From Startup to $40M Exit – And We’re Still Just Brothers - Moneywise Recap

Podcast: Moneywise

Published: 2025-02-11

Duration: 44 min

Summary

Chris and David Sinkinson discuss their journey from founding their company, Armour, to a successful $40 million exit, emphasizing the importance of collaboration as brothers in navigating the complexities of entrepreneurship and investment.

What Happened

In this episode, hosts Harry Morton, Chris, and David Sinkinson dive into the incredible journey of the Sinkinson brothers, who founded and scaled their business, Armour, before exiting with a lucrative deal worth $40 million. The conversation reveals the dynamics of their close partnership, both as family and co-founders, while addressing the common challenges that many post-exit entrepreneurs face, such as maintaining perspective and managing family relationships. Harry highlights the unique aspect of their collaboration that helped them thrive, as they both brought different strengths to the table.

The brothers share insights about the acquisition process, detailing how initial offers can fluctuate and the importance of timing. When the pandemic hit, they experienced a significant pivot that ultimately led to a second negotiation with the interested party, resulting in a doubled offer. They explain how their decision-making process was influenced by their exhaustion and the performance of their company. Chris and David also touch on the complexities of equity in cross-border transactions, particularly as Canadian citizens selling to a U.S. company, and how that impacted their financial outcomes following the sale.

Key Insights

Key Questions Answered

What was the process of the Armour acquisition?

Chris and David detail how they initially received a $20 million offer from a company, which they felt was low given their software business's performance. After a strong quarter during the pandemic, they revisited the offer and successfully negotiated it up to $40 million, highlighting the fluctuating nature of acquisition deals based on market dynamics.

How did the pandemic affect their business negotiations?

The pandemic presented both challenges and opportunities for the Sinkinson brothers. Initially approached before the pandemic, the deal was put on hold as they experienced an unexpected pivot that significantly improved their business performance, leading them to re-engage with the potential buyer and ultimately secure a better deal.

What is phantom equity and how did it impact their exit?

During the sale of Armour, Chris and David discussed dealing with phantom equity as Canadian citizens selling to a U.S. company. They were offered a promissory note as a legal instrument that would grant them a percentage of future sales, which ultimately complicated their financial return from the acquisition.

What are the key challenges post-exit entrepreneurs face?

Chris and David emphasize the need for grounding and managing family dynamics after an exit. They shared their experience of maintaining a balanced relationship and supporting each other through the transition, which is a common hurdle for many entrepreneurs who navigate life after a significant business sale.

What investment strategies do Chris and David follow?

The brothers collaborate closely on their investment strategies, with David often relying on Chris's expertise. David shares that he trusts Chris's insights, especially when it comes to identifying lucrative opportunities, such as his successful investment in Shopify, showcasing the importance of teamwork even in personal finance.