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In the world of business, not all deals are what they see.
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Fortunes rise, empires crumble, all with a stroke of a pen.
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Mergers, acquisitions, hostile takeovers.
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Welcome to Mergers She Wrote, where we examine strategies and stories behind the biggest deals in business.
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Because in MA, the real risks are the ones you don't take.
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Welcome back to another episode of Mergers She Wrote.
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I'm Paloma Goggins, your host and the owner of Nocturnal Legal.
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Today I welcome Carol.
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Am I saying Tice?
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Is it Tice?
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Carol Tice to my episode.
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Thank you so much, Carol, for joining me from the road.
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My pleasure.
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And so, Carol's story today, what I'm going to talk to you about is how she built a community and ultimately sold that community and her back, uh, her background as a writer and a reporter.
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And so, Carol, I want to dive right in.
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Tell me a little bit about your background, how you went from writer to community owner, and and then we'll dive in a little bit about how you went to the sale process.
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I kind of I was a songwriter once upon a time, and I wrote an essay that won a contest and kind of fell into the world of journalism and reporting.
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And I liked it better because I did not have to worry whether the drummer was going to take psychedelic mushrooms and the overnight party bus to Vegas instead of showing up at the gig.
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Like I was in complete control of my product.
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I found that very exciting.
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And um didn't have to hang around smoky bars at two in the morning.
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So I I feel like I was kind of the last person they let in the door without a J School degree.
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And I wrote for the Alternative Press, and then I wrote for a business trade pub based in New York, covering the West Coast, and then I wanted to get off the road because I had a little child, and I wrote for the Puget Sound Business Journal in Seattle, which is where we're based.
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This obviously not Seattle.
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They're having a 15-inch of rain atmospheric river right now, and we are happy to be in the RV out in Courtside, Arizona.
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Oh, I am sure.
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So I, because I had a background as a legal secretary, I was kind of the person that people threw a lot of SEC document-related stories, IPOs, mergers and acquisitions.
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So pretty much from the minute I got there, I was diving into public documents about transactions going on, spAC deals, all kinds of um, you know, private equity funding and learning about that world.
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And I loved the people I was working with, loved my editors, and I thought I would work there forever.
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And I had no plans to like go into business myself until um those editors left and a new team came in and the party was totally over.
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And I was the most highly paid uh reporter on staff, and then in 2005, I believe, uh I was uh let go.
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And I thought I would just freelance write until I found another job, you know.
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Um, I had freelanced before of my jobs, but I replaced my income pretty quickly, and then during the eight-09 downturn, I ramped it to six figures, and I gradually became aware that that was not the experience a lot of other writers were having.
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They during this time period, they thought the macroeconomic condition made it impossible for them to make a good living, and they were making$5 an article on content mills, and I saw that like most freelance writers did not have the kind of business discipline that I sort of instinctively brought to my freelancing business because I'd been hanging around business people, and that I could kind of offer that.
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And I started a blog.
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I was super excited.
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There was a uh new way of communicating where I didn't have an editor and I had the publish button.
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And I just started writing about how I was doing what I was doing, how to make a good living, how to find better clients, get a raise.
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And I thought maybe I'd write a book, you know, and it would sell a million copies and I'd be rich.
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That was some I had very vague, you know, business ideas of how to monetize the blog.
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I knew that I didn't want to slap ads all over it.
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My all of my mentors were like, don't do that.
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And um, that really erodes your authority.
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And there are better ways to earn.
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I had done paid webinars, I'd done this and that.
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And then I joined a paid community, I think it was 20 bucks a month for bloggers to learn how to make my blog better, you know, and be more successful.
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And as soon as I got in it, I went, This is amazing.
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I love it, I'm learning so much.
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The look at this course stuff, and being able to talk to other people who are doing this is amazing.
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And there's nothing like this for freelance writers, and there really kind of should be there because and I knew that because I was getting emails all the time, you know, oh my god, Carol, I have a meeting tomorrow and I don't know what to say, and I don't know what to bid, and what should I do?
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And um I, you know, was not interested in signing up to be the 24-7 Free Dear Abbey of freelance writing.
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And but there was clearly a need for information, and I felt like the community platform was the way to deliver it because writers are broke.
