94: Finding Purpose After Selling The Business – Sarah Dusek

by | May 31, 2022

Succession
Stories
Podcast

94: Finding Purpose After Selling The Business – Sarah Dusek

by | May 31, 2022

How do you move past the difficulty that comes with leaving your business? Sarah Dusek is the Co-founder of Under Canvas and General Partner of Enygma Ventures. Founded in 2009, Under Canvas re-defined experiential hospitality in the US growing from their first location in Yellowstone, Montana, to several luxury glamping accommodations near America’s most popular national parks. Sarah shared her incredible journey scaling and growing a business from nothing, finding growth capital, to selling it for over $100 million to a private equity firm. After grieving the loss of moving on from her role in the business, she found a new purpose. Now Sarah invests in women led businesses in southern Africa empowering entrepreneurs to reach their full potential.

Listen in to learn more about:

  • Finding clarity on what you want and why
  • Hiring the right people to unlock potential
  • Managing the difficulty that comes with business transition
  • Developing a minimum viable product (MVP)
  • Leveraging organic marketing strategies

Show Links:

LinkedIn: linkedin.com/in/sarahhdusek

Web: enygmaventures.com

Email: sarah@undercanvas.com

Twitter: @undercanvas

About Succession Stories Podcast

Succession Stories is an award-winning podcast hosted by Laurie Barkman, the Business Transition Sherpa– guiding business owners through the process from “transition to transaction.”

Learn more at https://smalldotbig.com 

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Transcript:

Laurie Barkman:

Welcome to Succession Stories! I’m Laurie Barkman. As an exit value planning and M&A advisor, I call myself The Business Transition Sherpa. This podcast guides entrepreneurs from transition to transaction- from building value in your business to letting go. 

What do I do when I’m not hosting a podcast? I work with owners to maximize business value with my firm, SmallDotBig. And as a Certified Mergers and Acquisitions Advisor with Stony Hill, I guide you through the complex process of selling your company.

Tune-in to Succession Stories for weekly insights to reward your hard work and avoid succession regrets. Hit subscribe wherever you listen to podcasts, and sign-up for our newsletter at successionstories.com. Here’s to your success!

Is this the year to sell your company? Don’t leave your exit to chance. Stony Hill Advisors works with entrepreneurs like you to get ready for what may be the biggest transaction of your life. Learn what your business is worth by visiting stonyhilladvisors.com/podcast.

Intro:

Sarah Dusek is the Co-founder of Under Canvas and General Partner of Enygma Ventures. Founded in 2009, Under Canvas re-defined experiential hospitality in the US growing from their first location in Yellowstone, Montana, to several luxury glamping accommodations near America’s most popular national parks. Sarah shared her incredible journey scaling and growing a business from nothing, to selling it for over $100 million to a private equity firm. What I appreciated most about her story was the honest description of what it felt like during her time of transition. She grieved the loss of being a CEO of this business, and how she saw her identity after she left. She took the time she needed to grieve and eventually found a new purpose. Now Sarah invests in women led businesses in southern Africa empowering entrepreneurs to reach their full potential. Enjoy this episode about finding purpose after selling the business with Sarah Dusek.

Laurie Barkman:

Sara Dusek, it is so wonderful to speak with you today. We’re talking to each other from across the world, and as you sit in South Africa, and I sit the United States, you and I had a chance to talk ahead of time, I’m super excited to learn about your entrepreneurial journey, and what you’re doing today to support women in venture capital and their investments as an – you’re investing in them as entrepreneurs, so welcome to Succession Stories.

Sarah Dusek:

Thank you so much.

Laurie Barkman:

Why don’t we start with you, and your origin story as an entrepreneur? Tell me a little bit about you, your husband, Jacob, and how you founded your company Under Canvas?

Sarah Dusek:

Well, I think of myself as an accidental entrepreneur in that it wasn’t something that I was planning on. In fact, going back even one step further, I used to think that the idea of making money was somehow evil so I came full circle, crossed over to the dark side and realized actually, that building companies can be a hugely transformational thing, and that there’s so much good, that can come from the act of building through entrepreneurship, and I have come to learn that entrepreneurs really are the builders of our society, that the entrepreneurs who build businesses are the people who move us into the future and move us forward and shape our cultures and shape our world by the products and services they create, so a long way from thinking like that. 

