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Susan Apgood Contact Information

LinkedIn: https://www.linkedin.com/in/susanapgood/

Email: apgood@american.edu

Elizabeth Shea (00:45)

Hello everybody and welcome to Branching Out. This is a podcast dedicated to talking to former business owners and CEOs who have recently exited their business or within the last five to 10 years. So, I am very excited to have Susan Apgood in the studio today. She joins us as the former CEO of News Generation who sold in 2020. Welcome to the studio, Susan.

Susan Apgood (01:05)

Thank you so much, Elizabeth. I'm excited to be here.

Elizabeth Shea (01:08)

Yes, well, I know we spoke shortly after your sale, after your transaction, and we shared a lot of things. It was the middle of COVID. It was a good conversation. So, we're really here to talk today about some of the lessons that you learned in your journey. I want to hear more about how you got started and what made you decide to exit at some point, and then what happened post-transaction. So, let's just start by kicking it over to you and you can tell us a little bit more about News Generation. You started in 1997 and where you went from there.

Susan Apgood (01:33)

Yeah, I was working on Capitol Hill and decided to get my MBA after I graduated from college. As soon as I finished my MBA, I had been working for a PR services firm that did media relations work. And one of my clients, who was Microsoft, said, you should think about starting your own agency. The company I was working for at the time, great company, but had some financial planning issues.

So, like a good business student, I figured out how to write a strong business plan — it was very entrepreneurial — and I sent my mom the business plan with a bottom-line number that I needed to run the business for 90 days. It was somewhere in the neighborhood of $15,000 and she sent me a check the next day with a little note that just said, “go for it” on the memo line.

Elizabeth Shea (02:29)

Wow!

Susan Apgood (02:36)

So, very fortunate to be able to start the company with that backing. I hadn't yet met my husband, didn't have kids, owned a condo, was able to defer my loans because from school, because there was that grace period after graduation. So, I went for it and started this company in August of 1997 and grew it for 20 years.

At that 20-year mark that I was getting kind of run down from running the business. It was sort of the business of the business, right? Lots of work to do, lots of forms to fill out, lots of work on the government end, on the healthcare end, and I felt more like an administrator than a PR professional.

It was also at that time I was flying on my way to Miraval, which is a spot go to every year at the end of June to sort of have a refresh for the second half of the year. I landed in Atlanta and two of my employees back here in our Bethesda office had gotten into an argument on that short flight and one of them quit. So, I spent much time that week at Miraval reflecting — is it time for me to move on?

I kept thinking, “am I just going to one day shut the doors and say, okay, goodbye, News Generation?” So, I started to think about my exit strategy. In the meantime, I was teaching a couple of classes a semester at American University and really fell in love with that work. About two months after that trip to Miraval, I got a call from somebody who was interested in buying my business.

And then I got another call. So, I decided that I would embark on hiring a broker to see if this was the right move for me. I didn't think I would actually pull the trigger. It was more of a fact-based mission. I was thinking, I'll do this and then I'll realize it's not a good idea to sell. I loved my company. I loved my employees. I loved what I had accomplished. I was just, like I said, just getting a little bit run down. And I kept thinking maybe there's something more for me to do out there.

I was negotiating with a couple different firms that were interested in mine, kind of zeroed in on one, and sold to Four Media Group in April of 2020. As we all know, that was right at the start of COVID. I even gave the CEO an out and I said, “I know we're probably going to be out of the office for a couple months, so if you want to wait until July, when this COVID thing is over, I'm happy to do that.”

And he said, “nope, let's move forward.” Shortly after that, we integrated our teams. Their company at the time was pretty small and they were growing through acquisition of talent and acquisition of smaller companies. I'm still the largest company that they acquired; they acquired a couple of companies that had one, two, three employees. I had about 15 at the time of acquisition.

Elizabeth Shea (06:19)

Okay, wow, that is a great story. So, what was the timeframe between when you were first approached? It's interesting that you were approached by two companies at once. That's not surprising. So, what was the timeframe between that period and when you actually exited in April?

Susan Apgood (06:28)

That was in mid-2018. So, it was about a little over a year and a half, maybe a year and nine months. I was ready to do it earlier, meaning a couple months earlier. But all of the things with the lawyers and the contracts and all of that got delayed. The original closing date was supposed to be January 31st, and it ended up just being a couple months later.

Elizabeth Shea (06:38)

Okay, got it. So, you worked with an investment banker or a broker. Did you do anything else to learn about what the process might entail? Or did you feel like because you'd worked with clients or you've seen other colleagues go through the process that you had a good idea of what to expect? Did you get any counseling or coaching?

