A business has its cycle. Many successful entrepreneurs know that, in one way or another, you will have to find your exit—one that leaves you far better than when you started. In this episode, Domenic Rinaldi invites serial entrepreneur and CEO of CareerGigGreg Kihlstrom, to talk about Greg’s experience growing a business through acquisition and then selling that same business years later for a much higher multiple. He shares how he was able to integrate a business into his existing operation and how you, too, can methodically prepare your business for an eventual sale. While taking us throughout his journey, Greg then lets us in on some of the lessons he learned, the pitfalls many entrepreneurs fall into, and how he is helping bridge the gap between having that stability from a full-time job to the freedom and flexibility that comes with being a freelancer.

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Greg Kihlstrom: Growing A Business Through Acquisition And Selling It Higher

This episode is a twofer. We’re going to talk with a serial entrepreneur, Greg Kihlstrom about his experience growing a business through acquisition, and then selling that same business years later for a much higher multiple. Greg started Carousel30, which offered web design applications. It was a small business and largely utilized freelancers for specific tasks. Through an acquisition of one of his vendors, Greg not only grew the business, but wound up developing a niche, building mission-critical web applications for financial services firms. This created a much more valuable business, which Greg then sold years later at a much higher value. Greg shares his experiences from both acquiring and integrating a business into his existing operation, and how he methodically prepared the business for an eventual sale. I know you’ll gain some valuable insights from knowing Greg’s journey.

I hope you enjoy our show. If so, please take a moment to subscribe and review our show. We appreciate it. By subscribing, you will be notified of new episodes and the bonus episodes we plan to release in the near future. In the meantime, if you have questions about buying or selling a business or need to better understand the process, don’t hesitate to reach out to me directly at [email protected]. I am committed to helping you avoid the common pitfalls, so you can maximize value and minimize risks. Please let me know specifically what you’re seeking help with. Thank you for being here. I know you’re going to get a ton out of this episode. Greg, welcome to the show.

Thanks for having me.

I’m excited to have you. It’s rare that I get to have somebody on the show that has hit both of the major categories that we like to talk about, growing through acquisition and then building up your business and selling it. Before we get into that, it appears like you’re a serial entrepreneur. You have started, built and sold a couple of times. Now you’re onto a new venture. What got you into entrepreneurship?

My father started his company when I was four years old. At most, it was two people. He kept it always small and independent. For me, it was normal. The rest of my friends at school, everybody, their parents went to work. I didn’t understand that it wasn’t normal to have your own company. My dad worked at home. From an early age, it seemed normal. Right out of college, I had a couple of day jobs. My second job out of college, I worked at a tech startup back in the original internet boom in 2001. I had a good time but got laid off with 40 of my closest coworkers on the same day. I decided I didn’t want to do that again. I didn’t want to go back and put myself in that situation. Since then, I have worked for another company at one point. I went on. I freelanced at first, and then I started my agency, Carousel30, shortly after that.

What did your dad do out of curiosity? Working from home sounds like it might have been rare when you were growing up in such a young age.

He was an independent sales rep. He also traveled a lot. He was probably gone as much as he was at home working. At the same time, he had a home office. I grew up with that being completely normal. To your point, it’s a bit novel. Not these days, but it was a bit novel a few years ago even to do that so much.

Let’s talk about the firm that you built and sold, Carousel. What got you into that business? You got to a point where you decided maybe an acquisition was a good path to growing it a bit. You grew it and sold it. Let’s start off first with what did that business do and what got you to the point where you thought an acquisition would be a good path to growth?

Over the course of about fourteen years, I owned it. Through that time, there were a number of twists and turns. What got me into it was I got laid off from the startup. I started freelancing. I made some good connections at the startup. I had a few jobs or gigs right after that and got busy enough that I got to this point where I was so busy. I either had to start turning down clients or I had to find a way to get more work done. I ended up partnering with a few other folks and starting the company.

It was four of us that cofounded it originally. About a year and a half into that, for various personal reasons, those three partners went their separate ways. I decided that it made sense for me to take over sole ownership and keep it going. I saw enough potential there. For a brief time, this was 2006, 2007. It was me outsourcing to a lot of other companies. We’ve built the company. We’re doing well on revenue and everything. It was me and a few other part-time people plus a bunch of subcontractors.

You were specifically in the finance industry. You were doing some mission-critical web application.

