My hands were shaking.
I was sitting in a lawyer’s office in Victoria, BC, signing what felt like four phone books of documents. Stacks of paper with yellow “sign here” tabs. My business partner Chris was next to me, scribbling his name on an identical pile. We were selling Pixel Union, our Shopify theme company, for $7 million.
A few months earlier, we’d been offered $2 million. We almost took it. Then the buyer, Richard, came back at $7 million after some back-and-forth that I still don’t fully understand. I remember thinking: this cannot be real. I was 27. I’d been making good money, but I’d never had a number with that many zeros attached to my name at once.
I walked out of that office and did the math in my head. I could invest the millions I had left after taxes, earn about 8 percent on my money, and live a comfortable life without lifting a finger. No clients. No deadlines. No stressing about payroll. I was free.
That feeling lasted about three months.
Richard brought in a guy named Brian to help run things. Brian was older, charismatic, and carried himself like someone who’d done this a hundred times. He wore nice suits. He had a firm handshake. He told great stories about deals he’d done. I trusted him immediately, which turned out to be one of the most expensive mistakes of my life.
Brian was a grifter.
It didn’t surface all at once. It never does with people like that. First there were small things — expenses that didn’t add up, trips that seemed unnecessary. Then bigger things. He was approaching our clients behind our back, building a competing agency using our resources. He’d deleted email threads to cover his tracks. Hundreds of thousands of dollars in unauthorized spending. He’d been stealing from us to fund his own venture while collecting a salary to run ours.
The firing required lawyers. The cleanup took years. The legal battle that followed was one of the most stressful experiences of my life, and I’ve had a few.
Here’s what killed me: we had sold to the wrong person, and by extension, we’d let the wrong person into our company. The number on the check didn’t matter. The person writing it did.
I think about that a lot. Founders obsess over valuation — the multiple, the earnout structure, the tax treatment. I get it. But the single most important variable in any acquisition is who is buying your company and what they plan to do with it after you hand over the keys.
A couple years later, I was sitting in Chris’s fishbowl office at MetaLab, our design agency. We’d just gotten off a terrible conference call. I don’t even remember what it was about — some client issue, some HR fire, some vendor problem. It all blurred together.
I looked at Chris. “How is it that we have millions of dollars in the bank and yet here we are, dealing with the same stressful crap as before?”
Chris leaned back in his chair. “I’m done.”
He wasn’t being dramatic. He meant it. And I felt the same way.
I tried to explain the feeling to a friend later that week, and I came up with this metaphor that I’ve been using ever since.
Imagine you love chopping wood. It’s your happy place. You’re out in the yard, the sun is shining, you’ve got your axe, and there’s a satisfying crack every time you split a log. Pure bliss. Then your neighbor walks over and says, “Hey, I’ll pay you $20 to chop some wood for me.” Great. Fast forward fifteen years and you own a sawmill. You’re sitting alone in a glass office at the top of the building, wearing a suit, doing paperwork. No axe. No fresh air. No friendly coworkers. That is what it feels like to build a business past a certain size.
And it’s the reason most founders start thinking about selling.
When you decide to sell, you’ll meet three types of buyers. I’ve dealt with all of them, from both sides of the table.
Private equity firms. These are spreadsheet people. They operate by committee. They’ll spend four to six months running due diligence, then renegotiate the terms. We once had a deal for MetaLab at $50 million. The PE firm kept adding conditions, changing terms. The process dragged on for months. The wire never came. The deal fell through.
PE firms buy your company, load it with debt, cut costs to juice margins, and flip it in five years. If you care about your team and your product, this should terrify you.
Strategic acquirers. Big companies that want your product, your technology, or your customer base. Your team gets absorbed into a 50,000-person company. Your product becomes a feature. Your culture dissolves. Your best people leave within eighteen months.
Permanent capital / holding companies. This is what Tiny is. We buy companies and hold them forever. No fund lifecycle. No pressure to flip. We take away the stuff the founders hate and let them keep doing the work they love.
Bank statements. We check bank statements rather than running months of accounting. If the cash is coming in and the numbers match what the seller told us, that’s 80 percent of due diligence.
Culture. Is the team happy? Do people seem engaged? You can feel it in a thirty-minute visit.
The founder’s energy. Is the CEO burned out or energized? If they’re burned out, we need to understand whether there’s a team that can run the business without them.
When someone emails me about selling their company, I ask three questions: What’s your annual revenue and profit? Is there a team that can run the business day to day? What are your valuation expectations?
That’s it. If those answers make sense, we’ll have a conversation. If they don’t, I’ll tell you straight.
When we bought Dribbble, I’d been emailing the founders for almost a year. Eventually they agreed to meet. I could tell within five minutes they were exhausted. So Chris and I did something we’d started doing with every acquisition: we asked them to make a list of Anti-Goals.
“Write down everything you hate about your job,” I said. “Every meeting, every task, every obligation that makes you miserable.”
Dan and Rich looked at each other. Then they started writing. Ad sales calls. HR issues. Managing a team that had gotten too big. Legal paperwork. The list was long.
For each item on that list, we built a plan to take it off their plate. Then we recruited Zack Onisko as CEO. Zack understood the design community. He wasn’t some MBA parachuted in from a PE firm.
We were trying to be the buyer we wish we could have sold to.
Committees. If your buyer needs approval from a committee, a board, a fund manager, and an advisory panel before they can make a decision, run.
Late-stage renegotiation. You’ve agreed on terms. You’ve spent two months in due diligence. Your lawyers have run up $200,000 in fees. And then the buyer comes back and says they need to adjust the price. This is not a bug. It’s a feature of how certain buyers operate.
Anyone who calls your team “human capital.” If the people buying your company refer to your employees as resources to be optimized, they will treat them that way.
The “Put Grandma on the Roof” move. If you want to get rid of someone, you don’t fire them outright. You slowly gain their trust, then engineer a situation where they feel like leaving was their own idea. Brian used this exact playbook on one of our key people. It’s sociopathic. And it happens in acquisitions more often than you’d think.
Some founders stay. Dan and Rich stayed involved with Dribbble. They got to do the creative work they loved without the management burden they hated.
Some founders leave. When we acquired AeroPress for $70 million, Alan Adler was ready to step back. We grew online sales by 500 percent in two years. Alan got to focus on what he’d always cared about: designing things.
Some founders come back. We bought Pixel Union back in 2019. The company I’d sold years earlier, the one that had gone sideways after Brian — we acquired it again. It felt like coming home.
Every one of those outcomes is valid. The important thing is that it was the founder’s choice.
I’ve been on both sides of this.
I sold a business to the wrong person and lived with the consequences. I watched a grifter tear apart something I’d built. I sat in a lawyer’s office at 3 AM during a legal battle I never should have had to fight.
And then I spent the next decade buying businesses and trying to be the person I wish had bought mine.
If you’re thinking about selling your company, here’s my advice: don’t start with the valuation. Start with the buyer. Talk to the founders of other companies they’ve bought. Ask those founders what happened after the check cleared.
The number matters. But it’s the fourth or fifth most important thing. The first is whether you’ll be able to sleep at night six months after you sign those phone books of documents.
If you want to talk, my email is andrew@tiny.com. I wrote a lot more about all of this in Never Enough.