Susan Apgood (07:22)

I didn't have a coach, which is probably something I should have done. I've become very inquisitive about sales of businesses — particularly about sales by women owners. The broker that I used, as soon as I had signed the contract, he was wooing me, and then I signed the contract, and he was very condescending towards me because I was a woman. He asked me, “honey, do you know what a balance sheet is?” There was a lot of questioning like that. And it was extremely insulting.

I probably would never use a male broker for anything in this space, and I would not recommend female founders use male brokers. I don't think all of them are quite as bad as this guy was, but I know other women that have sold and have had the same sort of treatment from males, saying things like, “should we get your husband to help us here and are you sure you can handle this?” You know, that type of talk.

This was my broker to make that clear. This was not my acquirer. So, the broker ended up breaking down a lot of the communication because he really felt that he had to train me on what my business was. I knew my numbers up and down. I knew exactly what I was doing.

Every time he started a sentence with “honey,” I was like, “this is not going to be good.” I told him several times, “please don't call me that.” It was that type of treatment that was not great, looking back, if I could have gotten out of that contract. He also did a couple of other things that were not ethical along the process regarding money. I would have stopped that part of the contract if I could have.

Elizabeth Shea (09:36)

Yeah, I mean, we're not an investment banker at Treefork, but we work with bankers and brokers. So, that is a very, very important decision to make. I think sometimes it's overlooked — that's what I've been hearing — because they are driving. It's basically like a real estate agent for your home too, but there's a whole lot more at stake. So yes, that selection process is very important.

Anyway, so thank you for sharing that. So, when you went through the process of the acquisition — you signed the deal, you clinked the champagne. What was your experience like after that? How was the experience for you and your people?

Susan Apgood (10:13)

Yeah, there was a lot of uncertainty. I had one employee who had been with me for a long time, maybe 12-13 years, he left at the unknown quantity of the acquisition. His wife was expecting, and he wanted more sort of solid footing, which I could understand.

And a couple of employees left quickly after the acquisition, mostly because the acquiring firm thought they were rightsizing salaries. They're based in Arkansas, and salaries are lot different in the Washington DC area than they are in Arkansas. So, a couple people left because they had salary decreases. They quickly left and found jobs that were more comparable.

Elizabeth Shea (11:17)

Was that something that you were anticipating or was that part of your conversation with the acquirer?

Susan Apgood (11:25)

No, it was not. I had a couple of things that were really important to me. One is I didn't want them to let anybody go. None of my employees for one year. So that was my first — I don't want to say demand — but my first preference.

The second was I wanted everybody to stay in my office space, which is an office space that I own here in Bethesda. So, I became an employee and then I also became the landlord on the same day, which is interesting. And I still wanted to be able to teach the classes that I was given at AU. And then the last of my preferences was money. So, I think when that took place, I think the acquiring company thought, “ooh, we're going to get a really good deal because money is not at the top of the list.”

So, it sort of came from a unique position. Especially one of the employees who was extremely bright and left, she was just coming off an internship, and I had just offered her a full-time job before the acquisition. I think her salary had not been in the system long enough to make it something that they couldn't adjust very quickly. So, they did take advantage of that. And as a result, I lost a really, really good employee.

Elizabeth Shea (13:00)

That's horrible. That's too bad. So, there are obviously going to be casualties whenever you go through an acquisition. Looking back through the process, is there anything different that you would have done in going through that process, either in the diligence phase or in the communications to your employees? We haven't really touched on the communications. But what would you have done differently? Or what could you advise people that are listening to this, what they might be considering?

Susan Apgood (13:26)

I mean with the acquiring company, the CFO at the time was fabulous. He understood. He and I had great conversations. But he quickly left after the acquisition, maybe four or five months later. And there was a high turn in that position. So, it was very hard for people to understand what my contract was all about, because they had to relearn for the new C-people that came in for the financials. So, every time I was re-explaining, and it just became really tough. So, I think just knowing the longevity of some employees, but of course, a lot of it you cannot control. That's one thing I would do different.

Another thing is I would have asked more about their books. They sent me some stuff, but once the acquisition took place, there were some glaring inconsistencies that I should have pushed harder on. And if I had pushed harder on, I may not have made the decision that I did. Not that anything was horrible. I don't want to make it seem like that, but it was just more . . . I felt like there was some stuff that was not given to me on purpose for me to look at.

Elizabeth Shea (14:37)

Yep. So, you're now in three-year earn out. I think you had an 18-month earnout and then a five-year contract. Can you talk a little bit about that experience during those five years? Because that's pretty rare for someone to stay on board for that long.

Susan Apgood (15:10)

Yeah, I would not recommend that, staying on five years.

Elizabeth Shea (15:13)

Okay, okay. So, tell me why. Why would you not recommend that? What would you do differently?

Susan Apgood (15:18)

So, I always tell my kids — when we make decisions, we have to make the decision at the time that we have to make it with the information we have, right? So, I made a good decision at the time. What I didn't know was there was another PR services company that was failing and letting go of a lot of employees and my new company was picking them up. At some point, it was probably a year and a half after the acquisition that the culture shifted.

