Interview with Nathan G., Entrepreneur Who Recently Sold His Company to Telos
Q: What’s the background on your brand and how you got started?
When I started the brand, I was mainly looking to build something I could do manageably from the get-go. To me, launching a business in a space around lifestyle seemed manageable, where I felt I could start small and grow from there.
I drew inspiration for the brand from my own background. I’m from California, where we’re on a beautiful coastline and spend a lot of time outside in good weather with friends. Putting a coastal, aspirationally Californian element into my brand felt right. A lot of businesses are very anonymous. Here, I wanted consumers to get a feel for the spirit behind the brand.
Q: Any major learnings you had between Day One through the day you sold?
I learned a lot about consumer behavior, like who would look for certain products and how they would choose those products. I spent a lot of time thinking about the nuances of product attributes and the experience of the consumer using the product. From a more tactical side, learning all the ins-and-outs of the different sales platforms, marketing, and building the right partnerships to make sure you can operate the brand to the best of its ability were crucial to our success.
Q: What ultimately attracted you to the idea of selling your business? You spent a lot of time building a really fantastic brand, so I’m sure there was a lot of thought that went into the decision to sell it.
I’m always obsessed with growing, and I was obsessed with growing the business into something big not only to prove it to myself, but to make it something important for our partners, vendors, and ultimately our customers. What started as an idea for a product quickly became about the customers, their experiences, and their enjoyment of the product. I realized as it got bigger and bigger, I got into territory where mistakes had bigger and bigger ramifications. That’s when I realized I wasn’t the best person to continue operating it. For me to grow, and for the business to grow, it was best to sell it.
Q: Before you sold, had you been contacted by other buyers or brokers about selling your business?
I had a couple different groups reach out, but the timing was not right. I talked to various brokers over the year and a half and felt great about the team that ultimately ended up introducing me to Telos.
Q: In terms of preparation for sale, how much work was it for you to get the business ready to be sold?
I’ve always kept good corporate hygiene, like good records of financials and invoices. That way it would be easy for someone to walk in the door and work things out. This upfront work made the preparation for sale quite easy. I used a broker for the sale, so most of the work was putting things into the brokers data format versus pulling data or forms that I didn’t already have available.
Q: Any pointers for folks looking to start a process and keeping organized?
Make sure you’re keeping all your files, like product designs or invoices, in a place that’s easy to access. Any numbers that you need to know well to operate your business, you’ll also need at your fingertips when you’re selling the business. Establishing the right metrics in things like marketing and supply chain costs, and then tracking those metrics over time on a routine basis, will be important.
Q: Ultimately, you listed the company for sale. What was it that made Telos the preferred acquirer and the ultimate partner for you?
I was really excited about the process, albeit a bit nervous, but I was excited to talk to smart people who were interested in the business. I realized after a number of conversations how important the personal connection was, and, well, James and Darien smile a lot. Just that first conversation put me at ease. It allowed us to have a very productive and thorough conversation in a short amount of time and cover a lot of ground, because there was that personal comfort. The other aspect was they were genuinely interested and knowledgeable about the business and what it had done so far.
Q: Going into the selling process and the negotiation / migration, was there anything in Telos’ process that made things easy for you or that you thought was well handled?
Off the bat, you had a list of items that you needed, and you took the approach of focusing on the most crucial things without getting into the things that didn’t matter. None of the process felt frivolous or not relevant, so the transfer process was efficient because everything had been well prepared.
Q: Stepping away from us at Telos, do you have any words of wisdom for folks looking to sell or might be on the fence?
If you’ve gone through growth in eCommerce, you realize that growth is expensive. I recommend doing a strong investigation in yourself and in your ability to fund growth – it doesn’t happen without investment into marketing and inventory. So you need to ask yourself if you’re the right person to fund that growth, or if there might be someone more suitable out there to take your business to the next level.
Q: How hard has it been to transition out of the business?
It hasn’t been hard! I no longer do my Sunday report where I look at cash flow statements and all that, which was taking a lot of time away from the family. That’s just one example of things I don’t have to do anymore and it’s freed up a lot of time.
Q: I’m sure you’ll follow along on the sidelines and see how the brand continues to grow.
Q: So what’s next for you?
I’ve been a real estate investor in California, so I’ve been spending more time there and finding interesting investments with great partners. I’m not looking to go straight back into operations though, it will be nice to take a bit of a breath.