The best time to sell your company is usually when it is growing nicely and has strong momentum.
For many founders, that seems like the wrong time. “Why would I sell it if everything is going well?”
The answer, of course, is that’s when buyers want to buy. They see much better odds of continued growth and are willing to pay a premium.
They don’t want to buy—or spend much—when your growth and profits are down, you are facing headwinds, and are losing momentum.
Darryl Pahl is the co-founder of DFnet, a Seattle-based company providing clinical trial data management software and services.
Along with his wife and co-founder, Lisa Ondrejcek, Darryl started the company more than 20 years ago after careers at Fred Hutchinson Cancer Research Center.
The company runs DFdiscover, an enterprise-grade electronic data capture and management platform used in clinical studies worldwide.
With offices in the U.S., Canada, and South Africa, DFnet has grown to more than 50 employees and is approaching $10M in revenue.
Clients range from the U.S. Department of Veterans Affairs to nonprofits like PATH and major universities.
Still independent and bootstrapped, DFnet has made key moves to prepare for the future—like bringing in a growth-focused CEO this year and stepping back to let her run the company.
This is a good thing for their precious business, whether they choose to sell the company or not. As Darryl describes it:
“The best position to be is to say in three to five years, we would be crazy to sell this company. It’s doing so well. That would be the perfect thing. And what we’re not looking for is a giant payout.
“We have a very modest lifestyle. So it’s not like we’re going out and buying yachts and houses and all this stuff; it’s more like, what would we even do with some giant exit?
“It is an asset, it is a business. There’s a business aspect. But it has to be the right type of buyer. It has to be the right fit —the right person or group—who is respectful to our clients, our employees, and us as owners.
“So the ideal would be to have the luxury of either not selling or being more selective if we do eventually sell.”
They know that a growing, healthy company is worth more—to them or to someone else.
And they will have much better negotiating power if they can walk away from any offer at any time.
Here are more key takeaways from our podcast discussion:
- Buying Not Building – Acquiring DataFax brought 35+ new clients overnight and proved that buying legacy software can be smarter than reinventing.
- Services Plus Software – Unlike pure SaaS, DFnet thrives by combining consulting, hosting, and software in a regulated field.
- Spouse Founders Structure – Their 51/49 ownership split avoided deadlocks and kept marriage and business aligned.
Check out this practical interview with Darryl Pahl on the Practical Founders Podcast.