I came out of working for a nonprofit organization, I’ve worked overseas for many, many years, came to really the end of myself, and was really sort of tired and came up with this idea of thinking about maybe business, this vehicle that could be used for good. We started thinking about, “How could we get involved with a business that could could help grow it and maybe do some good through it,” which made us think, “Oh, maybe we should start a business because we know nothing about being in business,” so we started with a very, very small idea and because I had been working in Africa in my early 20s and my husband is from Montana. Originally, when I arrived in Montana to be with him, I realized how much synergy there was between Montana, big, wide open spaces and wild places in Africa. Obviously, slightly different wildlife in both slightly but still wild places and so we had this kind of crazy idea of could we recreate the safari experience in America? Could we allow guests to come and stay in amazing, beautiful tents in wild places? We started with this crazy idea of could we get people to come out and stay on his family’s farm and ranch in Montana, and stay in a beautiful tent and that was really the genesis of our idea, which was a good and bad idea all at the same time.

Laurie Barkman:

I understand why it’s a good idea, because it was innovative at the time. What year was this?

Sarah Dusek:

This was 2009 so glamping didn’t exist. It wasn’t a term that people were familiar with. The idea of sleeping and paying hundreds of dollars to sleep in a tent wasn’t something that was on people’s radar. It was just new and novel and we realized quickly that there was definite appetite for staying in unusual accommodation. There just wasn’t a lot of appetite for people staying out on the prairie in the middle of Montana.

Laurie Barkman:

Because you had to get there, not only did you have to service, you would put the tent up and this is like a heavy canvas tent. This is not your typical American family tent that you have.

Sarah Dusek:

Tented hotel for all intents and purposes. We just were really small. We had four tents to begin with and then a location that nobody really was interested in staying in.

Laurie Barkman:

Yeah, so it was location, the key then, you realized that getting people there, even if they were friends and family, they said, “This is great, but you know…”

Sarah Dusek:

Yeah, we quickly realized that we weren’t in the right spot. We had a great idea and there was definitely something to the idea, but we weren’t in a spot that was easily accessible or that people necessarily wanted to travel to get to so we pivoted relatively early on, and started thinking about where were the people traveling to when we were looking at Montana, because that’s our home state. That was when we realized, “Ah, we have two beautiful, amazing national parks in our state, and we get they get a lot of visitors, maybe we should think about trialing this idea near a national park,” so that within a couple of years, we had pivoted to creating our first location in Yellowstone National Park and created the Under Canvas that is known and loved today.

Laurie Barkman:

It’s a known and loved brand, for sure. In those early years, if we describe it from toddler to adolescent, there was a lot of growth of it, and just to give us a sense today, how many employees are in the company? Or how many locations do you have just to give us a sense of size?

Sarah Dusek:

At the end of this year, I think there will be 11 locations. We are throughout the West, and a couple of sites now on the east coast as well, or near or close to National Park destinations and the company has, at the height of the summer, will probably have close to 800-900 employees. 

Laurie Barkman:

Wow. It’s a pretty big company and so we’ll flash forward for the audience so that they know and they’ll certainly hear this in the introduction. I’m not giving it away here, but the company did have an exit, so we’re talking about these early years and the growth years, because these are hard years, these are hard to really figure out. You figured out one big thing, which was location and now, as you described yourself, you hadn’t worked in hospitality. Did your husband ever work in hospitality?

Sarah Dusek:

No, neither of us did. We were complete newbies. We didn’t…we were learning everything the hard way and quickly realized, or it would be really great to get some people in who really know what they’re doing because we really don’t. We just had this vision, we had this vision of creating these Safari style resorts outside national parks across the country and believing that we had something that could scale, that could be replicated in a large way, and had a really unique experience that we wanted to offer and give to people that wasn’t there in the market so that’s what we were excited about, but really just did not know how to operate our own business, and so had to figure out how to efficiently operate our business so we could put those building blocks in place so we could scale.

Laurie Barkman:

Hiring someone from the outside of your experience, was that the key to unlocking that potential?

Sarah Dusek:

That was absolutely the key, yes. We brought on our CEO right after our first year of operating Yellowstone, a year that almost killed my husband and I and we often look back on that year and go, “Well, if we could survive that we can,” because it was…I mean, we had two little children, I had a 10 month old and a three year old and we literally worked 24/7, maybe slept four or five hours a night for four months straight, I think maybe took three days off in that entire four month period so it was extremely brutal. We were woefully understaffed, our product was woefully inferior to what it is today and it was very scrappy, and very chaotic and we just knew that the bones of what we had, there was something there and then began the process of thinking about, “Okay, how do we create some order? How do we create some systems and processes, and how do we build something that’s replicable, and who do we need to bring in to help us make this thing work?”

