(178 Total References)
Dean of Education
Episodes â€” Family Businesscast
Stephanie Breedlove, co-founder of Breedlove and Associates, discusses the common pitfalls to watch out for.
Why This Entrepreneur Rejected A $40MM Offer For A $9MM Company
Stephanie Breedlove - Built to Sell Radio - John Warrillow - Podcast
has been a successful entrepreneur for over 20 years.
After launching a career in corporate America with Accenture, she found her true calling as co-founder and CEO of Care.com HomePay (previously Breedlove & Associates), the nation's largest and most comprehensive household payroll and tax firm.
Credit: Stephanie Breedlove
If you're Stephanie Breedlove, the founder of Breedlove & Associates, you choose C.
Where on earth did Breedlove
get the gumption to turn down an offer of more than four times revenue for her
told me when I interviewed her
for Built to Sell Radio, it starts with having a great little business she
In 1992, Breedlove
founded a payroll company to make it easier for parents to pay their nannies.
It began small and she
self-funded their growth, which averaged 20% per year.
By 2012 they were profitable and had hit $9 million in annual sales, then she
got a call from Sheila Marcelo.
Marcelo is the CEO of venture-backed Care.com and knew of Breedlove because their two companies had a content sharing relationship.
Marcelo saw the synergies between the two businesses and after a short negotiation, offered Breedlove
almost $40 million for her company.
Instead of accepting what most outsiders would see as a very generous offer, Breedlove
Given their beefy profit margins, Breedlove
business could be worth closer to $50 million.
broke off negotiations and soon after wondered if she
had given up on the chance of a lifetime.
Six weeks later, Breedlove
got a surprise call from Marcelo saying she
thought they could get closer to Breedlove's expectations.
Weeks later, Care.com
announced they had purchased Breedlove & Associates
for $55 million.
Fifty percent of the purchase price was in cash and the other half was in Care.com stock.
also had 20% of the $55 million in consideration at risk in a two-year earn-out, which Breedlove
Breedlove's negotiating stance was risky.
was a strategic buyer and arguably had the most to gain from acquiring Breedlove & Associates
should have been willing to pay the most for her
But buyers can be fickle and easily turn away from a founder who comes off as unreasonable.
found the balance between saying no to Marcelo's original offer without closing the door permanently.
Breedlove's poise under fire came from knowing she
had a successful business that she
didn't have to sell.
Being self-financed, Breedlove
didn't have an impatient venture capitalist pressuring her
for a return on their investment.
also didn't have much serious competition.
Rather than compete directly with the likes of ADP
or Paychex, she
chose a sleepy little corner of the payroll market that nobody cared much about, giving her
incredible profit margins.
Negotiators talk about the importance of having a BATNA (Best Alternative To A Negotiated Agreement).
In Breedlove's case, her
BATNA was that she
was happy to keep running her
sold when she
was just 48 years old so she
had plenty of energy and enthusiasm going into her
What's more, being so young, she
wasn't staring down the barrel of retirement, knowing she
had to sell on a timeline.
could relax in the knowledge she
was happy to keep running her
company or sell it if a buyer was willing to pay a handsome premium.
By Stephanie Breedlove, ...
By Stephanie Breedlove, Breedlove & Associates
Ali Brown | Entrepreneur Mentor Featured on ABC's "Secret Millionaire", Business Coach and Consultant, Women's Business Leadership, Speaker
Stephanie Breedlove, founder of Care.com HomePay and Author of "All In"
Stephanie Breedlove on Glambition Radio with Ali Brown