Exiting a Business Advice


With more than 20 years of experience in the mobile and digital marketing industries, Craig Massey has proven to be an expert in the field. He has founded and exited four technology companies and is now founder and CEO of DanDan Digital, a company that offers digital marketing expertise to SMEs. Massey also takes the time to mentor and invest in startup technology companies in the mobile sector.


What were you doing before you started your first successful business?

I worked for three FTSE100 companies: Polycell, Redland, and Stena Line, which is a Swedish company. It was during the Stena Line years that I came up with a good idea. It really started to take off, so I invested £48,000 of my own savings and started my first company.


What was the first business about?

Select Incentives was just special offers and discounts in a little booklet. I printed it in major brands like NatWest Bank, Metropolitan Police and London Underground. I printed voucher booklets, provided them to the HR departments, and they distributed them to all their employees. But believe it or not, my print room was producing about 2 million booklets each quarter. It was a pretty substantial print room, but it was costing a fortune to do all the printing. That’s when I changed it into an online company and I called it Intra Extra – it was about special offers and benefits on intranets.


What happened to that business?

I sold it for a Golf GTI, I think. I worked for 2 years, 7 days a week, 14 hours a day… I was burnt out and the guy wanted to take it off my hands and he offered me a brand new Golf. So I sold my company for a car.


Can you tell us a bit more about your second venture?

I sold the paper version, Select Incentives, and kept and retained Intra Extra, the digital version. That was back in 1999, when it was the dotcom crazy boom. There was a company in San Francisco called Pokes at Work. They were two guys fresh out of Harvard Business School and they had raised $97 million! So I contacted them, went over there and I sold my company to them for a quarter of a million USD. It was a very quick kind of flip, and I stayed with them for a year. I was on great salary, but, of course, then it all went horribly wrong with the dotcom crash.


What was your third business?

That was a much better business. It was well thought through and really quite clever. Again, it was kind of opportunistic, but I met an Italian guy at a dinner party who was a Mensa member. He was a doctor and a genius at mobile, a very smart guy clearly. We just got talking and we decided to create a company called Brainstorm. We were the first guys to do daily text alerts, like the horoscope of the day, the joke of the day, the recipe of the day… It sounds crazy now, but back in the day it was leading-edge technology. We started doing mobile content way before anybody else.


Last Second Ticket was the last business that you exited with. Can you tell us more about it?

What was interesting was that we essentially combined two companies together: my voucher codes and Last Second Tickets. Together, they formed a discounted offering via mobile phones. That proved to be very interesting to a company called Monitise. They had all the technology and they wanted to do transactions, but they needed people to be able to purchase things on their mobile phones in order for them to use the Monitise technology. So I suppose by being part of the bigger entity, it made it possible for me to sell my company for £12.3 million.


What was the most difficult and challenging moment and how did you deal with that?

That must have been my exit with Brainstorm. It’s now worth about £20 million as a company so it’s doing really well, but I made almost every single mistake possible in terms of an exit. I sold too soon for £3.2 million to the wrong people, and, ironically, I thought I was being very clever. I had heard that Upper Telecom was about to get bought by 3i of which, or so I heard, had really weak mobile technology. So I approached the CEO of Upper Telecom and told him they could get a higher valuation if they owned our mobile technology. But I was also talking to other people in the mobile industry. And then, on the same day, I got two offers: one from Upper Telecom, and one from Sponge, which was a lot lower.

Now, the team and I loved Sponge better, because Upper Telecom was a bad fit and they were horrible people to deal with. But the problem was that I had venture capital guys who owned 25% of my company and who bullied me into doing the deal with Upper Telecom, because it was bigger. And how these things transpire! Not a mere six months later, Sponge went flying up in terms of their valuation, because they were bought by a big American corporation. So we would’ve loved working with them and we would’ve done really well with that exit, because we would’ve been part of that American sale. What then happened was that the founder of Upper Telecom tried stealing my shares. I had 12 months of litigation where, in the end, I beat hem in court. He settled before court, paid all of my expenses, but thereafter, he was just a bad fit.


Is exiting a business easy?

No, it isn’t. One of the terrible things is that you have no idea how painful it is dealing with these so-called professionals. I have a massive chip on my shoulder against lawyers and accountants. They don’t care, because they’re getting paid a huge amount for doing very ordinary things. On a £55 million deal, the lawyers and accountants earn £2.5 million out of that deal. So I would urge any entrepreneur to start from the beginning. When you’ve got your certificate of incorporation, scan that document, put it into a file, put it into a sensible place, like a computer, and start to categorise everything.

The sooner you start – and that’s everything from all the scans of your passports, of your employees’, etc. –, the better. It took six months of painful due diligence before I sold. But then Monitise walked away from the deal, and for six months we’d been completely diverted away from the business. Then it became very perilous, because we were spending all day answering questions from lawyers and accountants non-stop. So the sooner you do it and the more information you’ve got squirrelled away in a sensible format, the easier your due diligence process is.


What does it take to sell a company?

My golden rule is to never employ a broker, consultant or any of the other kind of charlatans who rock up at your door promising the earth and deliver nothing. I reached out to all the people in the mobile industry and told them we were up for sale.


Does that mean you were actively looking to sell?

Yes, absolutely. I don’t believe in creating a lifestyle business. I get very bored. I stuck at it for five years, and that’s a long time. I like to build a business. My plan now with DanDan Digital is to sell 50% to private equity in 2019 probably and release a load of funds in which case I can take off for a couple of years and come back after.


If a business wants to exit and they feel ready for it, should they shout about it to find a buyer or will buyers find them?

They have to understand who is the most sensible strategic exit, because trade sales for me make perfect sense. I’ve mentored 17 companies, and the very worst CEO is the MBA CEO. They have the Harvard Business School ideas implanted into their brains and it just drives me insane. The first thing that comes out of their mouths is that they are only interested in smart money. After that they say they are going to IPO and then I just die internally. Because, for me, a nice little trade sale for a few million is a nice result. Then you can move on to the next idea and the next idea.


Are you happy with your exits or do you think you could have done it better?

Brainstorm was a disaster. To take £3.2 million was a reasonable exit at that particular moment. But did I do everything wrong? Absolutely. Would I do everything again differently? Yes, I would. And the frustrating thing about the £12.3 million exit (Last Second Ticket) is, because you are CEO, you have what’s called retentions. They hang on to 50% of my exit for two years in case anything crawls out the woodwork or in case there is any legal issues. So in the intervening period, the share price of Monitise had taken a spectacular fall and was worth 4% of the value that I sold out. All my shareholders and staff trousered a load of cash from minute one, and Yours Truly, the CEO, had to wait two years for 50% and it’s now worth a price of a round of drinks. And you have to pay tax on the full amount from the first minute but you can’t claim it back. Things are so stacked against the CEO. It’s outrageous.


What is the recipe for a successful exit then in your opinion?

Tenacity, desperation, and hard work. You just have to keep going.