Laurie Barkman:

At what revenue level did you have that sense that this was going to work? Was it 5 million? Was it a million?

Sarah Dusek:

350,000.

Laurie Barkman:

Oh, wow, you guys said this is something because it was after that summer at Yellowstone, when you were kind of doing it yourselves and you said, “Hey, our product’s decent.” It’s almost like if you hear the term MVP, minimum viable where product market fit is just enough, and then you said, “Okay, we think we have something here at 350,000 in revenue,” in those early days, and then you brought on someone and then you started to build process and then how quickly did this business scale? When did you get to your first million or first 5 million?

Sarah Dusek:

We got our first million that next year. We got to our first 5 million the year after that and incrementally scaled dramatically year after year.

Laurie Barkman:

So the foundation was getting the right people.

Sarah Dusek:

We had a very exponential growth, but at the same time, we took a lot of risks to make that growth happen so we just kept doubling down on our minimum viable product and turning it into something that really had huge traction and looking at, how do we put our systems and processes? How do we be more efficient? How do we scale this up without drastically increasing our overhead because we were self-funding. We were bootstrapping our business and plowing every cent that we were making in the business back into the business to generate growth so it was a super risky strategy, but there was no one who was taking me seriously at the time so we didn’t really have any other strategy. It wasn’t like I definitely could have gone to the bank and got millions of dollars of loans. We got a teeny tiny amount of loans, after one local bank, I finally managed to convince them they could use tents as collateral, because nobody was interested in even believing I had any collateral so it was really, really tough.

Laurie Barkman:

To convince them that tents were the collateral. Were these pretty unique tents? Were they custom to you and patented or something?

Sarah Dusek:

They were they were custom to us. They were designed by us. I guess we had an amazing bank manager who to this day…he enabled our business to get lift off, because if he hadn’t given us small loans and helped us get some SBA loans, we would not not have grown and we would not have probably made it. He just believed in us. He believed in what we’re trying to do. He could understand the product. He just had a vision for some reason. He said yes and that was that.

Laurie Barkman:

Was this a community bank in Montana?

Sarah Dusek:

Yeah, it was a local small bank, local Montana bank, with great people who we built great relationships with and they backed us, and they helped build one of the fastest growing Montana startups that has ever existed.

Laurie Barkman:

Wow, that’s a great commercial for relationships with community banks. We do hear about that, that when you need access to capital as a small business, many times it is your community bank that can have that faith, like you said, and wow, what an interesting…that’s a great story. What were the other things that enabled the business to scale? We talked about people, process, you had some access to capital in the early years, you were self-funding. What about marketing strategy?

Sarah Dusek:

I talk about this all the time, because I now invest in small businesses and one of the things that we are constantly looking for is how do you find your highly scalable growth channel that is relatively low cost? So you’re always looking for, can I find a route to market that isn’t going to cost me the earth? Part of our strategy was when I said we had to go where the people were. We discovered that there was an overabundance of people traveling to national parks and an under supply of accommodation to stay in. Our highly scrollable growth channel was moving into markets where there just wasn’t enough accommodation, and leveraging what was already in that space, TripAdvisor, Expedia booking.com, to enable us to acquire customers. We leveraged what existed and plugged holes where no one existed. It was like trying to discover where’s the hole that I can fit in, and how can I use what’s already out there to push people towards me because I had virtually no money so we were trying to sort of find ways to market ourselves. This is really the days before Facebook. Facebook was sort of 2006, 2005 so the Facebook marketing wasn’t really a thing. Facebook wasn’t monetized so it wasn’t just a case of you throw stuff up on Facebook and boom, you’re an overnight success. It was really just trying to find ways to be in front of our target audience and that’s what I tell people all the time, how can you go where your audience already is? How can you show up in front of them in the most efficient, most cost-effective way to get your products or services seen?

Laurie Barkman:

That’s great advice. I was advertising and Facebook in the early years, so I can empathize with that, because you had to have an edu email in those early days,and that’s I used to say, fish where the fish are, and fish where the online fish are, in the case of e-commerce clients, but in the travel space some of these channels had already existed, and you needed to put yourself in front of them in a cost-effective way so it seems like you did find a way to do that. Was it ultimately through paid advertising or was it more organic content?

