How and why I sold Get Rich Slowly
When I started Get Rich Slowly — on 15 April 2006 — it made very little money. It earned a few pennies per day. Slowly, the income grew. A few pennies per day turned into a few dollars per day, and that turned into tens of dollars per day. Eventually I was making enough money from this site that I could quit my day job to blog full time. The last time I mentioned my income on GRS, I wrote that I was making $5,000 a month. That was in November of 2007, I think. Then my wife, my lawyer, and my accountant all asked me to stop writing about my income. When that holy trinity speaks in unison, you listen, right?
The more I worked on this site, the more the income increased. I won't say how much I was making, but if you read Crystal's guest post from earlier this month, you can make some educated guesses.
As Get Rich Slowly grew, one of the curious side effects was that people began to make offers to buy the site. I always ignored those offers.
Eventually I realized I was being foolish. I wasn't following my own advice. What would I tell my readers? Well, I'd tell them to try to make more money, so why wasn't I trying to do the same? At the beginning of 2009, I made a private New Year's resolution: I decided to field every offer for the site that I received.
The Razor's Edge
It didn't take long to get the first offer. At the beginning of January 2009, someone wrote saying he wanted to buy Get Rich Slowly.
“How much will you pay?” I wrote back.
“I'll give you $5,000,” the guy said.
“No thanks,” I said. That was less than one month of revenue. I'd be foolish to sell.
A week later, I received another offer to buy the site. But I didn't notice. I was distracted. I'd just received news that my best friend had killed himself. This single event rocked my world. If you want to find a catalyst for all the things that have happened with me over the past few years — the travel, the soul-searching, the sale of this site — look no further than Sparky's death.
Suddenly, blogging didn't matter. I had been burned out before this, but now I wanted to leave, to quit cold turkey, to do something else. My wife and I talked things over, and she agreed that it might make sense to sell the site.
When the dust had settled at the end of January, I found the second offer to buy GRS waiting in my inbox. I replied.
“How much will you pay?” I asked.
“We don't know,” the guy said. “First, you have to sign a non-disclosure agreement. Second, you have to send us all the financial information related to your business. Third, you have to wait.” This was baffling. I contacted my accountant and attorney to ask questions. They said this was standard practice, and to go ahead. I sent the info over and waited. And waited. And waited.
The First Offer
While I waited, Kris and I talked more about the possibility of selling Get Rich Slowly. Could I actually do it? Would I? In general, I loved the work, and I loved the community that was coalescing around the site. Plus, I felt a huge responsibility to the people who had been reading for three years already. I didn't want to leave them in the lurch. But I was feeling increasingly frustrated, as if I'd said everything I could say about money. I wanted to quit anyhow, so what was the difference? And there was the fact that I wanted to write a book and begin giving community presentations about personal finance. Thinking things through made my head hurt. There was so much to consider.
Eventually, the company (which I'll call Computer Resources so that I don't violate the NDA) came back with an offer. How much was the offer? Because of the NDA, I can't give a number, not even a fake one. But let's just say Computer Resources offered me a lot of money for the site.
In fact, the offer was so big I couldn't refuse. At the same time — again, following my own advice on this blog — I figured I had to negotiate. I submitted a counter-offer. Computer Resources went back to the drawing board.
About this time, I started to feel as if this was all way over my head. I did some research on the web and found other sites that had been purchased by Computer Resources. I contacted the site owners and talked by phone or by e-mail. They all had good things to say about Computer Resources except that apparently the company simply purchased sites, slapped ads all over them, and then left them to die. They never updated content. I didn't really want that to happen to Get Rich Slowly.
One of the fellows I talked to suggested I contact an investment banking firm to help guide me. “They'll take a commission, but it'll be worth it,” he told me. “It's just like using a real estate agent to sell a house.”
The Second Offer
As February 2009 wore on, Computer Resources still hadn't responded to my counter-offer, so I contacted the investment bankers. They were excited to work with me. “You've already done a lot of the work on your own,” they said. “But we think you can get more for your site. We think you should spend a few months sprucing things up and then put it out at auction.”
