatever happens

David King:

Mm-Hmm. <Affirmative>,

Mac Lackey:

It's too late. It's too late. Right. You still can sell, you'll never get maximum value.

David King:

Yeah. Now, would you mac, would you compare exit d n A with a lot of the other, you know, c e o round table groups where there may be a coach, but, and I've chatted with a number of the people who coach various c e o groups. They're largely focused on operating the businesses and and dealing with issues that come up. But they're not so much focused on preparing for an exit. They're like, wow, we could use like somebody to come in and explain the whole exits process, how to prepare for that. So a lot of these CEOs are, are spending time wisely, you know, brainstorming with other CEOs and getting coaching, but it's not necessarily geared around the exit strategy. Do you feel like yours is different?

Mac Lackey:

Yeah, I mean our, all we do is it's, you know, hyper niche just focused on the exit process. Or what I always think of is the, the option to exit. What I want is a founder or an entrepreneur or a leader that joins exit D n a to have that, you know, confidence, clarity, what they need to do, how they need to do it, so they have the ability to sell it for maximum value. Mm-Hmm. <affirmative>, they can choose not to sell it. They can keep growing it, they can do whatever they want, as long as they have the option, then we've done our job creating that opportunity for them. And we, you know, just because all of the people I work with are running successful companies, of course some of the things that we do in talking about exits also help, you know, your business scale a little faster.

Cuz we talk a lot about process and efficiency. If you're getting yourself organized for due diligence, you're just getting yourself organized. So it has other benefits and, and you know, things that happen as a result of preparing for an exit. There's these, you know, downstream benefits. But we, we really try to kind of hyper focus. And so I, for the most part you know, not that I don't have competition cause there's plenty of people that are, you know, trying to help people mm-hmm. <Affirmative>. But I, I have such a, such a real focus. A lot of my members are in other mastermind groups. They're in Vistage, they're n eeo, they're in, you know, some oth someone else's mastermind. I participate in a few masterminds and, and we are a, a niche that kind of mm-hmm. <Affirmative>, you know, adds value to those kind of conversations is, has been my general experience.

David King:

Mm-Hmm. <affirmative>. So if you met someone who today was starting a business or, you know, one month into it and, and you were gonna give them a handful of tips and say, focus on these either, you know, do this or don't do this, what, what's the most important things you would hit upon with somebody just starting up a business?

Mac Lackey:

So, yeah, if it's really early in the business, I think one of the biggest lessons that is important, or one of the biggest things to understand is that when you're building a business, then you're talking to your peers and you're talking to the industry. Everyone talks about financial things, revenue, ebitda, market share, financial metrics, kind of top to bottom. And I know from lots of personal experience good and bad that what people ultimately acquire in the future and what people pay a premium for and what people invest in, if you're talking to venture capitalists or growth equity, private equity is they invest because you have created something so strategically valuable that it's worth something to them. It doesn't matter. Not that, not that revenue doesn't matter, EBITDA doesn't matter, but no one buys companies because you're doing 2 million in ebitda. They buy your company because the 2 million in EBITDA is generated by an amazing product.

Or you have an amazing set of clients, or you have a patent or a trademark. And so I really, really encourage early stage entrepreneurs to focus on creating and building strategic value and making sure that when they do, whether it's a product or a, a processes or whatever it is they're doing, that they are thinking about it in the lens of an exit. You know, is it proprietary? Have you protected it with intellectual property? Is it a competitive advantage? Because if those things are true, you're adding enormous exit value for the future. But today you're differentiating from your competitors, you have something to talk to clients and prospects about. So a lot of what, what I would talk about early on is strategic versus financial. And that's, that's kind of like 1 0 1 foundational stuff for me.

David King:

I, I agree wholeheartedly with that because I've seen over the years that the strategic buyers that tend to pay the most are strategics that aren't in the same industry. They're not looking just to add to market share. They're not looking straight at your numbers and saying, oh boy, we could, you know, we could add those in. They're looking for something complimentary to what they do today. So you need you exactly like you're saying, your proprietary product, whatever process to be something that's unique that, that the strategic buyer's going to want.

