In this episode, Elizabeth Shea sits down with Sean Griffey, co-founder and former CEO of Industry Dive, to discuss his journey of building a bootstrapped media company and navigating two successful exits. Sean shares how he and his co-founders left stable careers to launch niche industry publications at a time when investors were chasing "the next Buzzfeed” and why their contrarian strategy paid off.
He reflects on the differences between partnering with private equity and running a competitive sale process to a strategic buyer. He also touches on the importance of financial transparency and the role of strategic communications in appealing to prospective buyers. This episode is for founders looking to maximize their enterprise value and find a buyer who aligns with their culture and long-term vision.
Connect with Sean on LinkedIn here.
Elizabeth Shea (00:44)
Hello everybody and welcome to Branching Out, a TreeFork Strategies podcast. I am so excited to have Sean Griffey in our office today. We're going to be talking about his journey as an exited founder. Hello Sean, thank you for joining us.
Sean Griffey (00:58)
Thanks for having me. I've been excited to come onto this.
Elizabeth Shea (01:01)
Well, we're really interested to hear your story because you had quite a meteoric rise and success story with the exit of your company. So, Sean joins us as the co-founder and former CEO of Industry Dive, which was a very notable publication that I remember from way back when. I do remember when we did happen to ring the bell at NASDAQ in 2018-2019, something like that. So, you're already starting to celebrate some of your success.
I will turn it over to you just to start at the beginning if you can. Can you tell us a little bit about your story and how you got started?
Sean Griffey (01:37)
Yeah, I've been working in digital media now for almost 20-25 years. And before starting Industry Dive, I was at a company called Fierce Markets which had niche business publications primarily covering the telecom and life science space. And I wasn't the founder of that, but I was part of the first 10 people there, early team. And we grew that business for the founder, sold it to a private equity backed strategic and stayed on and ran it for a number of years. All the while I saw changes in the landscape, opportunities to do something new. And fortunately had two really good coworkers at Fierce Markets. The three of us decided in about 2012 to go off on our own and try to launch something new and different. And so, we left a stable job to move into an old corner market in Adams Morgan and launched Industry Dive.
Elizabeth Shea (02:32)
Oh wow! Well, I remember all the Fierce Publications. So, we thought, “wow, that's a really bold move,” particularly at that time, because you were going to be starting a new media company when everything was going digital. I mean, that's sort of a cool story.
Sean Griffey (02:50)
Yeah, we were a bit contrarian there in that if you looked at digital media at that time, everyone was trying to be BuzzFeed or Upworthy. And it was “how do you do social and how do you do big mass broad publications?” And we launched an electric utility publication and a waste and recycling publication on day one.
So, I always say we mostly bootstrapped the business. We had some angel investors from DC who helped us. Before we launched, we were going to try to raise real money. And we went and talked to folks who invested in media, and they really weren't excited about electric utility publications. They weren't excited about waste and recycling. They were looking for the next Buzzfeed. So, we were accidental bootstrappers in that no one believed in our vision.
Elizabeth Shea (03:33)
I think a lot of the founders on this program have bootstrapped their business and that can be tough. Were you ever lured to try to raise money down the road when perhaps VCs started to pay attention? Because you did grow.
Sean Griffey (03:58)
Yeah, honestly, I think we thought we would at some point. And we went to look and raise money probably about 18 months in. We had some traction at that point, not a ton to be honest, like it took us a number of years. But we got a couple of term sheets back and we looked at them and didn't love the terms, didn't love how they saw the business. And we told ourselves, if we can make it another nine months, these term sheets will look a lot different because we knew we were on the precipice of growing.
And nine months came and the business was generating cash flow, and we just decided we didn't need the money and that we could grow on our own. So, we got very lucky to not raise money. And honestly, in the type of business we were building, in digital media, venture does more harm than good in the sense of venture puts you on a timeline and it takes a while in media to build an audience, right? And that doesn't usually correspond with venture timelines. So, we really got lucky that we built a much better business by bootstrapping.