We ended up in the finance industry. It started out a little more broad in the website design and development space, which at that time was becoming a mature thing. It was in early days for a mature web design and development company even. A year and a half in, I was managing these external vendors. One of the vendors I ended up working with about 75% of the time. The owner of the company was in most meetings with me. His team was doing about 75% of the work. I was like, “Instead of outsourcing and trying to calculate all of this stuff, let’s merge company.” It was an acquisition, but let’s merge teams and everything like that and become one company. At that point, we grew from technically one person, me plus outsourcing to about seven people because their team is about six. I acquired them in mid-2008, which a few months later, some interesting things happened in the economy, but I wasn’t into financial predictions at that point in my career. It made perfect sense to do that given how much money I was giving them anyway. We got along well.

The owner stayed with the business going forward. Did he have an ownership percentage or did he sell out to you and you owned 100%?

I gave him an ownership percentage as part of the acquisition. About a year and a half later, his second in command got some percentage ownership as well.

Tell me what was that experience like? What was the integration like after you agreed to value and wrap up the deal? What was it like integrating and merging the two firms together?

Getting a financial advisor is a pretty key thing to do if you're in the M&A space at all. Share on X

When I sold my company, there was a lot more due diligence and everything like that. I would say compared to now, I was a kid. We did things maybe not as sophisticated as we should have. All is well that ends well. We got some lawyers involved as we could, but we came to terms quickly. The relationship was so good that everybody felt comfortable moving quickly. The next time that happened, there was a lot more due diligence. I learned a few things. I didn’t have a bad experience, but I learned that I should have spent twice as much time thinking through some things. I feel like maybe I gave too equity away.

Can we talk a little bit about that? Can you share with the M&A Unplugged community, what did you learn that first time around that in the future you would do differently? That’s what this show is all about. Making sure people don’t fall into those pitfalls. What is it you would have done differently?

A lot more financial due diligence, even though the companies at that point were huge companies by any means. I would have done more financial due diligence. I feel like I know a lot better what I don’t know. The first thing that I would do is get a financial advisor. I have an M&A person on call at this point in my life. That’s a key thing to do if you’re in the space at all. At that point, I had a lawyer. I had them look over terms. I asked a few people to help out.

What was it in the financials that if you were to do it again, you would have done differently? What did you realize later on that would have changed the course of the transaction?

Revenue was exactly as I thought that it would be. It’s a better understanding of costs and profit. You can look at the P&L statement and all that stuff. I know how to read those things a lot better than I did a decade or so ago. Sitting with the idea of like month three of this, let’s say things don’t go swimmingly. What am I going to do? What am I going to be saddled with? Let’s say it goes not even terribly, but below average expectation. What are the risks and some of the things that I need to keep in mind? Do I need a line of credit? Do I need all of those types of things? In the early days, it was a self-funded company. We didn’t have access to lots of equity and all those kinds of things. We were getting by. There was enough money in that work that money was continually flowing in. A few months later, the 2008 financial crisis happened to us. We survived it. I wish I would have thought a few months out, and had someone to help me think through a few months out.

If the crisis hadn’t hit, would you feel the same way? Was it the crisis that in the rear-view mirror had you rethinking of the transaction?

I still would think the same way. There’s a point where you can prepare too much because it simply takes lawyers and accountants too much time, and they bill you for it. You can’t be too prepared for anything like this. You’ve got to know where all the things are buried. I should have spent more time regardless. The financial crisis, for better or worse, had affected everybody in the industry. We ended up benefiting in a tangential way to that anyway because our competitors went out of business.

Your point is well taken. In fact, we’re going to do a series around diligence because it’s such an important topic. People don’t spend enough time. They don’t know what they don’t know. One of these areas we’re bringing in specialists and people who understand that to do forensic accounting. It goes well beyond the numbers and the financials. There are many other things that need to be contemplated in diligence. We’re going to do a couple of episodes in early 2021 around diligence and try to help better educate people on what’s involved here. Getting past the financial piece of it, how was the integration? I know you were a small firm. There weren’t a lot of moving pieces, but how did integration go cultural fits? Were there things that had to be worked out?

The culture worked out well because we had a working relationship. I had a working relationship with everyone. To your point, it was a small team. I knew everyone and had some interaction already with them. Me as CEO wasn’t a weird thing to them or anything like that. From back office support and all those kinds of things, because I was a one-man show managing other vendors and stuff like that, it was easy. We use one accounting system and they use another. There were some things like that that we needed to do, but there was much more that needed to be integrated when I sold the agency. It was a lot larger than more complex. At that point, it was relatively seamless from that standpoint.