Mac Lackey:

Yes. Yeah. I, I actually had a, a session this morning with some of our members in, we have this session called Creating Your Irresistible Exit Story, and it was talking about how you articulate value that you've created to buyers. And the kind of case study or example I gave was talking about one of my sports related tech companies, which I ultimately sold to N B C sports. Mm-Hmm. <affirmative>. And it was such a good example to illustrate the point because I said, you know, NBC Sports, I believed we had superior technology. I thought we had the best products in the industry. We were generating revenue, not a lot yet. It was a store early. We had an amazing team. All these things that I would've said, check, check, check, check that someone would wanna buy. When we sold the company, about 24 hours after they acquired the business, they turned off all of our technology.

They basically bought our company because I had a distribution agreement that was exclusive that gave them access to clients they wanted. So if I really like cut it all down, the reality is we sold a a multi-million dollar company for a two page document because it was an exclusive agreement I had. Everything else was so secondary to them. Yeah. They, they could care less. Yeah. And, and so, you know, it, in a perfect world, you're stacking value, you have ebitda, you have patents, you have, you know, you're just, all these things were valuable to buyers, but in that case it was like they wanted the one thing, but that one thing was worth millions of dollars to them.

David King:

I think there's one truth out there. Every single deal is different. There's gonna be something about your deals. It's not like other ones. You're gonna come up and say, I nobody else has seen this. I'm like, good. Join the club. There was something about every other deal that no one else has seen before. We're just gonna have to solve this rental.

Mac Lackey:

Exactly. No, that's right. They're all, there's some common truths and some common sort of frameworks and things, but there's always uniqueness, as you said. Mm-Hmm.

David King:

<Affirmative>. So what do you see people overlook? The, the entrepreneurs, they, they, you know, focus head down constantly working. What are they, what are they overlooking?

Mac Lackey:

I think, I think there're two probably things that would pop to mind quickly. Mm-Hmm. <affirmative> one is the, the path of lease resistance is to be heads down until it's you're, you have decided I need or want to sell mm-hmm. <Affirmative>. And that clock starts. And what happens at that point is they're not prepared. And therefore either they're doing double duty trying to like, keep their business afloat and growing and they're trying to get organized prepared, do these things, knowing that there's not enough time mm-hmm.

David King:

<Affirmative>

Mac Lackey:

And that that creates a bunch of downstream problems. Because as you know, the minute you enter a process, your business needs to be stable and growing mm-hmm. <Affirmative> through the process. And, and yet an exit is very demanding from a time perspective. If you are distracted before you start the process trying to get things organized mm-hmm. <Affirmative>, you already putting your business at risk, then you enter a process which will suck it out of you. Mm-Hmm. <affirmative>. So the big one to me is you have to have an eye towards that option to exit kind of throughout the journey. Even if it's only 30 minutes a week, an hour a week. It, it has to be a constant kind of preparation. And people overlook that thinking, well, when I'm ready then I'll do that work. The other thing is the path of lease resistance is, you know, they think about their own industry way too much.

I think you touched on this as well. People just think, I'm gonna sell to a larger version of myself. I believe you should spend a lot of time well in advance of ever selling your company, thinking about who in the world values what I'm creating, what different industries are they in? What different products do they offer? What geographies are they in, in the world? Because the more broadly and creatively I'm thinking about who cares about what I'm creating when it comes time to exit, I already kind of have a playbook of multiple industries, multiple reasons that people would wanna buy my company. And I feel like a lot of entrepreneurs don't believe that's their job. They're gonna ultimately hire an m and a advisor. Great, great choice, but the m and a advisor isn't the industry expert that's had three years thinking about it, which they should be doing. So I believe the entrepreneur is sort of incumbent on us as entrepreneurs to be thinking about these things and putting some energy into these things years in advance of ever selling a company. And those are, those are typically overlooked.

David King:

You're I think about my age, so you're old enough to remember live aid, the concert and we do you remember Crosby Stills and Nash performed and I remember when they came out, whoever was was announcing said, oh my God, if they had known they were gonna be back together that today, they wouldn't have let themselves look like this <laugh>. So, and businesses are gonna go through this beauty contest to, to get this big check at the end of the rainbow. Now I typically, the accounting is an easy area to point to and say, come on, if you knew you were gonna be doing this at the end, you wouldn't have been so cheap at the beginning and you'd have cleaned your books up a long time ago. Yeah. accounting, are there other in addition to that, that you think people really probably, and I know we just kind of talked about what they overlook, but the specific areas and the nuts and bolts of the business?