So, there were three cultures at the company. One was the people that were in the office down in Bentonville, one was all the remote people that the CEO was acquiring, and then the third was from this company, which is the company Multiview. Some really great people came from there, but then some really poor performers came from there and they really protected one another.

And the culture of them just having sheer numbers shifted in about, I want to say, July — somewhere between July and October in 21. So, everything was really going well. And then all of a sudden, the system that I had set up that the company was using because it was very efficient, was all of a sudden gone to a system that nobody really understood but the people that came from Multiview. So those of us that had been there for a while were at a real disadvantage. And it became hard because we didn't know the process and we kept getting punished for not following it. So, it became this game of, geez, I'm really trying to figure it out. I'm trying to do a good job here, but the system was kind of set up to fail. For as much as I tried to understand it and follow it, it was too hidden from those of us that were on the outside.

Elizabeth Shea (17:35)

Yeah, it's not to be forgotten that sometimes cultures have a hard time colliding, particularly during COVID. That was a consistent theme that we've heard is that it's been hard to get cultures to align. It's been harder to keep cultures aligned, particularly when you have multiple acquisitions. And so, you almost seemed like you were in the sandwich part of the equation. How did you manage that with your team from either a communication standpoint or a culture standpoint and could you have done anything differently do you think?

Susan Apgood (18:15)

I really thought — because News Generation was such an efficiently-run company, we were so profitable —that I was giving this new company a gift. And I probably was overconfident in that. They had no processes in place when they purchased my company. It was not so much about doing good work. It was more about who could win that battle, right? I couldn't have done anything differently there.

I really tried, my team tried, but we were known as the NewsGen team, right? And then people in the company would get mad when we would talk about the “OGs” — the people that were News Generation and then the people that were MultiView. But the company really never did anything to bring the cultures together. It was almost like they kind of liked that dichotomy of having opposing views.

So, culture is tough and it can kill a company. It's so important to make sure that people are on the same page. They may have said the right things, but actions did not match what they were saying.

Elizabeth Shea (19:33)

Do you feel like you knew what you were getting into when you first were acquired? Do you feel like you could have done more to learn about that process or what the culture was like?

Susan Apgood (19:59)

I feel like the culture became the culture from Multiview. So, for the first year and a half, it was fine. Like it was really fine. And then they hired a couple people above my team that were not nearly as competent as people on my team. And so, a bunch of them ended up leaving. One went and worked for REQ. So as a result, as soon as that happened, I knew that that culture had trumped anything and there was very little I could do at that point. So, I really just became an employee that sat back. I did my sales. I kept quiet. They didn't want to hear from me and that was fine. I kind of knew my role, but I'm a person that loves to do and to progress and to grow and to feel purpose. So, the last couple of years were very tough there.

Elizabeth Shea (20:58)

You mentioned earlier that you think that the five-year point was a little bit too long. What would you advise is a good amount of time? Or can you even project? What advice can you give to people?

Susan Apgood (21:09)

I think eighteen months to two years is plenty of time. And if there's more time needed and it's amenable to both sides, have the former CEO be a consultant. But my role went from really big as the CEO, and they were so excited that I had tapped into all these things, to just one small lane of sales. I just felt super underutilized. And that came at about 18 months to two years. Now, if there wasn't all the acquisition of this talent that was sort of being pushed to the company from people getting let go from another company, I don't know if it would have been different, but that was my experience. And I felt like at 18 months, everything that they needed to know about the way my company was run had been turned over to them.

Elizabeth Shea (22:13)

Right, right. And that is not inconsistent with what we've been hearing on this podcast in general, basically. Very much so. In fact, some people don't make it to a year, but that's just a difference in experiences and transitions.

Susan Apgood (22:16)

Okay, interesting. Yeah, from being in different Vistage groups over the years and watching people go through acquisitions, and people leaving before their contract is up, that's something I'm really proud of that I stayed. Because there were many infractions that I could have left on. Like my original contract, the very first line of it was incorrect. It said I would report to one person who I never once reported to. So, the contract could have been made invalid, but since I'm a person of my word, I stayed there for exactly five years to the day and did everything that was asked of me and was a complete professional.

Elizabeth Shea (23:10)

Yes, I was very impressed by the integrity that you took to this role and the way that you continue to show up. That's very fascinating that you talked about the contract not being what ended up happening because that has been a consistent theme as well. So, sometimes you have to decide whether or not that's something you want to continue to support or not. And how you show up for the rest of your employees is also very important. I really appreciate you sharing that. I think that a lot of our listeners, I'm hoping they'll take away from this is that there's a lot of due diligence to do up front.

