Sramana Mitra: So this brings us to what? Fall of 2021?
Chris Sinkinson: Yes. Right after all that back to school stuff, Dave and I were completely exhausted and one of our biggest competitors out of the Boston area reached out to us. They had been noticing that we’d been winning some deals and we were starting to step on their toes a little bit.
They initially offered us a $20 million to acquire us, and we said no because there were a bunch of strings attached. Then they came back a year later and doubled the offer to $40 million. At that point, Dave and I were pretty tired because we had worked so hard to get vaccine passports up and running. We were really on the upswing.
Sramana Mitra: It was a good time to sell.
Chris Sinkinson: Exactly. We had a very interested buyer. We had a second buyer that was also interested, which we were kind of able to subtly play off against each other. So we thought it was a good opportunity. We were acquired by Rave Mobile Safety on 1 February 2022.
Sramana Mitra: All cash?
Chris Sinkinson: Yes, it was an all cash deal, and we were bootstrapped. So, our cap table had just myself and Dave. I recall our accountants and our legal team found it so easy.
Sramana Mitra: Acquirers love that kind of simple cap table as well. Acquirers love Bootstrapping to Exit situations.
Chris Sinkinson: Absolutely. It was very easy. Our lawyers would just shake their heads at how simple this was. So, we pulled it off pretty quick. The LOI was sent to us on November 18th and the deal was signed by January 18th and completely closed on February 1st.
It all happened quickly. At the very beginning, our lawyer on learning about the timeline said there’s no way this is going to close this fast. It’s just not possible. We worked so hard to get through due diligence and make sure everything went well, and it did happen. He was very surprised.
Sramana Mitra: Great. Wonderful story. What did you do since in the last two years? You didn’t have to go work for them?
Chris Sinkinson: We had a minimum commitment of three months, but we actually stayed for a lot longer than that. Rave Mobile Safety was owned by a VC firm Technology Crossover Ventures (TCV). They were getting to the three-to-five-year timeframe of ownership of Rave and were looking to sell it. They gave us a very small amount of equity to stay on for a little while because they knew they were probably going to be selling the company within the next year. Ten months later, it was acquired by Motorola solutions.
I always use the analogy – we were the really small fish that got eaten by the bigger fish that got eaten by the monster fish, which was Motorola. We worked for ten months with Rave to help them through their due diligence with Motorola. Then after working four months for Motorola, we decided it was time for us to step aside. We had a good team that had learned so much; it was just time for us to get out of the way and let them kind of have their moment.
So, Dave and I decided we would step aside. I think it was the first day of April or April Fool’s Day in 2023.
Sramana Mitra: Wonderful! Stories like this, where it’s capital efficient and precise, and founder led execution, founder led exit founder led returns.
Chris Sinkinson: Yes. It’s interesting because all throughout the process, we always kind of felt like we had a little bit of an imposter syndrome. When you’re running your own business, you have a crisis of legitimacy feelings. It was nice to finally see it all the way through and have the big exit; everything worked out well. All our staff got raises, more vacation, and better benefits. Everybody seemed to be happy about the situation, which was excellent.
Sramana Mitra: Well, there’s nothing illegitimate about your story. You had revenues, you had customers – there’s nothing illegitimate about this. Wonderful. What are you planning to do next?
Chris Sinkinson: We’re writing a book. We’ve been working on it for the past year, and I thought writing a book sounded easy. It’s not. So, when you write a book, you want to have a bit of a following. So, we started a podcast as well about a year ago. We’re starting our fourth season of our podcast next week. The book goes on pre-order on September 1st and is available for purchase on October 1st 2024.
The book’s called Startup Different. I have the arc here with me. But it’ll be an interesting story. We go through our story and with a lot of humility, we tell people things that worked for us and things that didn’t work for us and to avoid them. Dave is the main author. It’s in his voice and he has a very nice writing style. He’s funny and enjoyable to read. Anyways be sure to check it out. It’s a fantastic read.
Sramana Mitra: Sure. It’s very nice to meet you. Really enjoyed your story and good luck.
This segment is part 7 in the series : Canadian Brothers Bootstrapping to $40M Exit: Chris Sinkinson, Co-Founder AppArmor
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