Many entrepreneurs can validate that they have been a part of many different fields, or at least had a hand in a small process of many projects. For Chris Rentner, Founder and CEO of Akouba Credit and Chicago Founder's Circle Cohort 2015, that is an understatement pertaining to his background. Upon graduating from The US Merchant Marine Academy (one of the five federal military academies) Chris entered the world of the oil and gas industry, working for British Petroleum in over 60 countries around the world.
After leaving BP at the age of 25, he founded a logistics company, Chicago Marine Asset Management (CMAM). Generating a few million in revenue in the first 12 months, Chris was on the fast-track to growing his business even further and his success was catching the attention of larger competitors.
After successfully exiting CMAM, Chris invested in an early age startup, WedSocial, a mobile app company designed to help couples plan and execute their entire wedding experience. By advising WedSocial with daily operations, brand strategy and media relations, Chris helped the early stage startup move toward being acquired. Dignitas asked Chris what that process was like and how he and WedSocial approached the challenge of being acquired by WeddingWire in 2013.
"We looked at the market from a competition and acquirers perspective. There were two companies doing something similar to us, one was WAY better funded and the other had built a relationship with a mid tier partner to help drive traffic. We knew we were not going to be the winner in the space but that our technology was better, so we didn't want to get left behind. We reached out to the main players that could acquire our company, pitched a partnership and showed them the holes they had in their business. The goal was show them their issues, and show how we could fix those issues through partnering but then start to really show how acquiring the company would be the best in the end from a value position for them,"Chris stated.
The exit process is different for everyone, but there are two ways you should be looking at your company in this process: retrospectively and prospectively. The first should focus on financials, your business model and historical performance of the company. The prospective is to focus on edge. This means your growth (rate and prospects), technology, lines of sight into high value markets, nature of revenue (transactional vs. contractual, frequency) and the types of clients your business appeals to. All of these factors help tell investors the right story about your company. From there, the key is to find the right market to tell your story to. There are several different markets that could be an option for your company. The graphic below illustrates the different types of buyers that could work for your business.
As we dove deeper into Chris' story, topics of founder's emotions came into play. Exiting can be a complicated and stressful situation for any founder at any entrepreneurial level. Dignitas asked Chris what his biggest challenge was throughout the exit process and what were some factors that he didn't expect?
Chris answered, "Be prepared for it to take much longer and cost more than expected, even when you are being conservative. We actually had to raise money during our M&A deal to ensure we had enough capital to take us through the process."
Some founders look at an exit opportunity as a negative experience. There is the idea that you're leaving something behind that you created or rustling with the feeling of what do I do next? Exiting should be viewed as a successful endeavor. While it has its challenges and perhaps even the opportunity to not happen, exiting should be viewed as an accomplishment, not a failure. At this point, founders have accomplished all they want to and are ready to move on to bigger, more advantageous opportunities. To shed some light on thinking about exiting with a positive perspective, Chris shared his outlook on his process.
"The entire process was actually very stressful. We had limited options and were concerned we would have to fight our competition if we didn't get a deal done with the "A-Level" players in the market. At the end of the day, our product lives on today (3 years later) and has been improved upon greatly since the sale. The rewarding side is knowing people still use the product we built today and the money in our pockets."
By raising capital from the help of friends and family, Chris, and his co-founders started Akouba Credit in 2013 with the idea that there was a better way for small business to receive the credit they needed. Startups were raising capital by lending money directly to individuals, but the Akouba Credit team knew there was a better approach. By partnering with community banks, Akouba Credit provides an automated underwriting platform that helps banks issue loans in under 48 hours with an interest rate lower than other online vendors (between 7-14%).
Almost two years later, Akouba Credit is growing substantially, promoting new employee hiring, a new office and exciting new partnerships. As you can see Chris has come a long way from his beginnings and his success today has relied on making the right decisions at the time the opportunities approached him. What is Chris' advice to other founders?
Can you relate to Chris' story or have questions about the exit process? Dignitas would be happy to help. Contact firstname.lastname@example.org to learn more about how we can help you make your next business move. Please share Chris's story below on social media.