You guys went on to go ahead and build a pretty decent-sized practice over the next 6, 7 years.

From 2008, 2009 to 2014, about five years or so.

You built the practice up. Did you hire an M&A advisor and take it to market at that point in time?

It was 2016 when it was sold. I bought my other partners out in 2014.

You buy them out when they left the business?

One had left a little bit prior for some personal reasons, moved out of the area. The other one I bought out. Both of them were out of the business. That came down to simply me wanting to grow or do something bigger with the company. The others were being okay with things as they were. There’s nothing wrong with either approach. It was just a difference of philosophy. In 2014, I did that. At that point, I’d been focusing more on various specific parts of the business.

MAU 83 | Business Acquisition

Business Acquisition: Other people have been trying to sell their company for a long time because they weren’t prepared and didn’t have good representation and consulting along the way.


I was doing sales and I was doing some strategy work, but I had not been key in the operations, finance, anything like that. One of my partners had been doing all of that. Trying to learn from the past, the first thing that I did as I was buying the other partners out was I hired a fractional CFO, who doubled as an M&A advisor. At the time, my goal was to acquire more companies and grow that way. I hadn’t quite made the decision to sell. That came a little bit later after reviewing the market and everything like that. I knew that immediately I needed to have a very good understanding, one that I had never had before of the finances of everything going on.

I was the sole CEO, the sole executive, the sole owner at that company at that point. I wanted to have a better understanding of all these things. I never took the time to learn as a designer and marketing person out of college. I realized if I’m going to own a company, I don’t need to be an economist, but I need to understand how everyone does their job. I need to understand how business works. I hired somebody to do that. I brought in a good operations person to help me in the day to day, like managing director type to run the business. I was then solely focused on the metrics of we’ve got to be more profitable, get utilization in the right place, all of those types of things, to either acquire or be acquired. It ended up making more sense to be acquired.

You packaged up the business. You took it to market. Tell me what that experience was like. What did you learn in that process? You had acquiring a business on your belt, and now this was your first time selling one.

Fortunately, it was a lengthy process of doing that. It was early 2017 when I made the decision that given certain things going on in the market and everything, it made sense to sell. I’d been working for the past two years-plus almost in getting the company in a place where it was attractive. Either I was going to have to get money to buy a company or I was going to sell. All the papers were in order. I come from a creative and marketing field. There are a lot of things that you worry about from a branding and marketing perspective that are important.

The brand that we built was an important aspect of selling, but there are many other things that the finance people are going to look at when they’re buying a company versus, is the logo recognizable? Is our portfolio is as up-to-date as it could be? Things that are critical for some things but they want to see, am I going to make money off this? At the end of the day, am I going to make money off this transaction? Teaching myself to think that way when it didn’t come naturally or by training was good. I take that with me wherever I go now.

What were the things that you did prepare in? What were the big things that you did that you felt moved the needle for you on being able to sell the business more easily or maybe increased the value?

We’re a consulting company at the end of the day. We had people working hours sometimes performing on fixed price projects. Sometimes it was time and materials, but it’s understanding utilization rates. When we started the business, it was like, how much does a website cost? Will they pay $20,000 or $50,000 or $100,000? If they will, we’ll take it. That was very early days. As the business went on, we started becoming more sophisticated. It came down even further of individual’s utilization, and how profitable is each person on the team.

If we cut people, which people would we recommend? What contracts are most valuable? We’ve made a move into financial services as a sector. That was because our financial services projects were much more profitable than our nonprofit work. It was a no-brainer, “Let’s shift more sales and marketing efforts into getting more financial services.” For many reasons, it’s more profitable. Once you get a few of those, once you focus on a sector, it becomes easier to get more of those. Those are a few things at least that helped.

It sounds like you got your arms around what your metrics were, what made sense if somebody had a blueprint on how to grow profitably going forward. What was your experience like taking the business out to market and selling it? What did you learn along the way?

It didn’t take so long. There were a few seeds planted along the way. I was connected in the marketing industry in Washington, DC where the company is based and where I’m based. We had an offer a couple of years prior. Almost right after I bought my other partners out, I had gotten an offer to acquire us. At the time I was like, “I want to grow this myself and thanks.” At the same time, like anyone should do, I’m not going to burn bridges. I kept in touch with them. They weren’t the only suitor so to speak, but they ended up being the ones that acquired us because there was a good relationship.

