Where are they now? Interview with Dave Will of Peach New Media

In this second installment of the Where Are They Now? series — in which I interview founders and CEOs of companies that have moved on after negotiating a merger, acquisition, or investment — Dave Will, co-founder of Peach New Media is featured. In February 2015, Abila acquired Peach New Media.

Q: Because M&A deals are shrouded in secrecy before the papers are signed, some were surprised by your decision to sell Peach New Media to Abila. What’s the story?

To be honest, it all came together so fast, even I was surprised. I had no intent on selling Peach when we were having so much fun and the business was doing so well. I used to get calls regularly from Investment Firms, but just about all of them are just trying to get a feel for who you are. Generally, they’re looking for a cheap buy. When AKKR called, they explained who they were and that they had bought Avectra just prior, so right away, I knew these guys knew our business and the industry. I was also in talks with another firm that had similar interests and connections in the association space, but AKKR’s positioning in the market with Avectra made it a good fit for Peach.

I continued the conversation, still not expecting it to actually happen but we continued down the road past the “Letter of Intent” and into the very intense process of “Due Diligence” and every time we passed one milestone we charged to the next. All the while, I was expecting things to fall apart and I was going to continue to drive the business to greater heights as a self funded entity. But things didn’t fall apart.. It just kept sticking together.

Ultimately, the decision came down to a few things:

  1. Was this deal going to be better for the business than if I were to continue running it myself? The answer was a resounding YES.
  2. Were my Peaches going to be taken care of and given greater opportunities than if I were to continue running the business myself? The answer was YES, with the caveat that I knew there would likely be 2-3 cuts with overlapping finance and administrative roles. I also knew there would be some culture changes, but that’s the nature of business.
  3. Was this going to be good for our clients? The answer again was YES, however, change is hard and I expected a little turbulence at the point of change.
  4. Finally, was this good for my family and me? The answer was YES. The truth is, after 14 years of blood, sweat and tears, the idea of sending my baby off to grow while I tried something new was appealing.

Q: Why are M&A deals so hush-hush before they’re announced?

Because most of them fail. Even after the “Letter of Intent”, which is basically an offer letter, something like 60% or 70% still fall through. There’s a ton of fear of change within the company as well as among the client base. It’s difficult when you’re typically transparent with everyone as I am, but it would be much more difficult managing the fear, especially since there is such a good chance of the deal falling through all together.

I did make the decision to tell people in my company before the deal was done. I don’t know if that was the right decision. I like to keep people in the loop and I needed their help in some ways, but it did raise a lot of fear and questions that I didn’t know the answer to. It became very distracting over the 6 month negotiation and diligence process.

Q: What are the biggest benefits that Peach customers have gotten from the acquisition?

  • Existing NetForum customers over time will have one team to work with along with a nicely integrated system. Although the systems need to be flexible enough to integrate with any platform, having the inside teams working so closely on a daily basis is a huge advantage for the customer. It also gives customers a really nice bargaining chip when investing in both platforms. It ay take 3-4 years before everything is working smoothly, but all in all this is a long game.
  • The other benefit for the entire market is an investment in the platform. Where a small business has to grow on it’s earnings, a business with investors has much greater access to funds to support really amazing initiatives.

Q: Have Peach customers suffered in any way since the sale?

Of course. Change is hard and leads to some disturbance. There are distractions among the stakeholders. There are new processes being put in place. Some customer contacts may change roles or leave all-together. Over the course of the last 2 years, most of our executive team has left, so there are some disturbances. And that’s tough.

The question I would ask is, what would have happened if we didn’t embrace change? Not just here in this particular circumstance, but in everything we do. If we let the fear and discomfort of change rule our decisions, there would be very little innovation, not much competition and we would all live in gray cinderblock buildings. Capitalism thrives on change and innovation. We have to accept the bad with the good.

Q: On a personal level, what was it like to sell a business that you’ve spent most of your working years building?

It was the greatest moment of my career. It was total validation that what we’ve been working on so hard all these years actually created value. The proof of value in business is often signified by dollars. Things that don’t offer value have no dollar value and things that deliver great value to the world have significant dollar value. So to have a firm offer life-changing dollars meant we were successful so far at creating a business that had made significant positive change for our industry. The transaction was over 2 years ago as I say this, but I still think back to the days 15 years ago when I was wallowing in massive credit card debt, with a double mortgage trying to figure out how I was going to come up with the money to hire my first employee that I desperately wanted to hire. I enjoyed every moment of the 14 year journey with my Peaches.

Q: You’ve recently started a new company, PropFuel. Give us the elevator pitch.

13% of people love their jobs. That means that 87% of the population wakes up monday morning and drags themselves into work. It’s the same 87% that are at risk of leaving if your competitor calls with a fraction increase in compensation.

PropFuel (www.propfuel.com) is a monthly subscription software for businesses who want their employees to love their job. It’s a weekly pulse survey that collects all kinds of feedback from your team so that you’re constantly focused on creating an environment where they can thrive. Part of that includes peer to peer recognition which encourages your team to give each other props when props are due.

With the analytics in PropFuel, you’ll be able to address the little things early before they become bigger issues. You’ll be able to identify aggregate data about your team’s happiness as well as drill down to the individual level to find out what’s going on with each person.

PropFuel will have your team coming to work “on the balls of their feet climbing the stairs two at a time”.

Q: Why do you think investors are increasingly interested in the association technology market?

It’s an untapped market with a lot of inefficiencies. Translation: there’s a lot they can fix and make more valuable in a short period of time. They can also relate the Association world with other verticals. For instance with Software Brands now being the mothership of Community Brands, that one company is using efficiencies to play in Associations as well as Non-Profits, Churches and corporations.

Q: Any predictions on what the next year will bring in the way of investment and M&A activity in the association sector?

With all the turbulence over the past 4-5 years, I would guess that things are going to slow down a bit and we’re going to see massive innovation. I’m sure there will be more acquisitions announced in the months to come, but we’re going to start to see the associations really begin to thrive based on the added value. As 3-4 years goes by, the acquired organizations will have been able to execute some of their longer term plans and we’ll start to see some of the earlier acquisitions really blossom. But, we’ll also see some new entrepreneurs enter the market filling in the gaps and taking advantage of the turbulent market. So look for the small startups if you’re tired of the big guns.

Author: Ben Martin, CAE

Chief Engagement Officer at Online Community Results, and Founder of theNIRD.org.

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