Built to Sell Radio Ep 482 Exit Story: Bob Gilbreath — "The Adult Version of the Marshmallow Test" and How to Capitalize on an Earn-Out
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Feb 21, 2025 Bob Gilbreath, an accomplished entrepreneur, shares his insightful journey through two successful earn-outs in service businesses, transforming a perceived gamble into financial triumph. He discusses strategies for motivating teams amidst high stakes, the evolution of his digital agency, and the pivotal partnerships that fueled growth. Gilbreath emphasizes the emotional complexities of transitioning from independence to corporate life, highlighting the importance of relationship building and personal growth during the earn-out process.
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Bridge Agency Earn-Out Success
- Bob Gilbreath co-owned a digital agency, Bridge, which grew from $10 million to a $50 million earn-out deal mostly tied to future performance.
- The earn-out structure motivated the team equally to push for the aggressive growth targets over five years.
Earn-Out as Adult Marshmallow Test
- Think of an earn-out like the adult marshmallow test, requiring patience and self-control to wait for a bigger payout.
- Reframe the challenge to survive the emotional grind by focusing on long-term value instead of short-term discomfort.
Incentivize Key Employees
- Incentivize key employees with profit sharing and phantom equity pools to keep them motivated through the earn-out.
- Spread equity-like rewards broadly to align the entire team’s interests with the earn-out goals.