We’d built a rapport over a few years of talking on and off. There were about three companies that were serious. There were two that were a little more serious than the one that ended up acquiring. It’s a relatively small town where marketing and advertising agencies are concerned in DC. It was easy to find a short list of potential buyers knowing where everybody is at in their growth cycle and everything. All said and done, that’s about six months. That’s because we were prepared. I know other people that have been trying to sell their company for much longer than that. I don’t think they were as prepared and didn’t have as good representation and consulting along the way.

You spent ahead of time to be prepared, which is something we talk about all the time on M&A Unplugged. It’s critical to get ahead of the curve well in advance of wanting to go to market. Understand your key metrics, put the business in a position where it can easily be transferred to a new owner. I’m going to ask the question in a slightly different way. You’ve gone off and you’ve now founded a new company, which is CareerGig. I want to talk a little bit about that, but if you get to the point sometime in the future where you look to sell CareerGig, what did you learn from the first time around that you’ll do differently with CareerGig?

It’s focusing more on creating value ahead of time. There are many things that I have learned that I’m trying to apply. Some of it, I may still be processing, even though the last company was acquired a few years ago. The difference with this one is it’s a different business model too. It’s also understanding what’s going to be the most valuable, selling a consulting firm versus CareerGig as a SaaS platform. Selling a product company is vastly different. I would need to study up more on what are the triggers and what are the points where people are going to find the most value in that.

Tell us a little bit about CareerGig. What is it? What got you to the point where you founded CareerGig?

After I sold Carousel30, I joined the company. We were part of a roll-up. There were three other companies that rolled us up. I joined them for about a year and a half and went my way.

The brand that we built is an important aspect of selling. Share on X

Was that the plan? Was that the thought? You were going to stick around for a while and then transition out?

I stayed on to transition my team over. Most of my team went over as part of the acquisition, clients and stuff. You want to keep everything as smooth as possible. The plan was always for me to exit.

Was your deal an earn-out deal or did you get paid the majority of the purchase price at the closing table?

It was a combination. There was a little bit of each. That’s another reason I wanted to stay on, so I could get those contracts signed.

Do you have an incentive to stick around, make sure the company met the metrics? Did it meet all the metrics? Did you get what was a near full payout?

It met most of them. We’ll put it that way. I’m short on a couple, but I met the other ones. Maybe that’s a topic of a whole other episode, motivation after a sale. I was side-by-side with two other business owners that sold to the same company. That was an interesting little focus group or group therapy.

Did you also have similar deal structures?

Yeah, we did. There were different sizes of companies. One was a lot larger than my company and one was about the same size but about the same deal structure. We were all incentivized to stay on and keep the customers happy, keep the team happy and everything like that. After doing that, I made a decision that I’d done marketing and consulting to an extent for a while. Maybe at some point, I’ll go back to it, but I got involved a little bit more in some other related things. I got more involved in customer experience, which led me to employee experience and leadership development, organizational change. I got involved in the future of work and work transformation.

That led me to understand and appreciate how quickly the freelance economy is growing, which led me to start CareerGig. It is about connecting freelancers in a community that also connects them to paying gigs as well as benefits that you’d normally get at a full-time job. We provide insurance benefits and access to retirement. It’s making up for what you give up. You gain a lot by being a freelancer. You gain freedom and flexibility, but you give up some things. The reason why people get full-time jobs is for those benefits, perks and stability. For us to be able to make up some of that gap or all of that gap ideally is our goal and our mission.

Is that a unique thing to your platform? I have to admit, I haven’t heard a lot of scenarios where freelance networks are offering benefits to the freelancers. It seems to be a rare situation.

There are a few that provide some of what we offer. We offer insurance in all 50 states. We solely targeted the US market. We’re licensed in all 50 states. We offer guaranteed issue insurance. You can get healthcare through ACA, but you can’t get life insurance and disability. Particularly as an independent, getting that guaranteed issue, no questions asked as long as you work a set number of hours through our platform, that is not being done.

What types of jobs? Is it across the board, everything you can imagine?