Elizabeth Shea (05:16)
So that's really interesting from the standpoint of, bootstrapping and then actually turning cashflow positive as I understand at some point. When did you determine that the right thing to do would be to look to exit the business or did you approach it that way? Was it an accidental exit or was it very purposeful?
Sean Griffey (05:33)
Well, it's funny, I always talk about it as almost two exits, right? So about seven years in, we brought in private equity and that was more accidental than intentional. And then three years after that, we sold to a strategic and that was very intentional, very much a driven process. But if you go back before we brought on the private equity partners who bought a majority share of the business at the time, we were growing at a pretty good rate, but still a relatively small business. I think we were a little under 30 million in revenue doing about 25% EBITDA margins.
We started to get inbound interest from other media companies, from strategics in the space. And we had a couple offers in front of us. We didn't really love them for a number of different reasons. Either didn't think it was the right home or didn't think it made strategic sense or just honestly didn't like the valuations of some of them. So, we were planning to on our own for a lot longer when Falfurious Capital, the private equity company that we partnered with, sort of knocked on the door.
For the first time, we had a financial person share a vision and talk about our business the way we talked about our business and share what they thought the next steps would be, which were our next steps. It was to the point where I had coffee with them the first time and I went back and talked to my co-founders and said, “hey, have we been sharing any of these slide decks at conferences or anything?” I thought these guys were feeding back our language to us to sort of flatter us into liking them. And it turns out we were always contrarians until we met them. That was the first time we found someone that shared the vision.
Elizabeth Shea (07:24)
That's so important. A lot of our listeners are contemplating whether or not to go the strategic route or more of a financial transaction. It sounds like you had a very positive experience. Can you talk about how important that is to be thinking about the fit or the shared vision? What were the tenets that you looked at before you made that decision?
Sean Griffey (07:46)
Well, the funniest thing about before we partnered with Falfurious is we didn't run a process, right? We didn’t run a competitive process where we went to markets and got bids and hired a banker the first time. And I wasn't sure that we would ever do that. I thought when the time comes, we would go find out the real market for us.
But before we’d done that, I had been spending a lot of time gauging the market, talking to different people, understanding our valuation, what we thought a fair valuation was . . . And when Falfurious came, we liked them immediately, not just from the standpoint of “they get our business.” But culturally, they might be the smartest people in the room, but they never act like it, right? And there's a lot of private equity people that come in and feel like they're smarter than you and that they know your business and industry more than you and that they can run the business. And we really just loved the approach that Falfurious had, and we knew it would be a cultural fit. The hardest part though was, is it a fair offer? Without getting real market feedback, we didn't know if this would be fair offer.
So, we talked to a number of folks about the offer, advisors and different things. And there was a standpoint of like, well, you might be able to get a couple million more if you go to market, but you would have to hire a bunch of advisors who would take a cut of that couple million more. You'd have to run a process that's going to be really time consuming and draining. And then you might end up with a buyer that will give you say five or six million dollars more, but you may hate them.
So, then you're have this real, sort of moral view of like, how much is it worth to sell the business to someone you don't like? We at the time just decided, “let's not go through any of that.” We've got the perfect partner in front of us. We've got more than a fair offer. There might be someone willing to write a crazier check, but not materially crazier. And we're going to end up in a home we don't like.
So, we ended up with Falfurious mostly for cultural reasons. I see now other co-founders that end up taking the biggest check and the wrong home. And I see how miserable they are over time. And I'm very grateful to the people who pushed us to go with the right home.
Elizabeth Shea (10:19)
Yeah, you sought out the right thing. I think that's one thing that if a founder didn't have that experience, they've shared on this show that they wish they had because the culture is super important, especially because part of your earn-out is probably contingent upon you staying and being successful. So, you kind of want to get along with everybody and not have it be as stressful.
So, how did you educate yourself? When you said you looked at market valuations, what process did you go through? Did you talk to folks? Did you meet with anybody?
