Stock Your Shaving Cream: Interview with Sean Griffey

Elizabeth Shea sits down with Sean Griffey, co-founder and former CEO of Industry Dive, to discuss his journey of building a bootstrapped media company and navigating two successful exits. Sean shares how he and his co-founders left stable careers to launch niche industry publications at a time when investors were chasing "the next Buzzfeed” and why their contrarian strategy paid off. He reflects on the differences between partnering with private equity and running a competitive sale process to a strategic buyer. He also touches on the importance of financial transparency and the role of strategic communications in appealing to prospective buyers. This episode is for founders looking to maximize their enterprise value and find a buyer who aligns with their culture and long-term vision.

Transcript

SPEAKER_01 0:00

Hello, and welcome to Branching Out, the Tree Fork Strategies podcast. I'm Elizabeth Shea, the founder and CEO, and I created this show to help business owners navigate the internet outside of an exit event. So each episode, I sit down with seasoned founders and CEOs who have successfully sold their companies through a strategic or financial transaction. Together we discussed what went into their decision to sell, what worked, what they would do differently, and the valuable lessons that they would like to pass along to founders with a sale on the horizon. Our goal is simple to provide a playbook that you can use as you approach your own sale with confidence and clarity, knowing that you're not alone in the process. This is Branching Out. Thank you for joining me. Hello, everybody, and welcome to Branching Out, a Tree Fork Strategies podcast. I am so excited to have Sean Griffey in our office today, and we're going to be talking about his journey as an exited founder. Um, so hello, Sean. Thank you for joining us.

SPEAKER_00 0:58

Thanks for having me. I've been excited to come on to this.

SPEAKER_01 1:01

Well, we're really interested to hear you, Story, because you had quite a rise, a meteoric rise and success story with the exit of your company. So Sean joins us as the co-founder and former business owner of CEO of Industry Dive, which was a very notable publication that I remember from way back when. I do remember when we did happen to ring the bell at NASDAQ in like 2018, 2019, something like that. So you were already starting to celebrate some of your success. So I will turn it over to you just to start at the beginning, if you can. Can you tell us a little bit about your story, how you got started? You know, this was a couple guys that were just thinking this is something that we want to build. So tell us your background.

SPEAKER_00 1:37

Yeah, um, you know, I I've I've been working in digital media now for almost 20, 25 years. And before starting industry dive, I was at a company called uh Fierce Markets, which had, you know, niche business publications primarily covering the telecom and life science space. And I wasn't the founder of that, but I was part of the say first 10 people there, early team, and and we grew that business for the founder, sold it to a private equity-backed strategic, and stayed on and ran it for a number of years. And and all the while I saw changes in uh the landscape, opportunities to do something new, and uh fortunately had two two uh really good coworkers at Fierce Markets, uh, and the three of us decided in in about 2012 to go off on our own and and try to launch something new and different. And so we left a stable job to uh move into uh old corner market in Adams Morgan and and launched industry dive.

SPEAKER_01 2:39

Oh wow. Well, I remember all the fierce publications, and so we thought, wow, that's a really bold move, particularly at that time, because you know, you were going to be starting a new media company when everything was going digital.

SPEAKER_00 2:50

Yeah, you know, I mean we were we were a bit contrarians there in that if if you looked at digital media at that time, um, everyone was trying to be Buzzfeed uh or upworthy, and it was how do you do social and how do you do big mass broad publications? And and we launched an electric utility publication and a waste and recycling publication uh on day one. So I always say we bootstrapped the mostly bootstrapped the business. We had some angel investors from DC uh who helped us, but we tried to, you know, when before we launched, we were going to try to raise real money. Uh and you know, we went and talked to folks who invested in media, and and they they really weren't excited about electric utility publications, they weren't excited uh about waste and recycling, they were looking for the next buzzfeed. So um we were accidental bootstrappers in that no one believed in our vision.

