Meet the EC
Guy King and Bevan Clark
Co-Founders of RetailMeNot
Sold to Whaleshark Media in 2010
Guy King and Bevan Clark started RetailMeNot in late 2006 with a simple goal, to build the best coupon site in the world. Some entrepreneurs focus on building the biggest business; their focus was to build the best. They succeeded in doing both.
Most businesses in the sector focus only on providing coupons/deals to consumers in which the company earns affiliate revenue. Guy and Bevan’s strategy was to build a product that was focused on the best interests of the consumer regardless of whether or not they were able to monetize the traffic. This strategy resonated with consumers and proved to be the most successful. RetailMeNot quickly grew into the biggest site in the industry with an avid community of users who regularly contributed high value coupons. For December of 2010, aggregate sales through RetailMeNot totaled $63 million with $17 million in consumer savings.
Guy and Bevan began contemplating an exit strategy in late 2009 and ultimately sold the business to WhaleShark Media (www.whalesharkmedia.com). Led by Cotter Cunningham, the former COO of Bankrate, WhaleShark Media closed the transaction in 2010. Michael Lyon, now a Vista Point Advisors Co-Founder, led the transaction for RetailMeNot while at a previous firm. Today, Guy and Bevan continue to operate several internet businesses as part of Stateless Systems.
When is the right time to sell?
This is a question we are asked a lot. Some entrepreneurs consider a sale because the overall M&A markets are robust or because there is a significant amount of buyer interest in their sector. This was consistent with what was happening in our industry; there were many transactions and the valuations being discussed were attractive. However, for us, we considered a sale because the business had grown very quickly and we knew we were reaching the limits of our skill set. Additionally, we lacked the desire to manage a large corporate organization. We are entrepreneurs at heart and felt that RetailMeNot would be better off in the hands of a large strategic partner that would be better equipped to handle building the infrastructure to support a business with the scale and growth we were achieving. Also, we had other ambitions and ideas that we wanted to explore, and we now have the ability and time to innovate and create.
Why should you hire an advisor?
Your advisor is your partner. As entrepreneurs in an attractive sector, we received significant attention from multiple U.S. based private equity funds. As a result of our conversations with these institutions we received an unsolicited inbound offer from a highly reputable firm. Given that we had an offer in hand and significant investor interest we strongly considered moving forward without hiring an investment bank. In the end however, we were convinced that bringing on a seasoned advisor would be imperative to maximizing valuation, increasing the probability of success and ensuring that all of our interests were met during the process.
There are many pitfalls and traps throughout the M&A process for entrepreneurs; particularly when you are negotiating with private equity firms and corporate development teams that transact these deals for a living. They are highly versed in the structure and terms, which can be onerous to entrepreneurs. Our advisor leveled the playing field and was an ally that fought for our interests, those we actively pursued and those we did not understand. They created a competitive environment and brought multiple serious bidders to the table increasing our options and improving the valuation dramatically from the initial unsolicited offer.
What value did Michael Lyon provide during the process?
Michael was crucial to the success of our transaction, from the beginning to end. We knew from speaking with him early on that he understood our business and how to position it effectively with potential buyers. What surprised us was how aggressively he protected our interests, even those that did not directly impact him. We were very focused on a quick transition post sale and were concerned this would be difficult given the relatively few employees we had. Michael made this a key differentiator in the negotiation process with buyers.
Additionally, not having gone through a sale before we did not know what to expect in terms of how to execute the process including legal requirements, financial projections, interactions with buyers and timeline. Michael did an outstanding job of preparing us for and managing through this stressful and complicated process. He was always available to us 24 hours a day, no matter the time; which was remarkable given the time difference between San Francisco and Australia. He demonstrated the utmost professionalism and a consistent dedication to our deal. Having a trusted advisor makes all the difference.
The above testimonial may not be representative of the experience of other clients and is no guarantee of future performance or success. The above mentioned entrepreneurs are also investors in Vista Point Advisors.