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Um, you know, selling them a$10,000 coaching package was not gonna be very easy.
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And um I loved the I loved the concept of using the power of low ticket to drive mass adoption to be able to help many, many people, not like I get, you know, eight coaching clients this year.
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I really wanted to change the whole industry.
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I was kind of on a mission to like shut down writer scams and uh fight for fair pay, make more writers understand their value, you know.
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So I had kind of a a like crusader mission, you know, and I wanted to be paid for my time.
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And I just started talking to my blog audience about I'm thinking about building this, you know, could you take this survey about what you would like in a community?
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And that's how I built Freelance Writers Den and opened it.
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And it pretty I had maybe 750 blog subscribers when I launched it.
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And it ramped to 500 members pretty quickly.
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And uh then hit a wall, ended up getting over that, going to a thousand.
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At that point, I think I started to get approached by uh by business brokers and buyers, and started to become aware that what I had was kind of a saleable asset.
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Well, and so your background is in MA reporting, which you talked about, like using you know seeing the SEC documents and all that.
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And so did that play a factor in how you built your community or how you thought about potentially selling your community at some point?
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I think I had a dim sense that, you know, it was a saleable asset.
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For a long time, I wasn't thinking about selling it.
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Um, you know, I was just still building and building it up and um it was providing a great lifestyle.
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It was a lot of work to do.
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I think a lot of people who found paid communities, like 18 months later, they're out.
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They've sold it off, you know.
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And I did it for over a decade.
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So um I I was kind of hooked on how gratifying it is to change so many lives and impact so many people.
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And um just, I don't know, you know, I think there's a certain type of person who really has a big heart for helping other people succeed.
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And if you are that kind of person, community is such a beautiful business model to work in.
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And, you know, in the past year we actually went to Europe for a month, and I got to talk with and meet with several of my den members, and you know, one of them lives in Paris now with her daughter.
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Her husband actually died very shortly after her daughter was born, uh, very young.
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And she was able to build an a fantastic career for herself and live in a great city, and you know, and uh, you know, literally it was said, you changed my life.
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You know, it just it's hard to walk away from it.
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It's so it's so fulfilling.
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And I I was earning an income I never could have imagined as a freelance writer, but eventually I came to feel a little tired, um, to feel a sense of an ending.
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My kids were getting to the end of high school.
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I kind of felt like I had taught everything I knew was a course in was somewhere in the materials.
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Um, and I had this vision maybe I'd retire and we we'd sell the five-bedroom house on Lake Washington in Seattle that we had for the kid years and downsize and you know, and I'd kind of be done.
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But I flunked retirement partly because kids continued to bounce back.
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We have two with some special needs, and they're sort of slower launchers than maybe others.
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And um we had bought the RV and done a tryout trip.
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We liked it.
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We kind of didn't know where we wanted to retire to.
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And at the same time that's going on, um, you know, I am hearing from brokers and I'm hearing from kind of prospective buyers, you know.
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And I started to get at least mildly curious and to say, yeah, why don't you send me over your run sheet of what all you ask?
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Uh, uh, so I can start learning about what it is you want to know about me.
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And I learned that I needed to professionalize the business in some important ways, um, like monthly PLs, which I wasn't doing.
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Uh, you know, I was doing my taxes once a year and going, this is awesome.
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I'm have a great lifestyle, you know.
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I have more, I'm making, you know, double six figures in good years, and I'm I'm very happy, and there's clearly profit in it for me.
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I had a team of 10.
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I was paying them.
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Just to go back to the brokers approaching you and you realizing that you had a saleable business.
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Did you have multiple people that came to the forefront that were looking?
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Like, did you have bidding wars, or was it more like you had a couple of people show up and you're like, oh, actually I I can make a go of this?
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And that's when the wheels started turning that you could maybe get your house in order and then make it a true sale.
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Well, a couple of years before I sold, I started, I hired accountants, started doing monthly PL, started thinking through taking myself out of the all the branding.
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There was like a little cartoon carol me that was part of my blog branding.
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And to me, it the community and the blog were kind of a package.
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And so, you know, I had started making some moves that I knew would position it better.