SPEAKER_01 3:43

Wow. Okay. So um I think a lot of the founders on this program have been have have bootstrapped their business, and that's that can be tough. Um, were you ever lured to try to raise money down the road when perhaps VC started to pay attention? Because you did grow.

SPEAKER_00 3:58

Yeah, you know, honestly, I think we thought we would at some point. Um and uh we went to we went to look and raise money uh probably about 18 months in, and we had some transactions, you know, some traction at that point. Not a not a ton to be honest, like it took us a number of years. Um, but we got a couple term sheets back and we looked at them and didn't love didn't love the terms, didn't love how they saw the business. And we told ourselves, if we can make it another nine months, these term sheets will look a lot different because we knew we were on the precipice of growing, and nine months came and the business was generating cash flow, and we just decided we didn't need didn't need the money and that we could grow on our own. So, so we got very lucky um to not raise money. And and honestly, in the type of business we were building, I think in media, digital media, venture is is a bad it it does more harm than good in the sense of venture puts you on a timeline and it takes a while in media to build an audience, right? Um and that doesn't usually correspond with venture timelines. And so we really got lucky to that we built a much better business by bootstrapping.

SPEAKER_01 5:16

So that's really interesting from the from the standpoint of bootstrapping and then actually turning cash flow positive, as I understand, at some point. And when did you determine that the right thing to do would be to look to exit the business? Or did you approach it that way? Was it an accidental exit or was it very purposeful?

SPEAKER_00 5:33

Well, I you know, I it's it's funny, I always talk about as almost two exits, right? So about seven years in, we brought in private equity. Um, and that was more accidental than intentional. And then three years after that, uh, we sold to a strategic, and that was very intentional, very much a driven process. Um, but if you go back before we brought on the private equity partners who who bought you know a majority share of the business at the time, we were we were growing at a pretty good rate, um, but but still a relatively small business. I think we were you know a little under 30 million in revenue, doing about 25% uh EBIT to margins, um, 25-30% EBIT to margins. And we started to get inbound interest from other media companies from strategics in the space. And we had a couple offers in front of us and and didn't really love them for a number of different reasons. Either didn't think it was the right home or didn't think it made strategic sense, or just didn't honestly didn't like the valuations of some of them. And so we were planning to go on our own for a lot longer when uh Falfurious Capital, the private equity company that we partnered with, sort of knocked on the door. And for the first time, we had a financial person share a vision and talk about our business the way we talked about our visit uh business and share what they thought the next steps would be, which were our next steps, to the to the point where I had coffee with them uh the first time and I went back and talked to my co-founders and said, like, hey, have we been sharing any of these slide decks at conferences or anything? Because I thought these guys were feeding back our language to us to sort of flatter us into liking them. And it turns out that, you know, we were always contrarians until we met them, and it was the first time we found someone that shared the vision.

SPEAKER_01 7:24

That's so important. And a lot of our listeners are contemplating whether or not to go the strategic route or private equity, more of a financial transaction. It sounds like I had a very positive experience. Can you can you talk about how how important that is to be thinking about the fit or the shared vision? What what were the tenets that you looked at before you made that decision?

