After almost two decades leading Big Ass Fans, Carey Smith decided to sell the Lexington, Kentucky-based industrial fan business and move into a role at his part-incubator, part-venture firm, The Kitchen. Smith tells Inc. why he felt few emotional ties to the company he'd built up, and how he determined a selling price--seemingly out of thin air.
When did you start thinking about selling the company?
When you're running a company, you're not thinking about selling it. Some people asked, "What's your exit strategy?" and I was like, "What the hell are you talking about?" As we grew, private equity firms were constantly knocking on our door. What I wanted to know was: Can you help me grow this business? But they had no interest in that. So there was a disconnect. Finally, 18 years after we started, I mentioned to my COO that I was frustrated. I said, "I'm just tired of this stuff."
How did you land on $500 million as the price you wanted to sell for?
Selling was not something I intended to do, and that's why I picked that number. It wasn't related to anything. It seemed like a good number. So, if someone said, "I'll offer you $499 million," it's like, "Hey, I've got an idea: Fuck off. The only number I'm interested in is $500 million. I'm not gonna dicker." And we didn't.
How particular were you about choosing a buyer?
At the end of the day, though I really cared for the business, it's not my child. You always love the people, but fans are a product. We wanted to make sure the buyer didn't simply open the doors and tell everybody to leave. But other than that, it's like buying a stick of gum: It's mine until you pay me for it--and then it's yours.
Did you have any misgivings about selling to private equity?
The thing about private equity investors is that they all say the same thing: "We really respect what you've done. We want to continue growing it, because we want you to be proud of it." But they have an interest in making a return. There's nothing wrong with that--it's just a different type of business. They're bankers. The most boring people in the entire universe. It's like if you went to the undertaker and you were picking out a casket, and they were trying to convince you that they really care about your afterlife. Give me a break. You're just putting people in the ground.