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I also did$10,000 of business consulting about how to go from a thousand members to$1,500 because I had talked to brokers enough to understand my multiple, my sale multiple, and I could see I would need to get to$1,500 for it to be a sale number that I would feel like it makes sense to sell.
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That would be enough of a payday, and I'd feel like this is good.
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Why was$1,500 like a marker, just out of curiosity?
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Just uh it's about a three and a half X, three X kind of multiple, and so 1,500 members at$25 a month, plus some course upsells and things that that was gonna be the number that to me was like, okay, I could go have a great life with this exit.
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Yeah.
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Um, I had put away quite a lot of money in the course at running the business, but you know, I I was looking for a real exit.
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What tipped it over into okay, let's actually do try and do this, is that I met a broker who I thought had a deep understanding of the online business space.
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They only did digital business, had some exits I kind of knew about as I recall, and I just thought they could sell it, you know, and they had a large network of you know, people who buy and sell business, they seemed to have the connections and be positioned to actually seriously sell it, not just some random online marketplace, you know, like as you know, there's mu many of these, and all the businesses seem to be like say for sale for about 50 grand or something, like it's all really tiny money.
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And so I felt like I I trusted them enough to hand them.
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I think it was 12 grand up front, you know, whatever the that was a big thing to me to just take that flyer and you're not getting that money back, and um I uh yeah, and then we started kind of engaging in the process.
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I wish I could say I ended up in a business bidding war, and I maybe could have if I'd wanted to have more patience with the process.
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But um, this was the depths of COVID winter, the first one.
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Um, so we started the process, maybe it was already COVID, maybe spring, just when it was just starting to happen, and you're we were still thinking, well, I'll stay home for six weeks and then it'll be over, you know, just really early.
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And so did COVID negatively impact or positively impact your deal?
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Hmm.
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I don't know.
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I have nothing to compare it with, but that's an interesting question.
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Um, I did end up selling to people I never was able to be in a room with because of COVID.
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And I don't know that that would have changed much of anything, but we had nibbles from a few people, and then we had one very live lead where they were very excited about the company, and we had a nibble from Writer's Digest, I think.
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And but they were like, uh, this is like November.
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And they were like, We're really busy and we want to look at it in January, maybe.
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And I was like, Well, I don't want to sit around for like three more months waiting for to see if you maybe want to get involved in this.
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Um, because I have, you know, a a fish on the hook here.
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And um, so we kind of rolled along and it was super stressful.
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You know, you remember we were all like totally isolating, and you know, every day I'm being asked a new question I don't know the answer to in due diligence.
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You know, I'm doing the two full-time jobs where you're running the company and making sure sales don't go down and the numbers continue to look great, and you have the full-time job of selling the business.
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And um, we had a guest unit in the basement of our house, and I actually like ran away from home.
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And there was a lot of sort of family teenage drama stuff going on, and I was like, I cannot deal with any of your stuff now.
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I am going to go down there and buy myself some frozen food, put it in the freezer and of the fridge downstairs, and I will see you when this is over.
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And like, really, I barely said hello to them for a couple of months.
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Just, I don't know if that was like harsh or but that was what I needed to do because my head was blowing off, you know.
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I mean, I had a team, I had a lawyer, I had the people around me, but s these were uh we weren't some of these metrics we were tracking, but a lot of them we weren't.
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What's the lifetime value of one of your members?
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I don't know, you know.
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I just it makes money, you know.
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Like I I I just I I was I was a word person, a writing person, not a numbers person.
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And um I wasn't I didn't come out of sales, which many people in online business have a marketing background.
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I came out of journalism.
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So I wasn't one of these people of like, oh, if a thousand people go in the funnel, the conversion rate is X this, and you know, they've got all these metrics at their fingertips.
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I did not have these things, so they all had to be hurriedly created during due diligence.
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And we had to create an operations manual.
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We had some things documented, but it really needed to be pulled together.
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It was a lot.
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Well, I was gonna say I've worked with plenty of clients that have had that same experience where they haven't done any of the legwork up front.
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And so when they're going to actually sell a business, they're realizing they have to do that double duty where they're operating their business, running it, you know, in the thick of just daily operations, but also preparing all the diligence and everything else.
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And you get to a point where you're like, I can't, you know, something is faltering, right?