SPEAKER_00 7:46

Well, I mean, I think you know, the the funniest thing about before we, you know, partnered with Falfurious is we didn't run a process, right? And a competitive process where we went to markets and got bids and hired a banker the first time. And I wasn't sure that we would ever do that. I thought when the time comes, we would go find out the real market for us. But but before we done that, I had been spending a lot of time gauging the market, talking to different people, understanding our valuation, like what we thought a fair valuation was, what we could go. And when Falfurius came, we liked them immediately, not just from the standpoint of they get our business, but but culturally, like that they might be the smartest people in the room, but they never act like it, right? And there's a lot of private equity people where they come in and they feel like they're smarter than you, and that they know your business and industry more than you, um, and that they can run the business. And we really just loved the approach that Foul Furious had, and we knew it'd be a cultural fit. The the hardest part though was is it a fair offer? Without getting real market feedback, we didn't know would this be a fair offer. Um, so you know, talk to a number of folks about the offer, advisors, and different things. And and I think there was a uh standpoint of like, well, you might be able to get a couple million more if you go to market, but you would have to have to hire a bunch of advisors who would take a cut of that, uh cut of that couple million more. Um, you'd have to run a process that's gonna be really time-consuming and draining, and then you might end up with a buyer that will say give you five, six million dollars more, but you may hate them. And so then you're gonna have this real sort of moral view of like how much is it worth to sell the business to someone you don't like? We at the time just decided let's not go through any of that. We've got the perfect partner in front of us, we've got more than a fair offer. There might be someone willing to write a crazier check, but not materially crazier, and and we're gonna end up in a home we don't like. So we ended up with Falfurious mostly for cultural reasons. I s I see now other co-founders that end up taking the biggest check and the wrong home, and I see how miserable they are over time, and I'm very grateful, you know, the people who pushed us um to go to go with the right home.

SPEAKER_01 10:19

Yeah, you you sought out the right thing, and I think that's one thing that if a if a founder didn't have that experience, they've shared on this show that they wish they had, because the culture is that much more is super, super important, especially because part of your earnout is probably contingent upon you staying and be successful. So I assume so you kind of want to get along with everybody and not have it be as stressful. Well, so how did you educate yourself? And you said you looked at market valuations, like what process did you go through? Did you talk to did you talk to folks? Did you did you meet with anybody?

SPEAKER_00 10:48

Yeah, you know, I I think the best thing, and I tell people all the time, there are likely boutique investment banks in your industry, and the bankers there want to get to know you before you're selling the business because they want to build a relationship so that when it's time for you to sell the business, they want you to use them. And so they're very generous with their time. And so I would I would go to New York and some in DC, some in Chicago of boutique investment bankers, and I talk to them about my business uh and I get their advice, and and really what I wanted to know was like who who would be interested in us, and you know, what would we be worth to them? And then more importantly, I think one of the things that a lot of people don't think about more is what are people not gonna like about my business? We we spent real time saying, you know, my co-founders and I, like, what what are you know, asking folks what what are people gonna hate about us? And so then we could decide, do we want to do something about it, or is that something that we actually we like about us and and it's just gonna be a feature of the business, whether they like it or not. And I think there are some things that we, you know, really thought of and and intentionally tried to address, but also intentionally ignored.

SPEAKER_01 12:08

Right, right. Well, I mean, there are the standard things that companies look for, but um to the extent that that's defensible, and you can share this is why we're not changing these things, I think that makes a lot of sense. Um so can you take us to the second part of your of your acquisition track? Um, you said that you then had another exit to a strategic and you drove a process that time. Can you talk about what that felt like and how it was different from the first experience? Because you're rare that you've had you've had two. You've had two opportunities.

SPEAKER_00 12:35

Um it was incredibly draining, exhilarating, uh, with ups and downs. You know, I actually when when I have a a friend who's a founder going through a sale process, I always give them the same gift, which was I have this shaving cream that on the bottom of the bottle, the shaving cream, it says 90 day supply. And I remember going through our process. I'm like, at one point we were supposed to be done in 60 days, and I'm like, open a new shaving cream, and I'm like, I'll be done before this shaving cream's over. Just you just gotta remember this is gonna, this is gonna end. And I only opened two bottles, so it's uh, you know, it's only wrong one. But the you know, the the process is challenging. You've got to really be ready for it, but it was you know exhilarating at the same time.

SPEAKER_01 13:22

So you had a really good experience in your first one, really a smooth system, it sounds like. And then you went to the second acquisition by a strategic buyer. And were the terms dramatically different from the first one? I mean, how did you make the decision to actually go with the company that that selected you?