Sarah Dusek:

Totally organic, and we realized that what is now known as an influencer, and bloggers that were really more bloggers then and then influencers, but people wanted to come and stay for us so we really harnessed the power of other people’s voices, trying to get our word out, and did everything we possibly could for free to try and get in front of as many people as we possibly could. We looked for every free strategy there possibly was so we doubled down on PR, we hosted as many people for free as we could in exchange for them writing about us and taking photos of us and posting things on referral websites. You name it, we did it back in those days, but just trying to show up as much as we possibly could.

Laurie Barkman:

That is smart, that’s really smart. Also, we’re measuring how cost effective that was and I’m guessing it was then very scalable so they could come on their own, and then stay with you. That had low marginal costs, but then high benefit for the reach and audience that they would get for their travel sites, I’m sure.

Sarah Dusek:

Right. The thing was that if we did a good job, this is often true for most companies, right? If you do a great job, and your guest or your customer has a great experience with you, and they love, they fall in love with you, they’re going to be your best advocate for your product or service, because they’re going to tell their friends and family about you and we definitely had some curb appeal and that definitely helped and people did love our experience, even our very early, minimal viable product experience people loved and raved about, so that was huge for us with getting really great organic traffic.

Laurie Barkman:

That’s fantastic. For the tents, they were unique and as you think about the product you talked about, you’re offering a service, but it’s a product too because of the way maybe you’ve positioned it or packaged up these tents themselves. Did people say, “Hey, can I buy a tent?” Did you think about selling the tents?

Sarah Dusek:

Yeah, we absolutely did. People would say that to us all the time and it was one of the hard decisions we made in the early years of the business, actually, because especially when we were super strapped for cash, we realized, how can we put more money into this business and one obvious way we could done that was sell tents to people who wanted them. We would get calls all the time, say, even for large numbers of tents and we made the decision that because they were unique to us, my husband was our designer, is our designer, that they were the thing that made us unique. It’s like they were part of our special secret sauce, if you like that, made the canvas iconic, because we realized if you stayed in one location, you might stay in another location and we would have a look and feel that was Under Canvas. 

That was a key moment in our growth story really, because we said no to what was really potentially great, a great revenue stream for us believing that it would create more value for the company if we kept something iconic and we kept something that was sort of proprietary to us, and would differentiate us from looking like any other competitor because we knew if we sold them other people will use them to set them up, sell some competition to us, and we wanted to stay looking unique and unusual. That was a hard decision, actually because we were constantly robbing Peter to pay Paul and trying to juggle the bills but it was a super important decision for us to not not sell our one major key asset.

Laurie Barkman:

When did you and Jacob decide to take on outside capital? Was this a concerted decision as you were starting to think about maybe a strategy to sell the company or was it more about operations and how to scale the business?

Sarah Dusek:

This wasn’t really a decision about selling the company because it never even crossed my mind that I would sell the company, but what it was, was a strategic decision, because we realized we were market leaders and we had a really big piece of the market that existed at that time. We just felt this huge sense of urgency to keep growing and realizing that if we didn’t keep growing, someone else was going to take the space that we wanted to own and so from day one, when we made that decision, we’re going to scale this business, we’ve got a minimum viable product, we knew we just had to go as fast as we humanly possibly could. As people say, we were crazy, because we hadn’t perfected the product, we really didn’t have our systems and processes ordered, there was just a lot of chaos in the business, but people thought you’re trying to do too much too fast, trying to grow too fast, you’re gonna grow yourself out of business. I heard that a lot, but I just knew that we had to capture market share and amazingly, a guest stayed with us and we were five years in and she was a venture capitalist in New York, and she said to me, “You really should raise money for this business, because there’s a guy out in New York right now trying to raise money for a business, identical to yours.” He hadn’t started yet. He was at idea stage, and we were five years in, and I was very profitable, doing a large amount of revenue, etc, etc. and I just realized, “Gosh, if he takes on venture capital money, and he has $20 million for his startup, he’s gonna wipe me out. I’m gonna be left in the dust,” so we felt like at that moment in time, I didn’t have a choice. I was like, I could either go on the pace that we were on, which was aggressive, but it was reliant on the cash that we had, or we could decide to take on outside capital, and go faster, go further, do more, and build faster than we could, without outside help. That really catalyzed, so competition in that regard was really good for us because it made us make a decision on what are we going to do now? What do we want? What are we going to do? How are we going to play? We really strongly felt like this market is ours. We don’t want to lose pole position, so I gotta put some fuel in the tank.

Laurie Barkman:

Did you keep the other guy out of the market?

