Ep 488 Exit Story: Garren Hilow on Selling for $190M, Taking Stock, and Missing His Earn-Out
Apr 4, 2025
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Garren Hilow, co-founder of Abveris, shares his incredible journey from a bootstrap startup with a small stake to a $190 million all-stock sale. He discusses the challenges of co-founding a biopharmaceutical company, overcoming financial hurdles, and successfully navigating the complex sale process. Garren reflects on the emotional turmoil of a botched earn-out and the lessons learned along the way. He also finds joy in personal triumphs post-sale, like acquiring a fishing boat and appreciating family moments amidst the ups and downs of entrepreneurship.
Garren Hilow's journey from co-founding Abveris to selling it for $190 million highlights the critical importance of aligning a company's vision with its leadership.
The transition to a productized service model not only streamlined operations at Abveris but also demonstrated the company's sustainable growth potential to prospective buyers.
Hillow's experience emphasizes the emotional and mental challenges faced by entrepreneurs post-sale, underscoring the need for prioritizing personal well-being alongside business success.
Deep dives
Founding Averis: The Journey Begins
Averis was co-founded by Garen Hillo as an antibody discovery service company, catering to the pharmaceutical industry. The business was bootstrapped with a modest $200,000 investment from his co-founder's parents, which is significantly low for the biopharma sector. Initially slow to grow, the company eventually expanded its workforce from just three employees to 45 over eight years. Hillo emphasized the importance of outsourcing research and development to help pharmaceutical companies efficiently advance their drug discovery processes.
Navigating Partner Dynamics and Buyout
As the business matured, Hillo encountered fundamental differences with his co-founder regarding the company's vision and future direction. After a competitor threatened to establish a rival company, Hillo realized he needed to buy out his partner to align the company's goals with his vision of growth. Over the course of negotiations, he offered increasing cash amounts until ultimately settling on a deal involving a mixture of cash and personal guarantees to cover the debt. This complex buyout involved Hillo personally guaranteeing significant debt linked to the business, illustrating both the financial risk and commitment required to take control.
Scaling for Success: Building a Sellable Business
After gaining full control of Averis, Hillo focused on scaling the business efficiently, aiming to make it more attractive for potential buyers. He successfully secured funding from non-professional investors, allowing for the advancement of new technologies and hiring top-tier scientists. Hillo implemented a strategy of productizing services, creating tiered options for clients that simplified the sales process. This shift not only enhanced revenue growth but also demonstrated to potential buyers that the business could thrive independently of his direct involvement.
The Sale Process and Unexpected Challenges
As Averis reached an annual revenue of between $8 and $10 million, Hillo decided it was time to sell, capitalizing on a booming market for biotech and antibody services. He hired a professional investment banker who guided him through a comprehensive marketing process, resulting in multiple offers that significantly exceeded his expectations. However, at a pivotal moment, the leading bidder unexpectedly withdrew, citing concerns related to the company's performance and its intellectual property structure. Hillo's response to this sudden downturn was crucial; he had to re-navigate the market while maintaining the confidence of the remaining bidders.
After the Deal: Burnout and Lessons Learned
Following the sale, Hillo experienced significant burnout, attributed to years of intense pressure and responsibility for both the success of Averis and his family's well-being. The financial aftermath of accepting stock in lieu of immediate cash also added emotional strain as the company's stock value dropped significantly. During this time, he learned valuable lessons about the emotional toll of entrepreneurship and the importance of taking care of one's mental health. This period of reflection and recovery ultimately led him to prioritize his family's happiness and well-being in future endeavors.
When Garren Hilow helped start Abveris, he didn’t have much—just a background in sales, a co-founder with a Harvard PhD, and a stock option representing 16% of the company.
Eight years later, he bought out his co-founder, bootstrapped the company with bank debt (collateralized by his house), and sold it in a stock deal that peaked at $190 million.
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