SPEAKER_00 13:40

Yeah, I mean, it was an entirely different process in the sense of we hired a banker and we did sort of the the roadshow where we put together presentations and went. We actually, I think, had 18 bids from companies in the in the start of it, and we picked five uh to kind of go through the whole process, and and we we were sort of simultaneously doing deep due diligence with those five to get to the the finish line. And and all the while we're selling ourselves, but the bankers sort of trying to drive competition among them to get the highest value valuation. So it was um, you know, you you you know, it was a mix of private equity and strategics that came in. So the you know, it would be trading our one private equity for the next round of private equity or or ending up with a strategic, which is what we ended up doing with a strategic. But um, you can imagine, you know, five people going through real due diligence, you know, a lot of people digging around, um, and a lot of a lot of questions about the business, a lot of time building models, answering questions, some of which you think are completely irrelevant to your business, and some of which are, you know, spot on.

SPEAKER_01 14:53

Totally. Um I remember just thinking that when I went through the process, I just felt like I had my head in spreadsheets all the time. I just like it's hard because you can't take your eye off the business either, unfortunately. Um, so tell looking back now, so you've been out for what, a year now, a little bit over a year? Uh, what what would you have done differently throughout either one of those processes? What advice can you share that might help someone that's looking to go through the process besides buying a can of shaving cream? Maybe buying two or three, buying them in bulk.

SPEAKER_00 15:24

I I think there's a couple things that I would tell people. Um one, you're not too small to get a financial audit and to build a relationship with an audit firm and get your books in order. Um, because you don't know when the right buyer's gonna come, and you don't want to be, you know, what one of the things that drives valuation is the buyer thinks you have good control over your business and they think it's a well-run business, and nothing says you're not, then the numbers not being locked down. And so I know there's a lot of people that will say, like, oh, I've got a good controller, I don't need a CFO, or we're, you know, we're years away, so I'm not gonna go through the expense and trouble of doing an audit, a full audit, or any of that. And and I would say if you're planning ahead, start now. And so, you know, you have a relationship with an audit firm that can kind of come in and you can produce clean audits right right away. And and more importantly, big buyer is gonna make you do what they call a quality of earnings sort of piece, and it's almost like a new audit. But if you've gone through the audit process, that's gonna be really easy for them. But if you're starting from scratch, it's gonna take a long time. So, so those types of things to be ready to sell, I think are really important to make this easy, but also to get the most valuation. I mean, that's one. I I think the other thing that I appreciated much more the second time that I didn't was from a marketing standpoint, we spend a lot of time marketing for our customers, right? Like that's that's the point. Like, we're doing marketing for our customers so that they buy from us and drive revenue. Um, there is a whole marketing component of marketing yourself and your business to potential buyers that takes years, takes years, and you need to get in front of people at conferences and get speaking spots, you know, on panels at conferences or have a presence somewhere so that they think your business is smart and that you're there's something dynamic there. And I, you know, I didn't put a lot of time into that early on. I was just heads down and growing the business, but that's part of the job. If you're thinking about building enterprise value, is building the reputation of your business among potential buyers is part of the job, and so you need to think about doing those types of things.

SPEAKER_01 17:52

I have to say, full disclosure, I did not ask you to say that. That is exactly my purpose for Tree Fork. So I know I kind of said it better myself, but thank you.

SPEAKER_00 18:01

Yeah, I mean, it's true though, right? It it makes so much sense. Everyone would stop and say, Of course we're gonna market or market ourselves. Like, what business doesn't market itself? But you've you know, the biggest buyer you have is the one who's gonna look at you, not someone who's gonna buy your product, right? Someone who's gonna buy the company. You've got to market to them as well.

SPEAKER_01 18:20

Completely. I mean, we talk about just the importance of executive visibility and to your point, like speaking at a conference and looking smart, and maybe looking bigger or looking to a certain way or positioning yourself.