“That's a good idea,” I said, “except for two things. First, I'm burned out and I want to sell now. Second, the economy is tanking, and I'm afraid the revenue for personal finance sites will dry up before long. I feel like I'm on the top of a bubble and should sell now.”
I agreed to let the investment bankers contact one other company, a company called QuinStreet.
As the investment bankers were talking with QuinStreet, Computer Resources came back with their counteroffer. It wasn't much more than before, but they added a bunch of stock options. I had a week to respond. I told them I'd think about it, and meanwhile started talking with QuinStreet.
At first, QuinStreet made me nervous. I was afraid they'd buy Get Rich Slowly and convert it into one big credit card ad. But during our conversations, they explained they had a grander vision, that they were committed to building a collection of sites with solid financial content, sites like Get Rich Slowly. Unlike Computer Resources, they wouldn't let GRS wither on the vine; they needed to make money, yes, but they wanted to provide content while doing so.
As the deadline approached for a decision on the Computer Resources offer, QuinStreet gave me an offer of their own. If I would remain with the site for three years, QuinStreet would pay me almost twice what Computer Resources was offering. I was floored. Still, I wasn't willing to commit to three more years at Get Rich Slowly. I was burned out. My best friend had just killed himself. I wanted to do other things. So, I did something strange: I asked for less money.
The Final Offer
Tuesday, 03 March 2009 was a big day for me. While the surface of this blog was calm and normal, there was a flurry of activity behind the scenes. Computer Resources was demanding a decision on their offer. QuinStreet was scrambling to give me a second, lower offer. I was hunkered at my accountant's office, waiting. My lawyer was at his office, in constant communication with me. At the end of the afternoon, QuinStreet sent over their revised proposal.
They were offering about 33% more than Computer Resources. Plus, I wouldn't be tied into the site for three years; I could walk away from GRS at any time.
My advisors and I agreed that this was an offer we could accept, and we finally responded to Computer Resources, which was growing impatient. I asked if they could beat the offer from QuinStreet. They thought about it for an hour, and then declined. They were cranky.
During the month of March 2009, I spent much of my time working on the “Asset Purchase Agreement” to sell this site. QuinStreet wanted some things in the contract, and I wanted others. Mostly, though, our visions matched. They wanted a personal finance site with solid content, and the contract we created reflects that.
For instance, QuinStreet offered me editorial independence. What does that mean? It means that QuinStreet won't (and legally cannot) tell me what to write. It meant that I could continue to share the same sorts of things I'd been sharing at Get Rich Slowly since day one. I couldn't be forced to write about credit cards or payday loans or other things that went against my better judgment. (Not that QuinStreet would have asked me to write about those things — it just gave me some insurance.)
But I couldn't write about everything I wanted. As you know, I'm a pretty open guy. I share much of my life on the internet. And I would have shared the sale of the site, too, except that QuinStreet requested a non-disclosure agreement, just as Computer Resources had. I balked at this. “It's standard operating procedure,” QuinStreet told me. “We don't want our competitors to know what we're doing.”
The investment bankers, my accountant, and my lawyer all said the same thing: “It's standard operating procedure. They don't want their competitors to know what they're doing.” I went along with it, even though it meant I wouldn't be able to share this very important event with GRS readers.
A New Era
On 01 April 2009 — yes, April Fool's Day — we signed the paperwork. QuinStreet acquired Get Rich Slowly.
At first, I thought I'd stick around for only a few more weeks…or a few more months. I flew to San Francisco to meet with the new owners, and we discussed the direction of the site. They showed me the re-design they'd already begun to implement. (By the way: If this is the only design you've ever known for Get Rich Slowly, then you've never read it when I owned the site.)
Because I wanted to leave the site, we had to find new contributors. We held auditions for staff writers. Remember that? That was because I wanted to leave, and we needed replacements. Robert Brokamp and Donna Freedman write here because I was going to walk away. The reader story every Sunday started because I was going to walk away.
But you know what? I didn't walk away. GRS was my baby. Plus, working with QuinStreet took a lot of the pressure off me. Besides, I felt an obligation to you, the readers. I stuck around. In fact, I've stuck around for almost three years now, working with QuinStreet to guide the site's direction. No, it's not exactly the direction it would have been taken if I'd been completely in control myself. But that was never going to be an option. I was going to leave the site after Sparky's death. I was going to quit cold turkey. The GRS of the past three years is the best it could possibly have been under the circumstances.