Sarah Dusek:

I did not keep him out of the market, he entered the market and the great thing about him coming into the market, he raised a lot of money. He spent a lot of money on marketing and he really helped build the glamping industry into what it is today, because they spent a whole lot more money on marketing this whole idea of glamping than I ever did so he became a very valuable asset to me in many ways.

Laurie Barkman:

That saying rising tide lifts all boats was true.

Sarah Dusek:

Absolutely, yeah. Very much so.

Laurie Barkman:

Interesting, and this woman that said to you, “Hey, you should take a look at this,” then, did you hire an investment banker? How did you raise the capital? Let’s just talk about that. How did you find the right fit? How did you find the PE firm that was the right fit for this investment?

Sarah Dusek:

Well, at the time, I didn’t know investment bankers existed, I didn’t know really how venture capital worked. I was very green. It was a space that I hadn’t operated in at all so I just didn’t know it existed. She was helpful, and she helped me understand what venture capitalists were looking for and then I started cold calling, and trying to get meetings, and of course, cold calling venture capitalists when you’re not connected? Not gonna happen. I had a lot of calls, it was a lot of tears, because I just got a lot of nose because people didn’t understand us and people kept saying to me, You’re not tech,” and, “Venture capitalists invest in tech,” and I was like, “Well, I know that venture capitalists are investing in this space, because I know my colleague over here is getting meetings,” and I just wasn’t using the right language, wasn’t positioning us in quite the right way, and so I eventually found someone who said to me, “You know what, I love this, and I think I can help you,” and so the idea of paying a broker was like that didn’t sit very well initially either but then when I realized I’m not having any traction, I’m not getting anywhere with finding the right kind of people and getting in front of my people that I need to use somebody to help put me in the right space for who is going to be the right kind of investor for us. That was actually really helpful for us, and really, really powerful with aligning us with the right kind of people.

Laurie Barkman:

Oh, that’s good, and then you had the opportunity to have meaningful conversations.

Sarah Dusek:

Yes.

Laurie Barkman:

Then when it got to the point where you were deciding on taking a deal, did you have multiple deals to choose from?

Sarah Dusek:

I did, yes, and when we finally did a deal, we found a provider that did some debt and equity into our business and that was a super great fit for us because we had a cash flowing business, we didn’t need to go the traditional venture model route, just because we were not super early stage anymore, we had revenue, we were profitable, we had EBITDA and we could service debt, and also very clear metrics around. If we build this and we spend this, we know what this does, because we’ve built them before so we took on an investment partner who did a debt and equity deal with us, which was great because we love debt providers having equity, because then they’ve got skin in the game, and they’re not entirely motivated to just get their debt back. They’re also motivated to try and make their equity valuable at the same time. We had a great, that was our first sort of real, was a very large deal for us at the time. I think it was $14 million that we took on in that first serious institutional investment, sort of post friends and family and early stage debt from banks and angels.

Laurie Barkman:

That’s a pretty big number for bootstrapping all those years.

Sarah Dusek:

It was. It was a very big number when we first took that amount of money on so yeah, it was huge. It was a huge deal.

Laurie Barkman:

Did they get a board seat?

Sarah Dusek:

They did, yeah.

Laurie Barkman:

Was that your first board or did you already have a board?

Sarah Dusek:

That was our first first board seat, so then we had my husband, myself and one investor on our board.

Laurie Barkman:

Okay, so at this point in revenue, how big was the company?

Sarah Dusek:

We were probably doing close to 10 million. Not quite there, but just not just short of 10.

Laurie Barkman:

Sometimes I hear stories where there’s different offers on the table, and the highest number, we assume many times people are gonna take the highest number. A lot of times I don’t hear that to be true. Was that true in your case?

Sarah Dusek:

It was definitely true in our case, yes. We had varying values, I mean, valuation is just a piece of the puzzle, right? Really, what’s significant? What is significant is what you give up today but more significantly is, what do I think I’m gonna get out in the future and so this particular deal for us was extraordinary, because we only gave a little bit of equity away, and took on a huge amount of debt, which was risky for us, I had to secure it, I had to guarantee it so my whole my personal world was totally and utterly on the line. The truth was, nobody was finding $14 million out of them, and I was not worth $14 million so really, I was going bankrupt if we were not servicing that debt so it was a huge risk but that was the trade off that we made with making that decision. Is this what’s the right financial fit for us? That, for me, I think, is a really great question for scaling entrepreneurs, because there’s not one type of capital, there’s not one type of investor. There are lots of different options. Getting options to the table is what investment bankers are supposed to do for you, and that really helped us with them being able to make choices around what could work, and do we like these people? Do we want to be in bed with these people? Are we going to go on a journey together? Is this a good fit? You often don’t know when you make some of these choices, but deciding what kind of deal was right for us was really part of our growth story.

