I sold my business - and I (sometimes) wish I hadn't

This post will be different from most of what I write here as it will be more personal (but with some lessons learned that I hope are universal).

From 2015 to 2022, I was CIO at Sundial Capital Research, the publisher of the very well-respected service called sentimenTrader. In 2021, the business was sold to a private equity firm, and by late 2022, I was no longer a part of the company.

Let's go back to 2014 and look at the journey that led to the sale (and the lessons learned).

I had just finished my doctorate and was looking for a way to get people to know about my research. While working on the dissertation, I started a blog where I wrote about the ideas in my dissertation and shared information about the markets. That blog never really did much, and I didn't feel like it was the 'right' way to go about things.

In the last year of my doctorate, I had been working on a website that would take live once my program was complete. My research was on the topic of Twitter Sentiment using Natural Language Processing. As part of my research, I wrote scripts that automatically assigned a 'positive,' 'negative,' 'neutral,' or 'spam' value to each Twitter message I collected. These sentiment values were then aggregated to create an overall value for each market symbol (e.g., AAPL, MSFT, etc.).

The website I created —Trade The Sentiment—was how I would 'force' people to interact with my doctorate research. One of my advisors had told me nobody would ever read my research, so I was determined not to waste years of my life doing something that would never be 'read' or 'used' by anyone.

I already knew how to program in Python, so I searched for a Python-based web framework (after struggling too long with PHP, Ruby on Rails, and others). I landed on using the Python-based framework named Flask and built my site over many late nights. Teaching myself how to code - way back in the 'olden days' when you didn't have chatGPT to write your code for you - and building out my site to include a subscription service, interactive charts, and other 'cool' ideas.  

Around the time I finished the doctorate program and defense, I launched the website/service in December 2014. The screenshot below highlights my fantastic design capabilities.

I got a bit of hype on Twitter from users in the FinTwit space and got a few paying customers on the site, but marketing was challenging.

As I was trying to develop ways to expand my site's reach, I reached out to Jason Goepfert at sentimenTrader. At the time, Jason had been publishing the sentimenTrader newsletter and website for around 14 years and was very well known in financial markets and sentiment. I reached out to Jason to see if there was a way to work together - and in March 2015, I joined sentimenTrader as the company's Chief Information Officer and partial owner. 

You rarely meet someone you click with so quickly, but Jason and I clicked. We quickly realized that working together would provide so much opportunity for the business.

After six years of working together, Jason and I sold Sundial Capital Research—the parent company of sentimenTrader—in 2021. We sold the business for several reasons, but ultimately, it was to take some cash out of something that Jason had bootstrapped for almost 20 years. By late 2022, neither Jason nor I were employed at the company we had put so much time and effort into over the years.  

This post isn't a "Hey, look at me - I made it!" post. It's a post highlighting the lessons I learned from that experience. I present those lessons below in no particular order.

Lessons learned from selling a company

• Be ok with giving up control.
  • You will lose control of your business and its future. It would be best if you were ok with that. Can you leave the company you've spent so much time (and sweat) on?
• The 'price' you get for your business will never be enough.
  • Jason and I got an excellent deal for the business. When we sold it, we had another competing offer for 100% of the company at a lower valuation. We felt good about the valuation, but looking back at things now, I see it wasn't enough. Mind you, not in a monetary sense, but in a "this is my baby... no amount of money is enough" sense.
• Think about your 'identity'. Is your identity wrapped up in your business? It may be tough to walk away from that business if it is.  
  • At sentimenTrader, I was "The CIO and part-owner" of a well-respected and well-known business. It had become my identity. I was proud of what Jason and I had built and had taken an idea from a blank page to something people were paying for. This identity issue has been the biggest one for me to overcome since leaving the business.
• Do your due diligence on the investors/buyers. Be sure you know everyone who will be involved after you sell.  
  • Be sure you are ok with the people who will be taking over your business. Are they running it for the right reasons? Do they share your values? Ultimately, this isn't as big of an issue if you sell 100% of your business and walk away, but if you stay around for a while, know who you'll be working with. Again, values, reasons for buying, etc, come into play here.
• Understand the vision and goals of the new owner(s). 
  • Do the new owner's goals and vision align with the goals/vision of your business (and you)? They don't have to align—especially if you are not involved—but you need to be comfortable with where the new owners will take your business.

There are many days when I miss being a part of the business. The 'identity' issue is the biggest reason for that, but there's also the fact that Jason and I worked well together - which I miss dearly.

I could write for days on 'lessons learned,' but I'd end up sounding like a regretful old man at some point. I don't want to be that way and don't mean to come across that way. The experiences I gained from 2014 - 2022 were life-changing, and I wouldn't trade them for anything, but I'll have second thoughts if I'm ever lucky enough to sell another business.

The people who bought Sundial Capital Research are still running it today. I don't entirely agree with some of their decisions, but it's their business to do what they want, and I hope they are successful.

Do you want to share any 'lessons learned' from selling your business? I'd love to hear them (you can drop them in the comments or email me at eric@ericbrown.com)