He Sold 4 Companies for $1.5B. The $13M Exit Changed His Life.

**David Royce** (0:00)
Most people think that the Aptiv sale was the amazing one and the life-changing one.
It wasn't. The one that was life-changing was the first one, because when you're going from having basically nothing because you've invested everything into your business, and then suddenly you have $13 million come in.

**Daniel Berk** (0:18)
My guest today is David Royce. He built four pest control companies, which were all in the same industry, but each one that he sold was bigger than the last. The first exit was 13 million, and the last was hundreds of millions personally, sold for 1.5 billion.

**David Royce** (0:34)
The real answer is just a little more. Because whatever you had, you think it's solid, and then over time you're like, well, I want this or I want that.

**Daniel Berk** (0:43)
David has hit four different versions of that number. The idea that the baseline sense of enough keeps moving up no matter how much we accumulate.

**David Royce** (0:51)
If you think that the end is going to be the best thing or having a big exit, I think the summit is going to disappoint a lot of people. Because then you're kind of stuck with yourself and you're going to realize it probably didn't solve every problem you thought it was going to solve.

**Daniel Berk** (1:04)
In this episode, David walks through every exit, which includes the exact mechanics of how he structured the sales, what he actually took home after taxes, why he kept restarting instead of just building one and taking that to the moon, his full portfolio breakdown, including where he puts some of his private investments.
And then we get to some emotional stuff, like his father almost dying in a New Orleans hospital, and what he was able to do because of the money he had for his dad. This is Moneywise. I'm Daniel Berk. Here's David. The first question I'll ask, really about the four companies you've sold. I would love to understand what companies you've built and why you ended up selling them. And if you could walk me through those exits, what that looked like for you personally. And then also tell me about the numbers. What did you actually personally make from those different companies?

**David Royce** (1:54)
Yeah, so the first company was a lot of like being in a lab and just learning what was working, what wasn't working. I had sold pest control before, services door to door, but I had not actually run pest control operation. So I did that for four years. And one of the reasons I sold, I realized that money was really important. In fact, I almost bankrupt the company the first year that I started. I learned that you could be killing it and dying at the same time. Part of it had to do with the way we were paying out sales commissions. We paid more of the sales commissions up front than what was actually coming in. And so it was just a cash flow issue, luckily. We were doing so good that we were actually hurting. And so I had to convince a few salespeople to take their commissions a month or two out if I paid them 10% interest on their money. That's how we got through those tough times. But I realized that cash was king. That was the key to be able to grow. And I was either going to have to slow growth it, or I could sell the business or a portion of the business off and then use that capital to throw into the next one. So what I did is I went to Terminix, they're the largest pest control company in the United States. And they actually asked me, they said, can we buy just the customers along with the technicians?
We don't know the sales thing that you're doing, the door door thing seems really hard to do. You can keep that if you want. If you want to keep a key person in each location, that's fine too. And so basically, I sold the first one, I had NDAs, but Forbes, I quote Forbes, they said, I sold the first one for $13. So now instead of the $300,000 I'd saved throughout college, through my sales commissions, instead of starting with $300,000, I had millions of dollars to be able to throw into the next one.
And the next one was Eco First, that one was built into four different states initially. It was like, can we keep it together?
We really had focused on just learning how to build a model with the first one, with the first company. The second company was, can you actually scale, can you find great people to do it the way we did it previously in Southern California? And then roughly three or four years later, sold it again to Terminix, but only sold off the assets. So the secret to my success was really these asset deals that I was doing, and it's not completely unique to Pest Control Services. I've seen it done with Alarm Systems. I've seen it done with other companies, Solar.