Self-Made Tech Guru
Omaha's Very Own Zuckerberg
Tony Valenti remembers his father saying “If you think you can do better, then you should quit and do better.” Tony was in high school, working at a small software business that built websites. He took the advice to heart, put in his notice and started working as a programmer for hire. While working on one of his coding projects, he met someone who was in the niche that he eventually moved into: putting websites onto the internet. Their conversations made him think about the direction he would take.
When he started the business in 2004, he started small: just Tony, his telephone, a computer, all in his basement. Did he think that he would be running a successful business specializing in DNN platforms 10 years later? “Not at all” Tony stated with a serious look on his face. When it started it was something that interested him; he was a student and didn’t need huge profits every year. It was almost a surprise that it did so well. He thought it would be fun running his own business, but over time it just got bigger and bigger.
With growth came the need to bring on employees. In 2007 Tony hired a receptionist to field the calls that came in. He hired more people to help out with the workload. It was a casual work environment, with all the employees actually working out of his home! In 2008, it was time to move to an office space. “All the stereotypes that you would imagine of a tech start up from out of a movie - that really happened.” It was a good place to be.
One of the lessons that he learned as he grew: it is important to have good people. The bottom line is important but it is easy to place too much focus on how much is being spent. Doing that, you may wind up with a lot of turnover and employees that have to be continuously monitored so the work gets done. Tony soon realized that he needed were quality employees he could trust to do their jobs autonomously so that he didn’t have to wear so many hats; and that cost more. “You can pay as little as possible and have more work or pay a little bit more so you don’t have to watch the employees constantly. It is so worth it.”
"You need to start the selling process knowing not only what your asking for but also what you want. Keep your focus on the goal throughout the whole process."
- Ellie Diehm, CFO at Managed.com
About a year ago Tony’s priorities started to change. His personal life was in transition and it drew more of his focus. Being CEO was no longer the most important part of his life. The business was in a good place with solid customers and employees, almost to the place where could start to think about “handing the baton off to someone else”.
Tony and his CFO, Ellie Diehm, reflected on the path that Tony took to get to the sale. In June 2014 Tony wasn’t looking to sell, but was interested in exploring the idea of buying a new business at The Firm Business Brokerage. After looking at what was available he didn’t find a business that was the right fit for him at that time. He did, however, learn about the business sale process and considered the possibility of selling his business. Tony came back to The Firm for his complimentary business valuation and signed his Listing Agreement on September 15, 2014.
Interested parties came forward immediately. The Firm brought 22 qualified Buyers within only 45 days. Out of the 22, 19 of them were out of state Buyers. With 4 nearly full price offers on the table, Tony had some thinking to do, and a big decision to make. This was his business, and he had to feel confident that the next person could run it as well or better than he could. The Buyer that was ultimately chosen was very upfront about the way he did business and the way he planned to run the business, even going so far as to privately fly Tony and Ellie to his offices so they could spend the day with him, look into his corporation and talk to his business partners and employees. This really resonated with Tony, “In the end, I didn’t choose the Buyer with the most money on the table; I chose the one I had the most confidence in and I felt the most comfortable with.”
Aggressive timelines were important to Tony. Ellie was very succinct with the reason, pointing to the old adage, “Time kills all deals”. In fact, a cover story was created to allow for due diligence in efforts to keep the sale confidential during the process. The Buyer’s representative posed as a budget consultant so that he could move freely through the office, review documentation and speak to employees. The plan worked and the process moved forward!
"I feel like this is a reset! After the sale it was like a huge weight had been lifted off my shoulder."
- Tony Valenti
With an aggressive timeline of accepting an Offer on December 5th to a January 9th Closing, there were multiple hurdles to overcome, and there was a lot of work from all parties to get to the finish line. “There is so much involved that it is easy to become overwhelmed. If you want to get it done, both Buyer and Seller need someone on the inside, like Cortney Sells, quarterbacking all the work to push it forward” explains Tony.
The Closing occurred January 9, 2015, less than 4 months from when the Listing Agreement was signed. Ellie will stay on with the new Owners, working with the existing management team as different structures, policies and procedures are put in place. She was involved for seven years as the business grew to where it is today, and now she has the opportunity to see where it goes in the future. The plan of the new owners is to double sales in year 1.
Tony is looking forward to what comes next. “I feel like this is a reset! After the sale it was like a huge weight had been lifted off my shoulders – then every day of transition another layer of weight peels back.” Tony also note, “I am carrying back a percentage of the sale price, so I have a vested interest in the business’s continued success. The Promissory Note was a great option for me because I receive a nice interest rate on a monthly payment over the next several years; and it helps defer my taxes.”
Ellie and Tony are interested to see what the new Owners will do to grow and change the business. Thinking back on the sale experience, Tony can sum it up for others in two sentences: “Make the new owner’s life easy, they are writing you a big check so respect their risk. And use a business brokerage like The Firm, there is no way this would have been completed without their team.”
The Firm Deal Review
Sale Price: $7,827,000
From List to Close: Less than 4 months
Days on the Market: 20 days from listing to close
2013 Gross Sales: $4,788,020
Profit Margin: 58%
Reason for Sale: Divorce
Broker: Cortney Sells