Laurie Barkman:

Absolutely. Let’s skip ahead in the story to when you were deciding to sell. As you said earlier, this wasn’t a company that you were building to sell and that wasn’t necessarily something that you had planned for, but here we are, and you’re at that point in this story. Tell me a little bit about that. What led up to it and did you pursue the sale or did companies come knocking on your door or investment firms come knocking on your door?

Sarah Dusek:

Yeah, we did. We didn’t pursue a sale, but we did get really clear about what we wanted in our next stage of our journey and so we went out after that first round of capital, I did my job as CEO, we deployed all that capital really quickly in one year and we got really great ROI on it and we managed to increase the valuation of our company almost tenfold. I mean, it was extraordinary. We went out, we needed more capital to keep growing the business, we were excited by what we’d already done and thought if we can just put more money to work, now let’s go again. I think because of how much more valuable the company had become, in that sort of 18 month timeline, the offers were completely different than I was imagining they would be and so we didn’t go out to sell.  I wasn’t planning on exiting the company, I was still planning on continuing to grow and scale and do extraordinary things with this company that we had built but we did get really clear about what we wanted going forward in this next phase, because it was like every time you raise capital, you hit a new level and you get clear on alright, what does this next piece of the journey look like? We chose a private equity company ultimately, who were experts in hospitality, because we felt like if we are eventually going to transition out of the business, we certainly weren’t planning on transitioning out of the business, but that we want experts who know how to take this business to the next next level, and do what we don’t know how to do and so that was ultimately why we chose who we chose.

Laurie Barkman:

It was a really good fit from the industry standpoint, the know-how and what they brought to the table. What did that mean for you? What was the ask of you and your husband? Did they want you to stay on? Did they want you to leave?

Sarah Dusek:

Yeah, that was the really hard part for me. I didn’t understand at the time, and I certainly do now, but at the time, it didn’t make any sense to me, because I had a very strong vision and desire to continue growing the company, and a very clear idea about how I was going to do that but it was not…we did not have the same vision around how that was going to unfold and who knows who was right? Ultimately, the company has continued to grow and perform and do exceptionally well. Certainly, a lot of the things that have happened in the last 18 months probably would not have happened if I was still leading the company and good things but it was heartbreaking honestly, just devastating that I was not going to get to continue to stay and lead this company. I led through a transition but it was probably the worst moment of my life. Obviously, it’s like giving birth to a child and we had been with and grown this company from nothing, zero to hero and I wasn’t ready for that journey to end and so it was a very painful era. People often say, “Oh, I bet you made a lot of money,” and then and I say, “Well, you don’t know how much money I took out of the company, because you don’t know how much of the company was left and was mine so you don’t know what that looks like.” Also it was something that I wasn’t necessarily ready for at that particular moment so it was a shock and a grief with transitioning away from the day to day of a company that I loved, was super passionate about, and still felt like there was a very big journey to still go on. 

Laurie Barkman:

It was a shock and you didn’t have a choice. It was part of the deal, right? You had to accept it so it took, you said a year, you were with a company like a year in that transition, or how long?

Sarah Dusek:

I did a year post reducing the majority control of my company. 

Laurie Barkman:

Were you involved in hiring the new CEO?

Sarah Dusek:

I was not.

Laurie Barkman:

That must have been hard too because you knew that was happening on the side? 

Sarah Dusek:

It was probably better for me actually, that I wasn’t, because I still wanted it to be me. 

Laurie Barkman:

You wouldn’t have liked any of the candidates, “No, to everyone.”

Sarah Dusek:

It probably was healthier that I was not part of that process because my head was not in a great space about it. It was emotionally wrenching and I think that’s all I can say about it. It was an extraordinary thing that I didn’t understand that private equity companies have a way of doing something when they acquire a company. I think a lot of us don’t understand the way investment works and that’s why I think conversations like this are super helpful, because the more we can understand how this works, the more power it gives us to understand to make good choices and make choices and ask questions, so I think that’s the reason for talking about it.

