Unprofitable Business Survival
An M&A Science Podcast
Hosted by Kison Patel
“Know where your line is and don’t cross it. As soon as you cross it, you lose your negotiating powers.”
On this episode
Sean Peace, the founder of an auction marketplace for music royalty streams called Royalty Exchange, tells a captivating story about selling and exiting an unprofitable business in a unique niche.
After two years and $100K in revenue, Peace landed $2 million in venture capital financing to accelerate Royalty Exchange's growth – or so he thought. Venture capitalists aren’t interested in slow growth, but as Peace explains, fast growth may not be the best for every company.
Peace suggests establishing a sustainable, positive cash flow before accepting any outside investments. It is important, Peace explains, to fight the pressure to grow too quickly and invest money wisely.
0:20 – 2:22 Background on SongVest leading up to Royalty Exchange business idea
2:23 – 3:49 Formation of Royalty Exchange and running it for the first 2 years
3:50 – 6:41 Attracting first $2M venture capital injection and how funds were invested
6:42 – 11:10 Pivot point to switch marketing strategy when proven ineffective
11:15 – 12:09 Move below – talks about sales specifics and health of companies today
12:10 – 16:56 Deciding to exit and splitting sale of company to two buyers
16:57 – 19:19 Finding buyers without hiring an advisor & paying down debts
20:41 – 26:44 Discussing deal surprises and lessons learned
26:45 – 28:23 Sean answering would he start another company and raise from VCs again
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