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And a lot of times people realize that they've kind of neglected, I would say, their business in the process because their full attention is required more so on the actual diligence or like making the deal happen.
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So I I understand completely where you're coming from on that piece.
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Yeah.
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Fortunately, I had a staff of 10, so I had that going for me.
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And I brought one admin kind of into my confidence about it eventually, because like I was asking for so many word numbers.
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Eventually I just felt like I'm exploring.
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I finally said I'm exploring selling this, you know, which was what I was doing in my mind.
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Um, you know, not like, hey, I'm selling this off, you're all out of a job, you know.
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But um, and actually that one admin still works for them five years later.
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She is she ended up being retained, so but she was off digging up numbers and stuff, and then we hit like a crisis point because they dug into my accountants' PLs, and what we learned is that my accountants were kind of incompetent and their numbers were crap, and it all had to be redone, and the business got devalued, and that was the like dun dun dun, you know, just drama cliffhanger, you know, moment where I had to decide if I still wanted to do it.
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So when you say that the devaluation occurred, like, and obviously having good PLs, right, is is critical to this whole process.
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But was the devaluation something that you kind of you got to a place where you're like, okay, this is not financially what I thought it was going to be because of the devaluation?
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And then I guess what did you go through mentally in this process of like, okay, I'm gonna still proceed, or like at what point does this still make sense?
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Yeah, so I liken this a lot to when we were adopting the first of our two adopted kids.
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Like we met a birth mom, she liked us, and we uh she was about maybe seven months pregnant, and then we went through the 60 days of um under Washington Law, they can change their mind at any point after the baby's born for until it's finalized, you know.
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And you're just kind of riding this roller coaster hoping you're gonna get a baby.
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And towards the end, before the ba before our son Eileen was born, we looked at each other and said, if this doesn't work out, we're not doing this again.
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Because no one can go through this amount of stress.
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Like it's just so in, you know, people who tend to be relinquishing a baby have chaotic lives, and there's a lot happening.
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And we were just like, yeah, this is a one-shot.
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And I kind of started to feel the same way.
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And maybe COVID was a factor in that.
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Maybe I would have pulled it back and just said, yeah, let's keep looking for buyers.
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And maybe writers digest would have paid more.
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Maybe I would have cleaned up my numbers better.
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Maybe I would have ended up with more money.
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Um, but I was so far down the stress rabbit hole of it that I kind of made my piece with a 200 grand less number.
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And I just felt like I can't go through, I can't start over doing this with another buyer.
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Like I maybe I'm just not even selling it, you know, if I don't do this.
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And I feel like I want to sell it.
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And maybe the stress of being in that first winter of COVID where there was just no shots yet, and so much uncertainty.
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And as someone who almost died of a severe asthma attack in my past in my 30s, I felt like this thing was coming for me.
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Like it had my number on it, you know?
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Um, I felt very afraid of getting COVID and thankfully did not until after I think I was vaccinated.
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But um, you know, there was a lot of stress and fears just sort of in the air.
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And I felt like I wanted to be able to not to take a break, to be done, you know, kind of working this hard and to have that payday.
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I there was money on the table.
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You know, I don't know, you don't know when you have a buyer if you will ever have another buyer.
00:22:08.319 --> 00:22:12.880
You know, we all know how many businesses do not ever successfully exit.
00:22:13.039 --> 00:22:15.200
It's most of them, you know.
00:22:15.759 --> 00:22:22.160
And I had watched, I had watched a friend of mine who had a bigger blog than I did for freelance writing just shut the doors.
00:22:22.400 --> 00:22:27.680
Looking back, what do you wish you knew about first-time exits that no one told you about?
00:22:27.839 --> 00:22:33.200
Obviously, in light of like the PL stuff and the the revaluation, obviously that plays a role in it too.
00:22:33.279 --> 00:22:36.720
But is there anything else from a first-time exit that you wish you knew?
00:22:37.039 --> 00:22:39.920
Just be documenting, documenting, documenting.
00:22:40.079 --> 00:22:41.920
Know every possible metric.
00:22:42.240 --> 00:22:44.079
Have an operations manual.
00:22:44.240 --> 00:22:48.240
You think it's all cash and it's you you think you've kind of got it written down.