We have a lot of diverse types of jobs. A freelancer can sign up. If you have your own customers and everything like that, you can sign up. You can do anything. There’s nothing stopping you, but the roles that we try to specialize and placing people in and connecting are in the technology space. Anything from cybersecurity, data science, software engineers, the marketing space. This would be anything from design to marketing, advertising, writing or the healthcare space like nurses and home health aides. Other than healthcare, which is an industry unto itself, industries aren’t as important as either the tech or the marketing roles.

That’s a tremendous benefit. I wish you nothing but the best there. I love to know that a platform is offering benefits to freelancers. That’s one of the biggest issue freelancers have, securing benefits, taking care of themselves and their families.

I have a lot of interest in it. We feel like we’ve hit on something.

MAU 83 | Business Acquisition

Business Acquisition: You gain freedom and flexibility by being a freelancer, but you also give up the benefits, perks, and stability from a full-time job.


I love that you’ve bought and sold, you’re now starting again and building to bring everything full circle. If you were to offer any advice to owners who were looking to grow through acquisition, or then prepare to sell, if you were to put a bow on the conversation, what advice would you offer?

Do your homework, which is not just on the potential acquisition or anything like that. The help that I receive from smart people that do this day in and day out, I know you do this as well. The M&A person that I work with was incredibly helpful from the start, but it required me being very forthcoming about what I did and didn’t want. With anything, there are a lot of things that seem like, wouldn’t it be easier to X, Y, Z? Wouldn’t it be easier to buy a company versus organically grow? Maybe, but when you’re getting help from experts, which I highly recommend, make sure that you’re honest about what a bad deal looks like as well, not just a good deal. You learn a lot about what you don’t want to do in the future as well, as much as what you want to replicate.

It’s as important what you don’t want to do versus what you want to do. Greg, if folks wanted to get in touch with you in regards to CareerGig or they had a question about this interview, how could they reach you?

I’m active on LinkedIn. I recommend you mention that you saw me on this show and reach out. I’m happy to connect with you. Check out CareerGig.com. We serve both freelancers and companies that hire contractors. It’s almost something for everybody.

Greg, thanks so much for being here. I appreciate it. I hope you enjoyed this episode. If you enjoy our content, please remember to subscribe and review our show. I look forward to seeing you again on the next episode. Until then, please remember that scaling, acquiring or selling a business takes time, preparation and the proper knowledge.

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About Greg Kihlstrom

MAU 83 | Business AcquisitionMy mission is to find better ways to connect people to the things they value most through product, partnership, and experience strategy.

This has taken many forms over my career, such as helping employees find purpose or feel more valued or valuable at work through my employee experience work. It has also involved helping consumers finding more relevant products, services, or causes to support through my marketing and customer experience work. I believe that strategy, communications, data, and technology can work together to do amazing things for people and organizations.

I’m a customer and employee experience and digital transformation expert, best-selling author, and speaker. I’m CEO and Co-Founder at CareerGig after selling Carousel30, the digital experience agency I started. I’ve worked with some of the world’s top brands such as AARP, AOL, Booz Allen Hamilton, Choice Hotels, GEICO, Howard University, Marriott, MTV, The Nature Conservancy, Porsche, Toyota, United Nations, and VMware. My work has won international recognition and been published in prominent magazines and books.

I co-founded and served as Chair of the American Advertising Federation’s National Innovation Committee, was a Member of the Virginia Tech Pamplin College of Business Marketing Industry Mentoring Board (MIMB), and currently serve on the University of Richmond’s Customer Experience Advisory Board. I am Past President of AAFDC, and served on boards of Trust for the George Washington Memorial Parkway, AIGA DC, and the Trust for the National Mall’s National Advisory Committee.

My latest book, “The Center of Experience” introduces a blueprint for the experience-led organization. Previously, I wrote a series of three books, The Agile Web (2016), The Agile Brand (2018), and The Agile Consumer (2019) that discuss the evolving relationship between brands and consumers. I write for Forbes as a member of the Forbes Agency Council, and written for Social Media Today and The Washington Post, The Washington Business Journal, Search Engine Watch, iMedia Connection and Website Magazine.

I’ve spoken at Internet Week New York, SMX Social Media, EventTech, Internet Summit, Digital Capital Week, Mid-Atlantic Marketing Summit, AU Social Learning Summit, Social Media Week and others. I’ve been featured in Advertising Age, The Kojo Nnamdi Show, SmartCEO, Bisnow, Washington Times, Voice of America, and Modern Marketing Today. I’ve also guest lectured at Georgetown University, American University, Virginia Tech, Howard University, University of Maryland and Westwood College.

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