Mac Lackey:

I'd say the two, the two biggest in my mind are one, the, the true organization of their documents. You know, not some are financial, but you've got legal, marketing, SOPs, operational, all those different spreadsheets, word docs, PDFs, that define how a business runs and operates. What you know, and I know is that the minute you decide to sell your business and someone's interested, they're gonna send you a due diligence request list that is gonna far exceed what you have likely organized <laugh>. And what you're gonna find is they're gonna ask for employment agreements and you're gonna look and say, well, some are in a file cabinet or some are in a Dropbox folder and I have four people that don't actually have employment agreements and it's just kind of a, a, a mess. Mm-Hmm. <affirmative>. So one of the things that, that I recommend is, and we often work through, is I take a robust due diligence request list from a big national law firm and I have our clients create in whatever, you know, box, Dropbox, Google Drive, however they wanna do it, their entire document set based on that due diligence request list, and then just keep it updated constantly.

That's where you save your files. That's because when it comes time to respond to due diligence, it blows people away. If you can respond instantly in a logical format, and almost no companies have that. And so that one to me is, is really easy if you start now and you are disciplined over time, if you wait until the end, it's, it's a nightmare. The other, there's a bunch of little ones, but one I always think is funny is often on a due diligence request list, you know, people, entrepreneurs start companies, they have operating agreements, they have, if they have investors, they have documentation around that, those documents get signed and put in a drawer and never, never read mm-hmm. <Affirmative> for most entrepreneurs. Right. The reality is you're probably legally supposed to be having a board meeting every month or every quarter. You're supposed to have minutes.

You're supposed to have certain things that happen on an annual basis that nobody does. Mm-Hmm. <affirmative>. So one of the things I've, I've, you know, often recommended is pull out your operating agreement or call your attorney, get them to give you a two page cheat sheet of compliance. What are you supposed to be doing? And anything that you're supposed to be doing if you start even two years into the business following those real simple things, cuz it's usually not much work at all. Again, prospective buyers are gonna be blown away. You know how many times I have seen a due diligence request list that asked for board minutes, everyone mm-hmm. <Affirmative> I, I bet it's 20% of the time that a company responds to due diligence with an actual file of the minutes from all their board meetings. Mm-Hmm. <affirmative>. And it can be as simple as we had a board meeting, we discussed strategic business, we closed

David King:

Mm-Hmm.

Mac Lackey:

<Affirmative>, but it's professional. It mm-hmm. <Affirmative>, it shocks people and that translates to value and people don't do it. It's simple.

David King:

And as an attorney we can go back and plug that gap, but it looks like the piece of chewing gum that we stuck on a gap there. We just had a gap before and now we've got something that just kind of rattles off boilerplate language.

Mac Lackey:

Exactly. Right.

David King:

So looking back over the six businesses that you've sold, what's the recurring theme of things you did right that really caused a, a home run?

Mac Lackey:

So, you know, in my case my businesses themselves had some degree of diversity. You know, I had tech businesses and media businesses. I had an apparel business. So they were all slightly different and unique. There were a few common threads, but I didn't have a repeat, you know, SaaS theme that was constant throughout. So all my businesses were a little bit different. But after that very first company the thing that that really made the biggest difference is a lot of what we're talking about here is the minute we started looking at our business through the lens of a perspective buyer and asking ourselves the question, what would a perspective buyer think about this new hire, this new product launch, this new office we're gonna open whatever our business decisions were. That became such a clarifying lens. Mm-Hmm. <affirmative> that I feel like, I mean, we made a ton of mistakes for sure, but that was such a constant theme and dialogue for me and my leadership teams that we were kind of intentionally designing the business so that when it came time to have that conversation just made sense to prospective buyers.

We made smart decisions in the minds of buyers. Not that we had to sell it, but it was such a constant theme that that is definitely one of the things that, looking back I did, I did well, is we just constantly said, would this be an asset or a reliability for a buyer? Would this be smart or dislike by a buyer <laugh> mm-hmm. <Affirmative>. And the more we talked about it, the more clarifying those decisions become.

David King:

Well, Mac, thank you so much for joining us. This has been incredibly informative. And I'm sure all the, the team members of Exit D n A, all the people are happy that they're working with you. And I definitely would love to have you come back again sometime and maybe we can break it down and, and pick a specific topic to cover. It's a pleasure to meet somebody with some fellow North Carolina roots. And anyway thank you so much and look forward to seeing you again sometime.

Mac Lackey:

Thank you so much for having me. Look forward to it.

David King:

And thank you for joining on Selling Your Business with David King. We will see you next time.