00:22:48.880 --> 00:22:56.000
Really be formal about your processes and who does what job descriptions for all your people.
00:22:56.160 --> 00:23:18.960
You know, you'll just save yourself so much stress and anxiety in the process if you're more ready to go, you know, and yeah, look at all the stats that buyers like to have and um think about cut getting those tracking because they'd like to see, you know, 18 months of them, not just, you know, the three months you're doing this deal.
00:23:19.599 --> 00:23:22.640
Um yeah, I mean, understand your business better.
00:23:22.799 --> 00:23:29.759
The thing I did get a ha a hang of is um focusing the business.
00:23:29.839 --> 00:23:33.279
This is the process of going from a thousand to fifteen hundred members.
00:23:33.599 --> 00:23:37.440
Over the years I had gotten kind of diverse.
00:23:37.599 --> 00:23:53.759
I had a co LLC with someone else over here, and I had a coaching program, and that first round with my business consultant was like, if you're thinking about buying, uh selling, these don't matter, these aren't part of the sale.
00:23:54.000 --> 00:23:59.279
So get rid of them and just all roads lead to your community, and that's how we drove it up.
00:23:59.440 --> 00:24:05.359
So you have to look at it as like what of this survives your departure?
00:24:05.599 --> 00:24:08.480
And that is the only part the buyer cares about.
00:24:08.720 --> 00:24:15.519
Make that part as great looking, uh drive that bit part of the business up as much as you can.
00:24:15.680 --> 00:24:16.880
That's what's selling.
00:24:17.039 --> 00:24:26.160
Well, and I was gonna say, you mentioned having KPIs and like them being really fascinated with like what was the lifetime value of this member and some of these other nuances.
00:24:26.319 --> 00:24:30.880
Like, I think many business owners don't think about that in their daily operations, right?
00:24:30.960 --> 00:24:40.720
As like, okay, I have maybe a basic PL or basic balance sheet, but I don't, I also don't have this kind of big picture financial perspective.
00:24:40.880 --> 00:24:52.079
I mean, besides the lifetime value of a community member, were they looking at any other KPIs that surprised you, or was there anything else they asked you that you were like, oh wow, I hadn't thought about that before?
00:24:52.400 --> 00:24:54.960
Oh, every day it was a new one.
00:24:55.200 --> 00:24:58.799
You know, every day of like 90 days of due diligence.
00:24:59.039 --> 00:25:02.720
You know, how many emails do you uh send in a campaign?
00:25:02.960 --> 00:25:04.079
How long is a campaign?
00:25:04.240 --> 00:25:07.279
How we were not always not always open.
00:25:07.519 --> 00:25:09.200
Community, how often are you open?
00:25:09.279 --> 00:25:11.519
How long can I see a year's worth of campaigns?
00:25:11.680 --> 00:25:12.960
Go dig up those emails.
00:25:13.200 --> 00:25:23.119
You know, just they, you know, the buyer's job is to poke around your business and ask as many questions, just keep asking questions until you say no to learn as much about the business as they can.
00:25:23.200 --> 00:25:24.559
So that's what they're doing.
00:25:24.720 --> 00:25:32.880
And your your job is to decide when you're done answering, you know, as the seller, you know, like enough, you know, you know enough.
00:25:33.039 --> 00:25:36.160
I think I feel I've told you what I'm going to tell you, you know.
00:25:36.240 --> 00:25:40.240
And I definitely we hit that point where we were like, Enough is enough.
00:25:40.480 --> 00:25:42.559
Yeah, this is what I'm I'm doing.
00:25:42.720 --> 00:25:43.680
Do you want to buy it or not?
00:25:43.839 --> 00:25:44.880
Well, I think it's fascinating.
00:25:44.960 --> 00:25:58.720
They wanted you to drag, you know, drug dug up like old emails and like pull things up that like arguably as a business owner, you aren't necessarily archiving your your old emails.
00:25:58.799 --> 00:26:00.400
I mean, perhaps as like a good practice.
00:26:00.720 --> 00:26:01.359
Well, I was.
00:26:01.599 --> 00:26:03.200
I mean, they're in a CRM.
00:26:03.359 --> 00:26:09.920
They definitely were still around because we would crib from them for new campaigns, and that stuff still existed.