SPEAKER_00 18:29

So I you know, and I'll I'll say another thing just about my one philosophy that I don't think people do is um everyone is very shy about sharing their numbers publicly. Um, and the the view is that that's like we don't want to tell people things are going well or going bad, but when you go to sell, everyone's gonna see all of your numbers. And one of what one of the things that we did was if we go on a podcast, we go whatever, we'll just talk about our financials, we'll talk about our numbers, we'll talk about our revenue at the time. And we were very open about it. And one of the things that did was people saw the growth, they saw the momentum along the whole way. And we weren't saying like, oh, we're profitable, like we're saying here's how profitable we were, and here's how much we're growing, and that really changed the perception of us among the industry by by just being open with the numbers. And and I'm not sure why people don't share it because, like, as soon as you go in a process, everyone's gonna see them, so you need to be transparent, sure. Yeah, you might as well tell them six months in advance, a year in advance, two years in advance, they're gonna see them eventually.

SPEAKER_01 19:39

Absolutely. I mean, I've never really understood why some companies want to inflate their numbers. I mean, the numbers are the numbers, and so so just out of curiosity, did you share your numbers with your team? And did you share with your team that you were looking to go to market?

SPEAKER_00 19:53

We always shared the numbers with the team and the growth and the revenue numbers, and I think that was very important for us kind of culturally, of the business we were and the transparency of it. We didn't say when we were going to market, to be honest. Um, we kept that possible don't.

SPEAKER_01 20:08

I was just curious.

SPEAKER_00 20:09

Yeah, and and it's it just we didn't want it to be a distraction. Well, a the the the first time we weren't actually going to market, someone kind of approached us, but even when we had an offer, we sort of kept it tight on where we were because these things often fall apart, you know, and so we didn't we don't want people's emotions to get in this, like excited, worried, excited, disappointed, you know. And so we just kept it to ourselves until the deal closed.

SPEAKER_01 20:36

Yeah, I mean that that's very that's very common. And there are different schools of thought on that. I was curious how how you manage that transition, just because a lot of people but to particularly if you're private equity back, though, typically people will understand that eventually there's going to be another.

SPEAKER_00 20:50

Yeah. I mean, this the second you bring in financial money, everyone knows that there's a clock on you, right? Like investors want their return.

SPEAKER_01 20:58

Yeah, exactly. So any any other pieces of advice that you might want to share with the I think you had said he had two or three. Anything else that you'd like to share in terms of the process or what it meant to you personally as a as a CEO and a and a person with a family and an outside life and all that good stuff?

SPEAKER_00 21:15

Yeah, I mean, listen, there's like a all kinds of things that we did right and wrong when you talk about. I mean, I think there's, you know, I look back and two things on advisors, right? One of my regrets is like we had some advisors in terms of accountants and lawyers and everything that were with us in the early days. And then in my perception, it's like the deal got too big and we wanted to graduate to bigger council, you know, and the rest. And and in some ways, I think that was a mistake. You know, we had we had good advisors and they were small, but they knew our business really well and they were connected to us. And we sort of like said thank you and hired bigger firms to do all this work with us. And I regret that. Like we didn't need to do that.

SPEAKER_01 22:00

Well noted. Interesting.

SPEAKER_00 22:01

Um I think the other thing though is like parts of this, particularly went through the second process, we had one company who had been circling around us for a number of years say, don't even worry about it. We're gonna, we're gonna buy, we're gonna buy you, and we're gonna preempt this whole process, and we're gonna put a number so big that we're gonna shut this whole thing down. And and it was someone who's got a reputation for writing big numbers, and um, someone we liked, and I was excited by it. And so I went to the investment bankers and said, like, listen, these guys are gonna take this business down, and this is gonna be a good home for us. And they wouldn't let us stop the rest of the process. And they said, This is all talk until the deal club closes, and we can go down this path, and we certainly want to see them, but we're not gonna stop everyone else, and we're not gonna stop all of this work. And we started going down the path with this company that had a lot of exposure in Germany, it was an international business, and this was early 22, and Russia invaded Ukraine, and suddenly this business that said, We're gonna take you down and we're gonna write the biggest check, said, We're not writing any checks. Like, we're afraid of what's gonna happen in a in the market in Germany. Like, we're we're sorry, but we're out. And had I been in charge, I would have been starting over from that standpoint. Like, I would have put all of my eggs in this basket because it was like the right home and the right buyer, and uh, you know, a good good home and good buyer. Wow. Um, and our advisors said we're not doing that, and very lucky that we had good advisors who wouldn't allow that to happen because we just kept on trucking through the process when when they left. And so, you know, that's one of the things I say is that buyers come and go, you know, and it's not a reflection necessarily on you or your business why they say yes or no. It's like they've got their own things going on um that change change the mind. But um, we got lucky there.