You mentioned Vistage for example, and I've had other guests that have been members of Vistage and also Entrepreneur Organization, Young Presidents Organization, and we had a guest on that was from Mindshare. Those groups are so important to have that kind of coaching. Do you wish you would have had done anything differently from either a coaching standpoint or potentially looked at a different investment banker, for example, or business broker?

Susan Apgood (23:47)

Yeah, I would have. The person that came to me was highly recommended through somebody that I really respect, and I let him know many times over that that was not a good referral. What's also funny is the broker wrote in his contract that none of his clients could say anything negative about him online, which I thought was interesting. And my husband, who's an attorney, said, “that's a really strange thing for somebody to put in a contract.” Well, now I know why, because I'm sure he probably has a number of clients that have not been happy. So, yes, I would definitely have gotten a different broker.

Sometimes you feel when the train leaves the station that if you back down, there's already so much momentum . . . But I have talked to many people who were days before signing and said, “nope this doesn't feel right” And they've let things go.

Would I have done that? Knowing what I know now, yes, but after year one, no, I was pretty happy. Not that it was seamless, but I felt heard. And then once the transaction happened and our culture shifted, many people became invisible overnight.

Elizabeth Shea (25:26)

Right, right, interesting. Well, thank you for sharing that information. I think we're going to wrap up the show now, but I'd love to hear any last pieces of advice you might have. If you were your former self, what would you have told yourself? What can you give our listeners today that they might be able to take away?

Susan Apgood (25:57)

Yeah, I think mentoring anybody that would listen — if you're interested in selling a business, talk to as many people as you can. I know, Elizabeth, you and I spoke. I think the challenge is for women that they're . . . back in 1997, there weren't a lot of women running businesses, right? And in the 2020s, not a lot of women selling businesses. So, I think we're this core group who is kind of pioneering in this space. So, the idea that I would say is, talk to as many people as you can. And once you do and you have an open and honest conversation like we just had, you realize it's not always shiny.

It's a great honor that somebody wants to buy something that you built, but if you really care about what it's going to look like after they've acquired it, then it's probably not a great idea to sell. Because things will change and they have every right to change it. That's kind of the risk that we have to take as business owners. I didn't expect it to stay in the same form that it did. I expected it to get better and better and better and, with this new resource, to expand what we did and offer new services. That, in the end, just really wasn't the case.

Elizabeth Shea (27:29)

Right. Those dreams of what you think might come when they don't materialize is very frustrating and very tough to deal with. I certainly know that experience. Well, thank you so much, Susan. I really appreciate all your time today and your transparency, honesty, and the advice that you're giving.

So now you've moved on to your next career and you're at American University, right?

Susan Apgood (27:50)

I am. I'm a full professor at American University and I am teaching four classes a semester, which is a lot. two on the purpose of business, one on business professionalism, and one on business ethics.

Then in the spring, I'm teaching those courses again, but another course on women in leadership, which is a course that I developed with a colleague of mine and super passionate about it. We talk about women in confidence, and we talk about the double bind, and we talk about taking time off for caregiving of children and parents. And we talk about different trends in women's working relationships and their careers. So, it's a very fulfilling class. And that's really where my passion lies in being entrepreneurial, helping women get on boards, helping women get funding, helping women get promoted. That is my goal and sort of life's work right now.

Elizabeth Shea (28:56)

I think that's amazing. I mean, I do have to give one little anecdote, which is that when I went to buy a business partner back many years ago, they did ask if I could have my husband there when I wanted to go to the transaction. So that is a real thing.

What advice would you give women business owners specifically in going through the journey of exiting?

Susan Apgood (29:08)

Yeah, I think talking to as many women that have exited as possible. Funnily enough, there's a woman who happened to move next door to me about four years ago who sold her business about a year after I did, in the same field, in public relations. We have teamed up, and we are writing articles and doing some thought leadership on women business owners and sales.

Elizabeth Shea (29:47)

I love it!

Susan Apgood (29:48)

We had pretty much the same journey in terms of the sale itself. So, I'd love to change that for women. I think if there are women business brokers out there, it would be phenomenal to connect with all women in all industries that are thinking and looking to sell because we understand each other a lot more and we just manage things very differently than our male counterparts do.

Elizabeth Shea (30:05)

Yes, you know, I actually just met a woman business broker a couple of weeks ago. I'm excited to introduce her to some colleagues as well. We'll have to make sure that your neighbor's on the show.

Susan Apgood (30:21)

Excellent, wonderful. Yes, yes, I will introduce you two! She's lovely, yes.

Elizabeth Shea (30:24)

Okay, wonderful. Thank you again, Susan Apgood. I really appreciate your time today.

Susan Apgood (30:27)

Yeah, sure. Thank you.

Elizabeth Shea (30:29)

Thank you, everybody. Bye bye.