Built to Sell Radio Ep 493 Exit Story: Selling a 20-Person Agency for 5.5x EBITDA
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May 9, 2025 Jeff DeGarmo, the co-founder of Cubic, shares his journey of building a 20-person marketing agency over 16 years and selling it for 5.5x EBITDA. He reflects on the challenges of transitioning from military service to entrepreneurship and navigating complex negotiations. Jeff discusses how his agency evolved from a web-focused firm to a full-service agency, emphasizing the importance of recurring revenue. He also addresses the emotional journey of selling a business and his commitment to empowering veterans in entrepreneurship through coaching and resources.
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Early Agency Origins
- Jeff DeGarmo started in web development after Navy service, initially working alone after losing his contract post-9/11.
- He and a business developer friend rented a small basement space and built a successful partnership that led to founding Cubic in 2003.
Niche Focus Builds Recurring Revenue
- Focusing on a niche, like Chambers of Commerce websites, helped Cubic gain recurring revenue, which sustained the business.
- This recurring revenue allowed them to explore other service opportunities and grow steadily over time.
Growth Before Sale
- Cubic grew to about 22 employees and over $4 million in revenue before deciding to sell.
- They aimed to grow to 50 employees to attract bigger clients but felt limited in organic growth.