Sean Griffey (10:48)
Yeah, I think the best thing . . . and I tell people all the time . . . there are likely boutique investment banks in your industry. And the bankers there want to get to know you before you're selling the business. They want to build a relationship so that when it's time for you to sell the business, they want you to use them. So, they're very generous with their time. So, I would go to some boutique investment bankers in New York, some in DC, and some in Chicago. And I talked to them about my business and I'd get their advice. What I wanted to know was like, who would be interested in us and what would we be worth to them?
Then more importantly, I think one of the things that a lot of people don't think about more is — what are people not going to like about my business? We spent real time asking folks, “what are people going to hate about us?” So, then we could decide if we want to do something about it or is that something that we like about us and it's just going to be a feature of the business whether they like it or not. There are some things that we really thought of and intentionally tried to address, but also intentionally ignored.
Elizabeth Shea (12:08)
Right, right. There are those standard things that companies look for, but to the extent that it’s defensible and you can share this is why you’re not changing these things, I think that makes a lot of sense.
So, can you take us to the second part of your acquisition track? You said that you then had another exit to a strategic and you drove a process that time. Can you talk about what that felt like and how it was different from the first experience?
Sean Griffey (12:27)
It was incredibly draining, exhilarating, with ups and downs. When I have a friend who's a founder going through a sale process, I always give them the same gift, which was I have the shaving cream that on the bottom of the bottle, the shaving cream, it says “90-day supply.” I remember going through our process. At one point we were supposed to be done in 60 days, and I'm like “I'll be done before the shaving cream's over.” You just got to remember; this is going to end. But you know, the process is challenging. You've got to really be ready for it. But it was exhilarating at the same time.
Elizabeth Shea (13:13)
So, you had a really good experience in your first one and then you went to the second acquisition by a strategic buyer. And were the terms dramatically different from the first one? I mean, how did you make the decision to actually go with the company that selected you?
Sean Griffey (13:40)
Yeah, I mean, it was an entirely different process in the sense of we hired a banker and we did the road show where we put together presentations and went . . . We actually had 18 bids from companies in the start of it. We picked five to kind of go through the whole process. And we were sort of simultaneously doing deep due diligence with those five to get to the finish line. And all the while, we're selling ourselves, but the bankers are sort of trying to drive competition among them to get the highest valuation.
It was a mix of private equity and strategics that came in. It would be trading our one private equity for the next round of private equity or ending up with a strategic, which is what we ended up doing with a strategic. But you can imagine five people going through real due diligence. There's a lot of people digging around and a lot of questions about the business, a lot of time building models, answering questions, some of which you think are completely irrelevant to your business and some of which are spot on.
Elizabeth Shea (14:53)
Totally. I remember just thinking that when I went through the process, I just felt like I had my head in spreadsheets all the time. It's hard because you can't take your eye off the business either. So, looking back now, so you've been out for what, a year now? What would you have done differently throughout either one of those processes? What advice can you share that might help someone that's looking to go through the process besides buying a can of shaving cream and maybe buying two or three, buying them in bulk? Hahaha.
Sean Griffey (15:21)
I think there's a couple things that I would tell people. One, you're not too small to get a financial audit and to build a relationship with an audit firm and get your books in order. Because you don't know when the right buyer is going to come and you don't want to be . . . one of the things that drives valuation is the buyer thinks you have good control over your business and they think it's a well-run business. Nothing says you're not then the numbers not being locked down.
I know there's a lot of people that will say, “I've got a good controller. I don't need a CFO because we're years away. So, I'm not going to go through the expense and trouble of doing a full audit or any of that.” And I would say, if you're planning ahead, start now so you have a relationship with an audit firm that can come in and you can produce clean audits right away. More importantly, a big buyer is going to make you do what they call quality of earnings sort of piece. It's almost like a new audit. But if you've gone through the audit process, that's going to be really easy for them. If you're starting from scratch, it's going to take a long time. So those types of things to be ready to sell, I think are really important to make this easy but also to get the most valuation.