Laurie Barkman:

It’s helpful, because yeah, for many people, this is their one chance, right? You’re gonna build your company and sell your company once in your life, most likely so you’ve never been through it. It’s that catch 22 where, how do you know how to do something when you’ve never done it before. A lot of times, we try to listen and learn from others and that’s why I do this show and I really appreciate you coming on. I appreciate being authentic about it. Hey, if people read about you, they’re gonna see you sold your company for $100 million. They’re gonna think, “Oh, my God, she pocketed a lot of money, she’s got to be so happy about it,” and then so often, and you’re not alone, Sarah. There’s lots of data out there that shows that it is emotionally difficult after you leave your business and you’re sharing something very personal, and I appreciate that it is difficult, I’m sure, to think about, and put yourself back in that place. Help us understand, how did you get out of that dark place? How did you say, “You know what, I accept it now, and I’m able to move forward, and maybe talk about your role, as you fashioned it, as the identity shift happened. Accepting the identity shift has taken some time, but in those days, how did you come out of it on the other side?

Sarah Dusek:

Well, I guess firstly, I would say I grieved. I grieved a real loss. I have people I’d been at work with every single day for many, many years. I aggrieved not being in the day to day my business and I didn’t necessarily do my agreement quietly so it was painful for my family and everyone around me but what I have have since learned about myself, and I think all of us experience transitions all the time, when one thing ends, and the new thing begins, that transition is the space in between them. This idea of transitioning is really part of our own growth, and our own becoming, our constant becoming more of who we are able and meant to be. I learned, about myself, that I am not very good at letting go. I’m not very good when I love something, and I’m an all in my heart’s all in kind of person when I’m in and so transitioning from one thing into a new thing was particularly hard for me, which required extensive grieving. 

One of the things that really helped with that was a really strong sense of I definitely grieved the loss of being a CEO, and my understanding of myself in that role, but I realized I had so much more power not only just to affect my own company, but to leverage everything that I had learned to affect many companies. That was one of the things that really helped my own shift and my own transition into thinking about, how do I take the journey that I’ve been on, because it’s really been quite an extraordinary journey, and how do I use that for the good of other women? Because one of the things I realized when I was meeting investors, I barely met anyone who looked like me and I just knew that there was something wrong with the system that says 2% of women are getting venture capital funding today to build and scale their businesses. I am an unusual phenomenon, but I am a woman who has managed to scale and grow a business from nothing, and sell it for over $100 million. There are not that many of me in the world, there is something wrong with that, right? Why should that be the case? It made me realize that, well, women like me, then have to get into the arena and start backing other women to go on that journey and it made me realize I can assist and journey with other women, and put a hand behind me and help other women climb that ladder too, because I genuinely actually really strongly believe that if women had equal access to getting their shot at building great companies, and by that, I mean, they had equal access to capital, and resources and knowledge and power, that our world would look completely different, that the companies that would get built would change the world we live in really quite dramatically. 

We have, for the large part, most companies being built by male founders, and white American male founders and that means those companies dominate our world in a particular way, and moves our world forward in a particular way, and I just really strongly believe that as women, if we get to participate in this world of building we’ll build a better world for all of us to live in more equally, more sustainably, more impactfully, and that we can drive a lot of change and do a lot of good so that was a long answer to a short question.

Laurie Barkman:

It’s very important, because that became your new vision for creating Enigma Ventures and starting a venture capital firm with this mission and with this purpose. At what point did you and your family move to South Africa? How did you decide to focus on that community for your investing?

Sarah Dusek:

When we looked at this, we had this crazy idea of, could we lever ourselves now for the good of women? Could we invest the capital that’s been bestowed upon us, for the good of other women? When we looked at where we were, our family was ready for our own new adventure and when we looked at where we felt like we could make the most impact, we’re big ROI people, how could we leverage our own capital, our own resources, and time, and energy, and potentially get the most return? Thinking about, okay, let us look at emerging markets and Africa is woefully underfunded. Last year alone, when the US deployed $134 billion of capital, Africa managed to deploy 4 billion so we’re on a magnitude of, I don’t know what that ratio is, so how do we deploy more capital into the region? How do we help and train and empower women to really transform a continent that’s really lagging behind in its development? So here we are, investing in amazing female entrepreneurs who have incredible vision to transform their communities in their cities and their nations and build extraordinary businesses that really move the needle.

Laurie Barkman:

That’s exciting. When you meet with investors, you meet with potential entrepreneurs that you’re going to invest in. What are you looking for, given all your experience in raising money and dealing on the other side of the table now? You’re on the other side of the table and these deals. What have you said yes to and what types of things have you passed on?