Plus, QuinStreet has been more responsive than I had hoped. When I sold the site, I feared the worst. The worst never came to pass. In fact, the people I work with always listen to my concerns (and to your concerns) and try to balance those with the needs of the business. I think the partnership has been very successful over the past three years, and believe it will continue to be so.
Managing My Money
What did I do with the money I earned for selling the site? I practiced what I preached.
- First, Kris and I paid off the mortgage. If you'll recall, in early February 2009, we refinanced our home. We'd started that process before we realized that we might sell the site, and we saw it through to completion. But within weeks of re-financing, we paid off the mortgage completely. This has been one of the toughest things not to discuss. I've wanted to talk about it many times over the past three years, but have been unable to. Now I can. (And believe me: Not having a mortgage has made the divorce process much, much easier.)
- Second, I paid taxes. Yes, I know that by paying taxes early, I'm letting the government have use of my money instead of earning interest on it myself. I don't care. This is one area where I still prefer to be irrational with money. I like to pay taxes immediately so that there's no chance I'll forget about them or make a mistake. That's what I did with the money from the sale of the blog: I paid taxes right away.
- Third, I followed my own advice again. I set aside a piece of the windfall to use for things I wanted. I bought season tickets to the Portland Timbers. Kris and I vacationed in South Africa (and still plan to vacation together in South America next month). And so on.
- But most of the money went straight into savings. One GRS reader — Dylan Ross — is a financial planner, and he's been privy to some of my financial moves. He's seen that a bulk of the money went into index funds (again, practicing what I preach), while another portion went into municipal bonds. (The economy was rocky at the time, and Kris was nervous, so we put some of the cash somewhere “safe”.) I've also loaned some money to the family box company so they could make some capital improvements.
Over the past three years, I've strived to not touch any of the money I earned from selling Get Rich Slowly. And that's my goal for the future too. Instead, I live off my income from writing. QuinStreet pays me a modest salary to manage Get Rich Slowly, and I continue to write for Entrepreneur magazine and other outlets. Though I'm in no danger of falling into debt, I tell myself that touching my savings would be the same thing. My goal is to keep from deficit spending. So far, so good.
The Bottom Line
So, what does all of this mean for the future of Get Rich Slowly? I'm not sure, actually. QuinStreet owns the site, and they can do what they want with it. If they decided that this site would make them more money as a porn site, they could turn it into a porn site. But they're not going to do that. After working with the company for the past three years, I'm convinced they want to provide quality content so that people can improve their financial lives. Yes, they hope this will lead folks to respond to the advertising — they want to make money — but they understand that content is king.
I know that many folks will be pleased that I've followed my own advice and managed to achieve financial prosperity. I also know that some folks will resent this success. And, especially, that I haven't mentioned it before. Well, I couldn't mention it for a long time because QuinStreet was trying to keep the news from its competitors. But I can talk about it now.
The bottom line is that for roughly half its life, Get Rich Slowly has been owned by QuinStreet. (March 15th is the actual mid-point date for ownership.) If this site has helped you move toward your own financial goals over the past three years, it's been under their reign. When I talk about “social media elves” or “marketing elves” or “technical elves” or any other sorts of elves, I'm actually talking about QuinStreet employees. There's now a whole team of folks who help with this site. It's not a one-man show, and hasn't been for a long time.
There have been a number of changes to GRS over the past few years. We've brought on staff writers, and my voice has diminished. It's flattering that some folks find this frustrating, but it was also unavoidable. Lately, though, I feel re-invigorated. Now that I've been able to share some background — both in my personal life and my professional life — there's tons for me to write about. Plus, I've been wanting to do more smaller articles like I used to.
I won't become more prolific this week or next — I'm about to leave for Argentina! — but in March, I intend to increase my output at Get Rich Slowly. It won't ever reach the “12 article per week” level that I used to produce, but it'll be more than the “one article per week” level I'm at now. It'll be fun for me, and I hope that it'll be fun for you.