I think the other thing that I appreciated much more the second time that I didn't before was . . . from a marketing standpoint, we spend a lot of time marketing for our customers, right? Like that's the point. We're doing marketing for our customers so that they buy from us and drive revenue. There is a whole marketing component of marketing yourself and your business to potential buyers that takes years. And you need to get in front of people at conferences and get speaking spots on panels at conferences or have a presence somewhere so that they think your business is smart and that there's something dynamic there. I didn't put a lot of time into that early on. I was just heads down and growing the business, but that's part of the job. If you're thinking about building enterprise value, building the reputation of your business among potential buyers is part of the job. So, you need to think about doing those types of things.
Elizabeth Shea (17:53)
I have to say full disclosure, I did not ask you to say that. But that is exactly the purpose of Treefork! So, I couldn't have said it better myself so thank you!
Sean Griffey (17:55)
I mean, it's true though, right? It makes so much sense. Everyone would stop and say, “of course we're to going to market ourselves, like what business doesn't market itself?” But you, you know, the biggest buyer you have is the one who's going to look at you, not someone who's going to buy your product, right? Someone's going to buy the company. You've got to market to them as well.
Elizabeth Shea (18:20)
Completely. I mean, we talk about the importance of executive visibility to your point, like speaking at a conference and looking smart, or maybe looking bigger or positioning yourself . . .
Sean Griffey (18:30)
You know what, I'll say another thing just about my one philosophy that I don't think people do. Everyone is very shy about sharing their numbers publicly. The view is like — we don't want to tell people things are going well or going bad. But when you go to sell, everyone's going to see all of your numbers. And one of the things that we did was if we went on a podcast, we'll just talk about our financials. We'll talk about our numbers. We'll talk about our revenue at the time. We were very open about it.
And one of the things that did was people saw the growth. They saw the momentum along the whole way. We weren't saying like, “we're profitable.” We we're saying, “here's how profitable we were and here's how much we're growing.” That really changed the perception of us among the industry by just being open with the numbers.
And I'm not sure why people don't share it because like as soon as you go in a process everyone's going to see them. So, might as well tell them six months in advance, a year in advance, two years in advance. They're going to see them eventually.
Elizabeth Shea (19:31)
Right, right, need to be transparent. Absolutely. mean, I've never really understood why some companies want to inflate their numbers. I mean, the numbers are the numbers!
So, just out of curiosity, did you share your numbers with your team? And did you share with your team that you were looking to go to market?
Sean Griffey (19:53)
We always shared the numbers with the team and the growth and the revenue numbers. I think that was very important for us kind of culturally of the business we were and the transparency of it. We didn't say when we were going to market to be honest. We kept that. We didn't want it to be a distraction.
The first time, we weren't actually “going to market” since someone kind of approached us, but even when we had an offer, we sort of kept it tight on where we were because these things often fall apart, you know? So, we didn’t want people's emotions to get in this like excited, worried, excited, disappointed . . . We just kept it to ourselves until the deal closed.
Elizabeth Shea (20:36)
Yeah, that's very common and there are different schools of thought on that. I was curious how you'd manage that transition just because a lot of people . . . particularly if you're private equity backed, typically people will understand that eventually there's going to be another transition.
Sean Griffey (20:50)
Right, it’s coming. I mean, the second you bring in financial money, everyone knows that there's a clock on you, right? Like, investors want their return.
Elizabeth Shea (20:56)
Yeah, exactly. So, any other pieces of advice that you might want to share . . . I think you had said you had two or three. Anything else that you'd like to share in terms of the process or what it meant to you personally as a CEO and a person with a family and an outside life and all that good stuff?
Sean Griffey (21:15)
Listen, there's all kinds of things that we did right and wrong. I look back and two things on advisors, right? One of my regrets is like we had some advisors in terms of accountants and lawyers and everything that were with us in the early days. Then in my perception, it's like the deal got “too big” and we wanted to graduate to bigger counsel. And in some ways, I think that was a mistake. We had good advisors and they were small, but they knew our business really well and they were connected to us. We sort of said “thank you” and hired bigger firms to do all this work with us. And I regret that. Like we didn't need to do that.
