This Grasshopper Has Learned Well

David Hauser and his business partner founded Grasshopper in 2004. The company offers a virtual phone system for entrepreneurs, targeting a core market of businesses with 1 to 10 employees. Over the course of 12 years, they grew Grasshopper independently, without outside investment — a rare feat among fast-growing technology companies.

By 2016,  Grasshopper was up to $30 million in revenue with gross margins of more than 80%, all from a workforce of fewer than 40 employees. With numbers like that, it shouldn’t be surprising that an industry giant like Citrix was interested in acquiring them. Citrix offered almost six times Grasshopper’s topline revenue with very few strings attached and kept coming back to the table even after Hauser turned them down.

In this episode, you’ll learn:

– The trick to growing a company without outside investors

– What to look for when building your management team

– How to weigh the risks and benefits of a proprietary acquisition versus a competitive sale

– How an escrow can gobble up your sale proceeds and what to do to ensure that doesn’t happen

– How to get prospective buyers to make the first offer

– Why (and how) Hauser avoided an earn-out

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