Sramana Mitra: What kind of scale did each of these businesses reach? Are we talking million of dollars in revenue?
Angie Stocklin: To be honest, it was hundreds of thousands. A couple of the brands were in the tens of thousands. Anything that was over a million, we kept.
Sramana Mitra: Talk a little bit about the divestiture process. When you decided that you don’t want to move forward with that business, what is the process of divesting each of them?
Angie Stocklin: That’s a great question. It changed over the years. The bigger the brands got, the more complicated the process got. When we divested the diapers website, we used an outside party to help us with the transaction. The transaction was fairly straightforward and easy.
The bigger the brand got, the longer it took and there were a lot of people involved. There were a lot of lawyers checking everything. There were a lot of trips to our facility to audit invoices. It was a really long process. Luckily, we had a great CFO. We did it over a span of two years so that it wouldn’t all hit at once.
Sramana Mitra: What was the process of finding buyers?
Angie Stocklin: We used a broker. He listed our website for sale just like we used to go hunt for websites to buy.
Sramana Mitra: Where do you hunt for websites to buy?
Angie Stocklin: We used BizBuySell a lot. We would even look for them on eBay.
Sramana Mitra: People sell businesses on eBay?
Angie Stocklin: Yes. I don’t know if they still do it.
Sramana Mitra: What is the name of the site again?
Angie Stocklin: BizBuySell. I don’t even know if it’s still in existence.
Sramana Mitra: I had no idea that people buy and sell businesses on eBay.
Angie Stocklin: They used to.
Sramana Mitra: Cool. When you were divesting these businesses, what kinds of models were you using to value the businesses. When you first bought a business that had $40,000 in revenue and you got it for $10,000, did that equation get turned on you as well? Were you building hundred thousand businesses and then getting paid like $20,000 to $30,000 to sell the business?
Angie Stocklin: It varied. Some of the businesses were a little bit flat when we sold them. People weren’t wiling to pay a high multiple for those. Some of the businesses were trending up. It really depended on the profit of the business.
Sramana Mitra: Do you have a thumb rule?
Angie Stocklin: We divested our last business about 19 months ago. It’s been a while since I’ve been in that ball game.