I think the other thing is . . . particularly when we went through the second process, we had one company who had been circling around us for a number of years say, “don't even worry about it. We're going to buy you and we're going to preempt this whole process and we're going to put a number so big that we're going to shut this whole thing down.” And it was someone who's got a reputation for writing big numbers and someone we liked and I was excited by it. So, I went to the investment bankers and said, “listen, these guys are going to take this business down and this is going to be a good home for us.” And they wouldn't let us stop the rest of the process. They said, “this is all talk until the deal closes and we can go down this path, and we certainly want to see them. But we're not going to stop everyone else. We're not gonna stop all of this work.”
And we started going down the path with this company that had a lot of exposure in Germany. It was an international business. And this was early 2022 when Russia invaded Ukraine. Suddenly, this business that said, “we're going to take you down and we're going to write the biggest check” said, “we're not writing any checks. We're afraid of what's going to happen in the market in Germany. We're sorry, but we're out.” And had I been in charge, I would have been starting over from that standpoint. I would have put all of my eggs in this basket because it was like a good home and a good buyer. And our advisors said, “we're not doing that.”
So, we were very lucky that we had good advisors who wouldn't allow that to happen because we just kept on trucking through the process when they left. One of the things I say is that buyers come and go, and it's not a reflection necessarily on you or your business why they say yes or no. It's like they've got their own things going on that change the mind. But we got lucky there.
Elizabeth Shea (24:08)
Right. Wow. That is a great story. Thank you for sharing that. If you had gone with that one person or that one company that could have been like . . . it's exhausting too to go through that process and have to start over again!
So, you and your co-founders, everyone has since departed from the company. Is that the case?
Sean Griffey (24:19)
Exactly. We've all kind of gone our own separate ways, but still regularly have lunch together. It's strange to work with some people for a couple of decades and see them every day and then don't see them. But I think we're very lucky in that three co-founders — Ryan Wilmson, Eli Dickinson, and myself — there were certainly a lot of ups and downs in the businesses, but I can't remember a time we ever had a huge knockdown drag out fight. I think the one great thing is we've never questioned each other's intentions or integrity. So, I'm kind of just the luckiest person in terms of picking co-founders, and I wouldn't be here without them.
Elizabeth Shea (25:10)
No, that's terrific. And thanks for the hat tip to them because I do remember meeting them as well when we rang the bell at Nasdaq. So, what's next for you? I mean, you're young and active. What's next for you? Do you know?
Sean Griffey (25:22)
Well, thanks for saying that. I wake up in the morning, and my back doesn't say that I'm young, but it's nice to be perceived that way. I told myself I'd say no to everything for a while and then see how ambitious I still want to be. It's been about a year. I've joined a number of boards. I'm still on the board of the business that bought mine. So that's one.
And then private equity backed companies that were like Industry Dive when we joined private equity, we joined some of their boards. And I'm enjoying that. But one thing I find about being a board member is you can enjoy when the company is doing well, but you don't really own any of this success. So, it's not as satisfying as doing something yourself and having real wins that you had a direct hand on. I think at some point, I'll be looking for the next big thing to get back to competing. I like competing, I like operating, I like winning in the marketplace. And I think at some point I'll probably start looking for that.
Elizabeth Shea (26:23)
I was going to ask if you miss it at all. Do you miss the pace? Do you miss the business? Was there any transition that was tough for you?
Sean Griffey (26:31)
I miss a lot of the people. I look back at some weekly meetings and I'm like, “gosh, I really liked the people in that meeting.” And that was the one meeting on my calendar that I never minded. And there's sometimes when I got the opportunity to go deep in a spreadsheet or get my hands in audience data. I loved all of that. I’ve been gone a year, and a full budgeting season came and went, and I didn't miss that at all. I didn't miss being part of a publicly traded UK company and having a budget season that starts in July and goes for four months. So, there's good things that you miss and things that I'm happy to be done with.
Elizabeth Shea (27:01)
That's excellent. All right, well, thank you so much for joining us today. It's been a great story, and you've had two very successful outcomes, which is rare. So, congratulations and hats off to you. Thank you for joining us today, Sean.
Sean Griffey (27:31)
Thanks, Elizabeth.