Bullhorn's Art Papas explains why a good deal isn't all about the money

Art Papas
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Bullhorn was sold for a nine-figure sum (Source: Getty)

Four years ago I was approached by several private equity (PE) firms intent on investing in my company. Bullhorn’s valuation was higher than it had ever been. However, the decision to partner with a financial sponsor was more about enabling our strategic vision for the business than realising a financial goal.

As companies get bigger, they tend to lose their identities – especially when the near-term goals of investors conflict with what’s best in the long term for customers and the business. Like any founder, I knew what had made Bullhorn a success to date, and was determined not to lose sight of this.

The decision to sell wasn’t easy, but we kept our culture and our integrity because we chose how to sell. With that in mind, here are three things you’ll want to do before cashing in.

1. Take your time

A common misconception when it comes to selling you business is that the best buyer is the one with the most money. The financial side is important, but it’s not everything.

We met with around 18 PE firms before making a final choice. Eventually, we found a progressive investor in Vista Equity Partners, a buyer that understood our long-term objectives, and was willing to finance our long-term growth. After nine months, I took the offer.

Could we have made the decision on a faster timeline? Certainly. But had we not taken the time to really understand the buyers, their philosophies, and speak directly to executives who they’d worked with the past, we might have sold to a group that didn’t share our vision.

2. Governance control is not operational control

Technically, by selling to a PE buyer, you are relinquishing control of the governance of the organisation. However, governance control is very different from operational control, which management always retains. It’s essential that your new investors share your vision for the firm.

For example, it was my belief that Bullhorn needed to expand into new vertical markets in order to grow. This was considered a risky move by several of the firms that approached us as it would require significant upfront investment. But our eventual buyer understood the long-term return those investments would yield, and since then, that expansion has been one of the single biggest drivers of Bullhorn’s growth.

3. Never ever forget the customer

When a company is growing north of 30 per cent a year, it’s easy to forget why you have a business in the first place: to serve your customers. Growing pains can make customers seem more of a burden than a blessing. As small, plucky software companies grow up to become dominant market leaders (think Oracle or Microsoft) for example, it seems inevitable that they lose touch with their customers.

I’ve always rejected this notion. Whatever a company’s size, customer experience should always be the priority. Investor-centric growth strategies all too often neglect the people who matter the most. But to the best of my knowledge, no company ever got sued, went broke, or became stagnant by staying focused on solving problems for its customers. Customers were your north star at the beginning, and they should continue to guide your company as it grows – regardless of who owns the shares of stock.

The best investors understand this. With the right financial partner, the right focus, the right incentives, and the right motivation for your employees, there’s no reason your passion for your customers can’t continue to scale alongside your business.

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