Collective Hub - - FEATURE -

In early 2012, af­ter pitch­ing to VCs and large cor­po­ra­tions, the wine startup Vi­nomofo sold a ma­jor­ity stake to the e-tailer Catch of the Day, in a deal they thought would fu­ture-proof the com­pany. “With all the me­dia hype sur­round­ing the new part­ner­ship, Vi­nomofo did in­deed grow fast, as more and more peo­ple dis­cov­ered the site,” says An­dre Eik­meier, the CEO and co-founder of Vi­nomofo. But, be­hind the scenes, the founders felt in­creas­ingly vul­ner­a­ble.

“We saw an­other busi­ness that Catch had in­vested in get closed down and the founders were let go,” says An­dre. “It seemed, to us, as if Catch had a shift in strat­egy. We didn’t want that to hap­pen to us, too.” And so in June 2013, with the help of a group of an­gel in­vestors, they cut ties with their part­ners. “We bought the com­pany back with zero dol­lars in our bank ac­count,” says An­dre. “They weren’t good num­bers for our next man­age­ment meet­ing. But, it felt good. We started mak­ing bet­ter, un­com­pro­mis­ing de­ci­sions. There were no out­side or group agen­das or stake­hold­ers. It was just us and our cus­tomers again.”

Vi­nomofo had 10 em­ploy­ees and had moved their head­quar­ters from Ade­laide to Mel­bourne to be near the Catch of­fices af­ter the buy­out.

An­other com­pany had to deal with their sale (and sub­se­quent buy­back) on a much larger scale, af­fect­ing more than 15,000 staff in 27 coun­tries. It was in 2011, when the Intrepid Group created a joint ven­ture with TUI Group, a multi­na­tional travel and tourism com­pany head­quar­tered in Ger­many, to form a new com­pany, Peak, which was owned 40 per cent by Intrepid and 60 per cent by TUI. But due to a dif­fer­ence in philoso­phies and prin­ci­ples, the two split am­i­ca­bly in 2015, with the founders Geoff Manch­ester and Dar­rell Wade, who started Intrepid in 1989, buy­ing back their com­pany.

“The re­al­ity was we were a ter­ri­ble part­ner for TUI,” says Dar­rell. “We cared about things they didn’t. We sim­ply didn’t de­liver what TUI wanted or ex­pected, so it was a re­lief to them as much as it was to us when we parted ways.”

Sur­pris­ingly, the split had a pos­i­tive ef­fect on com­pany cul­ture. “Al­most the day that we ‘un­cou­pled’ in June 2015, our growth ac­cel­er­ated, our staff be­came more en­gaged again and we’ve gone from strength to strength,” says Dar­rell. “We’ve been cel­e­brat­ing record sales since the split, up 15 per cent across the group. We’ve moved to new of­fices in Mel­bourne and Lon­don, paid com­pa­ny­wide bonuses. Stay­ing with TUI would have changed that di­rec­tion of the com­pany. Ab­so­lutely!”

Mean­while, for oth­ers, the buy­back process hasn’t al­ways been a smooth ride. Snap­sort, a Cana­dian prod­uct rec­om­men­da­tion site, took 10 months and more than 20 dif­fer­ent pur­chase op­tions be­fore the deal was closed. “Get­ting a deal done was a mov­ing tar­get,” writes CEO and co-founder Christo­pher Reid in a blog post. “As I built in­ter­est and showed the abil­ity to pay, the price moved. It was a gi­ant game the­ory mindf**k try­ing to: a) be a rea­son­able hu­man with­out hav­ing the other side move the tar­get and b) ne­go­ti­ate some­thing rea­son­able for the team and in­vestors. In the end, we got a deal that worked; that is to say no one was su­per happy about it, but we could agree to close. That process in­cluded a few sharp el­bows, raised tem­pers and ir­ra­tional out­bursts. I didn’t al­ways keep my com­po­sure, but for the most part we all be­haved well.”

But don’t let these sto­ries put you off sell­ing. Ac­cord­ing to the ex­perts, founders just need to pro­tect them­selves.

“This kind of buy­back is still highly

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