After the Sale

Roundtable members (in order of year of sale):

Bernard A. Goldhirsh Age 50. Founded Sail magazine, 1970; sold to Meredith Corp., 1980, for estimated $12.5 million in cash. Approximate revenues year prior to sale: $8 million. Founded INC. magazine, 1979. Launched High Technology magazine, 1981.

Dodge D. Morgan Age 58. Founded Controlonics, manufacturer of electronic communications products, 1971; sold to Dynatech for $37.5 million in stock, 1983. Approximate revenues year prior to sale: $26 million. Purchased Maine Times, a weekly newspaper, 1985. Performed solo, nonstop circumnavigation of the world on 60-foot American Promise, 1985 to '86. Wrote book, The Voyage of American Promise, 1989.

John S. (Jay) Wurts Age 42. Cofounded Management Decision Systems (MDS), developer of advanced software, 1970; sold to Information Resources for about $47 million in stock, 1985. Approximate revenues year prior to sale: $27 million. Unemployed, 1985 to '88. Hired as chairman and CEO, Symbolics, 1988.

Stanley I. Kravetz Age 57. Purchased The Frye Boot Co. from Alberto-Culver, 1985; sold to Reebok for an undisclosed sum, 1987. Approximate revenues year prior to sale: $15 million. President of Rockport, a division of Reebok, 1987. Created consulting firm The Kravetz Group, 1988.

Eric Kriss Age 41. As member of venture capital team, began MediVision, a national network of eye-surgery centers, 1984; sold to Medical Care International for about $90 million in cash and stock, 1989. Approximate revenues year prior to sale: $50 million. Became president and CEO of Manson Kriss, a lingerie manufacturer, June 1, 1990.

The five entrepreneurs who, at a roundtable this spring, agreed to air their experiences in INC.'s pages, share one significant event -- the selling of the multimillion-dollar company that each built. As ex-owners now confronting the what-to-do-next dilemma, however, their paths diverge markedly. One spanned the abyss by having started a second business even before the sale of the first. Another chose to sail alone around the world. A third opted to go to work for a large international concern, then quit to establish his own consulting firm. A fourth couldn't find anything challenging until, some 30 months later, he took on a turnaround try. A fifth -- the gathering's most recent seller -- was still undecided at the time of this discussion. What is most striking, however, is that their candid introspection reveals that parting with an owner-operated company is no simple matter, despite the lavish amounts of cash and freedom that result. As the following candidly discloses, there's apt to be remorse before the sale, a sense of loss in the doing, and pain and self-doubt in the aftermath. (The session was conducted by senior writer Robert A. Mamis.)

INC.: What was the toughest interval -- deciding to sell, or right after the sale, or a lot later?

KRISS: For me it wasn't after I sold the company, it was the six months before I sold when I knew it was going to happen and I was stepping out of an operating role. It got so painful that three months before the deal actually closed, I moved out of my office. I didn't go to work anymore.

MORGAN: I moved to an office in a house about five miles away from the plant when I brought in my replacement. There was no way I could stay around for my own health -- and for his.

WURTS: I wish I could have done that. I negotiated the deal and that was a lot of fun. I worked a week with the chairman of the new company figuring out which positions to put people in, and then there was nothing. The deal hadn't closed; there was another month before we got SEC approval for the stock registration, and there was nothing to do except pray the deal didn't fall through.

GOLDHIRSH: I had a hard time making the decision. In 1978 I asked students at the MIT Sloan School to do a study for an idea for a business magazine. When they confirmed what I suspected -- that there was a market for a magazine serving the entrepreneurial subset of the economy -- I decided to launch it. I thought I should sell Sail, but it was hard because I was so emotionally involved with it. I couldn't decide, so I went and sat on a beach in the Florida Keys for a while, just sat there with no distractions, and found myself oscillating. I could do it rationally but not emotionally. But once I made a decision, it was done.

WURTS: I had a much harder time before I did it, too, agonizing over what would happen. Afterward, I felt liberated.

KRAVETZ: It's the best thing that's ever happened to me. I don't regret for one second having sold.

INC.: After you sold Frye Boot, you went back on salary. Did that feel strange?

KRAVETZ: My feelings about selling my company have to do with how I bought it. I wasn't on a Florida beach; I was in California sitting around a hot tub with friends and drinking cabernet. I was working for Timberland then, but I'd always had a feeling for how to run Frye Boot. I watched its demise over the years: it used to be an $80-million business, now it was passing through $25 million. They kept making the wrong product at the wrong time. I called the chairman while I was in the tub. "You've got a problem, and I'm prepared to solve it -- I'll buy Frye Boot. But I won't spend a dime of my own money. You'll have to float everything." To make a long story short, he sent his plane for me, so I knew he was in lots of trouble. So I bought the company.

INC.: And when did you decide to sell?

KRAVETZ: Eighteen months into it, I got a call from [Reebok founder] Paul Fireman, whom I had worked for before. He said, "Give that company back to the Indians and come to work for me, I got a great deal for you." Still, I couldn't. I had brought people with me, and I owed it to them to stay with it. He said, "You're going to go down the tube with that thing." My $100,000 weekly payroll kept mounting, and I kept weakening. Six months later I sold. I got a pretty good package and went to work for Reebok. The whole thing was a rather modest interlude, one might say. You couldn't get me to be an operating guy again for anything!