Sarah Dusek:

Tenacity probably is the biggest thing we look for because you really got to want this. Driving and building big businesses is hard work and you’ve got to be really all in so can we figure out if you are all in or not? Do we think you’ve got what it takes to really do this, and I know how hard as a mother of young children it was to grow and scale a really big business. Can I see it in your eyes that you’ve got some fire in your belly? Are you tackling a problem that’s got a big enough market? Our first early mistake was we had a great product, but it was in a market that nobody really wanted to go to. Are you trying to service a large enough target audience? Could your business be one day worth a billion dollars? Is this a large enough opportunity? Aside from those two big things, do we think we are the right people to have any kind of impact and assist you on your journey? There are definitely some businesses that I have thought, “You definitely could be something and you could be amazing, but maybe I’m not the right one to help you.” Probably a combination of those three big things, really, is this the right fit for us? Are you tackling something really huge that could be really ginormous, and have you got it in your belly to go after it and get it done?

Laurie Barkman:

That’s really awesome. If someone is contacting you from the US, would you say, “We’re sorry, we’re focused on Africa,”?

Sarah Dusek:

Yeah, I am looking at a couple of businesses actually, right now, though, of female African entrepreneurs who are in the States, building businesses, and we’re looking at those two. I just would love those businesses to have some effect on the continent so it can’t be that we’re building something that doesn’t affect Africa in the slightest, but yeah, I’ve got several US-based entities by African founders.

Laurie Barkman:

Back to the founder discussion, if we have founders and owners of companies listening to the show, and they’re thinking about maybe selling their business one day, what would be one thing that you would leave them with?

Sarah Dusek:

One thing I thought that I would leave about selling their business?

Laurie Barkman:

Yeah, if they’re gonna take action on one thing, or something to really consider, as they, in the future, consider selling their company.

Sarah Dusek:

Get really clear on what you want. Asking yourself, what do I really want, was really helpful for giving me clarity. Because if you know you want to sell your business for 100 million dollars, you can figure out, alright, how do I get that done? How do I work backwards from that decision, and figure out how far away is that? What would I have to do? What would my business have to look like? You can work on it. There’s an amazing ancient proverb that says, without vision, the people perish, and I was like, this idea of, can I get really clear on what my vision is, and what I’m trying to do and why. For me, selling our business was never really about making huge amounts of money. It was about, how can I leverage myself to make the most impact, and so the number was a part of that, right? Because of what I was thinking about what we might do next so it was not irrelevant, it was definitely relevant, but getting clear on what matters to you and why it matters to you, that’s the other part. Think about what matters. Ask yourself, why does that matter? What am I really trying to do? Why am I trying to do it, because that can either then super motivate you to make it happen and get it done or not and you can decide, I don’t actually want to sell my business, or I want this business to be a family business, and I want my grandchildren to inherit it, and therefore, we’ve got to do X, Y, and Z to make that happen. Getting clear on what you want, and why, I think is probably the most important thing when you own a business.

Laurie Barkman:

That’s an excellent message. I usually ask everyone a favorite thing about entrepreneurship or leadership, you just shared one, so I don’t know if this one is your favorite if you have a different one, about having the vision, without the vision people perish. Any others that come to mind for you?

Sarah Dusek:

That’s definitely one of my favorite thoughts. Yeah, let’s stick with that one.

Laurie Barkman:

That’s a great example. Well, we’ve talked about so much today, Sarah, and if people want to connect with you after the show, what’s a great way for them to find you?

Sarah Dusek:

Absolutely. You can find me on LinkedIn, Sarah Dusek, or through our website enygmaventures.com.

Laurie Barkman:

Well, thank you so much for joining me today on Succession Stories, Sara. Listeners, thanks for tuning in. 

Sarah Dusek:

Thank you.

Laurie Barkman:

Listeners, thank you so much for tuning in. You can always catch Succession Stories on any of your favorite podcast players or YouTube. Don’t forget to like and subscribe to the show! If you want to maximize the value of your business and plan for future transition, reach out to me for a complimentary assessment at meetlauriebarkman.com. Tune in next week for more insights from transition to transaction. Until then…here’s to your success. 

My objective is for you to have a lucrative and successful succession. If you want to understand the value of your company today, the potential net proceeds of a transaction, and your financial needs after you leave the business, that’s a great place to start. The sooner you understand these numbers, the more time you’ll have to close the gap, if there is one. Take the next step by requesting an initial meeting to begin planning for your business transition and strategic exit today. Request a call with me at meetlauriebarkman.com.

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