Ep 453 The Small Business Acquirer: Inside the Mind of Kristi Herold

**Colin Morgan** (0:07)
Hi there, and welcome back to another episode of Built to Sell Radio, the podcast designed to help you punch above your weight in a negotiation to sell your company. I'm the executive producer, Colin Morgan. Now, before we jump into today's show, I ask that you just take a moment to subscribe if you're not already subscribed to the podcast and leave a rating and review. Ratings and reviews truly help our show grow and get in front of more business owners just like you. And if you leave a rating and review as a thank you, you can take a screenshot, send it over to Colin at Built to Sell. And I'm going to send you John Warlow's latest book, The Art of Selling Your Business, absolutely free. Again, just leave a rating and review, take a screenshot, send it over to Colin, C-O-L-I-N at builttosell.com and I'll send you a free copy of The Art of Selling Your Business. OK, now back to the show. Now, you know, most people hear about spectacular acquisitions made by strategic acquirers or giant private equity groups.
We've covered many of them right here on the show. But the reality is, you're likely to sell to a smaller business in your sector that nobody outside your industry has ever heard of before. So today we're diving into the world of small business acquisitions through the experiences of Kristi Herold, the founder of Jam, a Toronto based company that connects people through adult recreational sports leagues and corporate team building events. Now, although Jam is relatively small, Kristi has successfully acquired 11 companies. Now, by getting inside the mind of an acquirer like Kristi, you're going to learn what small business buyers really look for and how to make your company irresistible. Plus, you'll discover how to negotiate deals that protect your interests and maximize your take when selling to another small company. Now, as a reminder, this is part of our Inside the Mind of an Acquirer series, giving you the insider knowledge you need to successfully sell your business. Now, I'll put links to the other episodes in the series over in the show notes section associated with Kristi's episode page, which you'll be able to find over at builttosell.com. Now, without further ado, let's dive into today's episode. Here's our conversation with small business acquirer, Kristi Herold. Enjoy.

**John Warrillow** (2:26)
Kristi Herold, welcome to Built to Sell Radio.

**Kristi Herold** (2:28)
Thanks so much for having me, John. I'm excited to be here.

**John Warrillow** (2:30)
Yeah, it's great to have you. Today's gonna be a special episode for us, because typically, as you know, we interview entrepreneurs who've sold a company. But the reason I wanted to reach out to you is because you are in the midst of not only building a company, but you're also doing that through acquisition. And a lot of our listeners are curious about selling to another business owner.
You know, they've considered selling to a private equity group. They've considered selling to a giant corporation. And they kind of see pros and cons to both of those scenarios. And so increasingly, they're fielding calls from other business owners who are curious about whether there's a partnership or an acquisition in play. And so I wanted to get your head into your head as someone who's done some acquisitions about how you think about acquisitions and why you chose that as a business strategy. But before we get too deep into that, I want you to explain the company. So what does Jam do?

**Kristi Herold** (3:29)
Okay, so Jam, I started Jam in 1996, so 28 years in now. It was originally called the Sport and Social Club. I started it in Toronto initially as a lifestyle business, and it's adult rec leagues. So think of it as inner murals for adults, people who are no longer in college or university. They've graduated, but they still want to connect and have some, you know, play some basketball or softball, ultimate frisbee, dodgeball, that kind of thing. So initially, that's what I started the organization as in 1996 And for 20 years, I grew it as a lifestyle business, had a great team, nice study, organic growth. I had three kids during that time. I didn't want to scale. I didn't want to own the world. I just wanted to have a great lifestyle business, and that was accomplished. By 2016, bored out of my mind, needed something different. And my kids were growing up. They didn't really want me coming on field trips anymore with them. And so I was like, I need a new challenge. And that's when I decided, hey, we should grow the sports leagues into some other cities. And we had done some organic growth. And I remember thinking, at one point, I was thinking, maybe I'll sell this company and do something totally different. But then when I stopped and thought, well, what actually brings me the most joy? I realized what brings me the most joy is when I see people out playing soccer and flag football and softball. It actually, it just fills me with so much joy when I know they're out there being physically active and having great social connections with friends because of the work me and my team were doing. So at the time, we probably had 50, 60,000 people playing with us every year. And I wrote down the number, one million people playing. That was the legacy that got me excited, is how can I get a million people playing every single year? And I know it seemed, like it still to this day seems a bit crazy. It seems like a massive goal. We're still a ways from getting there. But that became the new vision. I shared that with a couple of my teammates, my business partners, and I was like, they were like, sounds great, but how? And I said, I don't know yet. Like, we'll figure that out. And so then it became looking at organic growth, franchising, or mergers and acquisitions. Organic and franchising both seemed a bit slow. And I knew there were already leagues like ours all over North America.