SPEAKER_01 24:08

Right. Wow, that is a great story. Thank you for sharing that. I mean, yeah, if you had gone with that one person or that one company, that could have been like it's exhausting too to go through that process and have to start over again.

SPEAKER_00 24:19

Exactly.

SPEAKER_01 24:21

So um, so you and your your co-founders, everyone has since departed from the company? Is that is that the case?

SPEAKER_00 24:28

We've all yeah, we've all all kind of gone our our own separate ways, but still regularly have lunch together. So it's it's strange to work with some you know people for a couple decades and see them every day and then don't see them. But uh, you know, I think we're very lucky in that, you know, three three co-founders, Ryan Wilmson, Eli Dickinson, and myself, you know, certainly a lot of ups and downs in the businesses, but I can't remember a time we ever had a huge knockdown, drag out fight. But I think the the one great thing is we've, you know, never questioned each other's intentions or integrity or or anything. So I'm kind of just the luckiest person in and who ended up picking co-founders. Wouldn't be here without them.

SPEAKER_01 25:10

No, that's terrific. And thanks for the hat tip to them because I do remember meeting them as well when we rang the bell um in NASDAQ. So what's next for you? I mean, you're young and active, and what's what's next for you? Do you know?

SPEAKER_00 25:22

Well, thanks for saying that. I don't uh, you know, I wake up in the morning, my back doesn't say that I'm young, but uh um it's nice to be perceived that way. Uh, you know, I I I told myself I'd say no to everything for a while and then see how ambitious I still want to be. And so it's been been about a year. I've been doing, I've joined a number of boards. I'm still on the board of the business that that bought mine, so that's one, and then sort of private equity backed companies uh that were like uh industry dive when we joined private equity, joined some of their boards and enjoying that. But one thing I find about being a board member is you can enjoy when the company's doing well, but you don't really own any of the success, so it's not as satisfying as doing something yourself and having real wins that you had a direct hand on. So I think there's it's at some point I'll be looking for the next big thing to you know get back to competing. I like competing, I like operating, I like winning in the marketplace. And I think at some point I'll probably start looking for that.

SPEAKER_01 26:23

I was gonna ask if you miss it at all. Do you miss the the pace? Do you miss the the business? Was there any transition that was tough for you?

SPEAKER_00 26:31

I miss a lot of the people. I mean, there's like, you know, there's there's some people in some meetings that, you know, the this weekly meeting, I'm like, gosh, I really like the people in that meeting, and and that was the one meeting on my calendar that I'd like never minded, you know. And there's some times when I got the opportunity to like go deep in a spreadsheet or get my hands in audience data. I loved all of that. I, you know, been gone a year and a full budgeting season came and went, and I didn't miss that at all. Didn't miss being part of a publicly traded uh UK company and having a budget season that starts in July and and goes for four months. And so, you know, there's good parts of the there's good things that you miss and and things that I'm happy to be done with.

SPEAKER_01 27:18

That's excellent. All right, well, thank you so much for joining us today. It's been a great story, and you've had you know two very successful outcomes, which is rare. So, congratulations and and hats off to you. So, thank you for joining us today, Sean.

SPEAKER_00 27:31

Thanks, Elizabeth.