FOUNDER BUYBACKS HAPPEN— AND CAN LEAD TO A BETTER EXIT

IN 2010, ENTREPRENEUR and venture capitalist Tony Conrad sold About.me, a network of personal-profile websites, to AOL for a reported $35 million. Two years later, Conrad, who stayed on as CEO, bought back the business for a fraction of that amount. AOL had planned to integrate About.me into its existing products, but the integration didn’t pan out.

Founder buybacks aren’t common, but they happen. Last May, Krave Jerky founder Jon Sebastiani reacquired the snack brand through his growth equity firm, Sonoma Brands. Sebastiani had sold Krave to Hershey’s in 2015 for $232 million. In 2017, Cindy Eckert, the founder behind “female Viagra,” regained control of Sprout Pharmaceuticals two years after selling the company to Valeant Pharmaceuticals for $1 billion.

Regardless of the sale price, it’s common for founders to experience seller’s remorse, according to Conrad. “I think every entrepreneur creates a narrative in their mind that they regret the sale,” he says. “Your psyche is maybe that you sold out.”

In 2019, Conrad sold About.me again, this time to a fast-growing startup—the small-business software company Broadly, which had claimed the No. 107 spot on the Inc. 5000 the previous year. Terms of the deal weren’t disclosed, but Conrad says he was happy with the outcome. His advice to founders planning a sale is to not rush the process.

“When it’s a really good fit and there’s good cohesion, the deal is going to get completed,” he says. “It’s in everyone’s best interests to slow down and have a really clear plan of action.”