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Things I Wish I Knew Before Selling My Company

By In Entrepreneurship, Leadership

…or, how to survive due diligence without screaming into a pillow (too often)

On January 1st, 2026, Sourcetoad was acquired by Thompson Holdings. That part’s public now, and I can say, I couldn’t have hoped for a better outcome. We landed inside an employee-owned ESOP structure, surrounded by genuinely kind, sharp, and values-aligned humans. The strategy, culture, and incentive structures are everything I had hoped to build, and now get to be part of.

But even when you end up in a great place, the road there can feel like trying to run your company during the day while being interrogated by a team of lawyers at night. In a language you don’t speak. Using documents you didn’t know existed.

There are things I’d do differently if I ever had to go through it again. And since I’d prefer you not learn these the hard way, here’s the post I wish someone had handed me before I started.

1. Learn What Working Capital Really Is

You may think working capital is just “the money in the bank to make payroll.” I did. But in M&A, working capital becomes a financial and legal Rubik’s cube, and it directly impacts your final payout.

Here’s the short version as I understand it: your acquirer wants to make sure they’re buying a business that can operate normally on day one. So they’ll calculate how much short-term capital (cash, AR, prepaid expenses) needs to be in the business at closing, and they’ll negotiate that as a target.

That number is ESTIMATED. It’s also normalized and adjusted. And if you miss the target, you may be writing a check post-close.

Working capital trues up after the deal, and it gets shaped by your business model. Services companies, SaaS companies, project-based revenue, each one complicates the math. And everyone else at the table knows this well, but even in our deal our CFO understood subtleties that NO ONE else did. So you need to know more than the basics on this one.

Takeaway:

Working capital isn’t intuitive, but it’s important. Study it, model it, and don’t assume your gut will guide you right.

2. Trust, But Verify, Every Time

You’re surrounded by experts: bankers, lawyers, accountants. This is their job. They’ve done hundreds of these. But even experts miss things. Especially when they assume you’re a typical deal.

Like Simon Sinek always says, “Ask the stupid question”. Stop the meeting and go back to that thing on page 73.

In our deal, the biggest potential errors we caught came from small misunderstandings or unclear phrasing. We were almost too embarrassed to bring them up. But those awkward questions (asked by my amazing CTO) saved real money, and avoided some serious cleanup work later.

Takeaway:

If something doesn’t make sense, say so. You might be the last person who catches it. Also, have an amazing partner if possible who is more diligent than you are.

3. Track Due Diligence Like a Real Project

If your deal is mid-size or larger, you’ll probably have a junior banker acting as project manager. If it’s smaller, congrats, you are the project manager now.

You’ll be asked for contracts from 2018, explanations of deferred revenue, SOC 2 policies, lists of vendors, screenshots of your HR system, and a notarized blood sample from your head of finance.

I think that you should treat this like a set of software dev sprints: set up a simple spreadsheet, assign owners, and check in weekly. Otherwise you’ll lose track or lose your mind.

Takeaway:

Diligence is a second full-time job. Manage it like one.

4. M&A Lawyers Are Insane (In a Good Way)

They don’t seem to sleep. They respond to 1:00 a.m. emails. And they will happily work through weekends like it’s a sport.

This is great, because if you’re running a company during the day, you’ll be doing your deal work at night. Prepare for that rhythm. Use it. And then take them out to a really nice dinner when all is said and done.

Yes, the billable hours can be terrifying. But the best lawyers are worth it, and not just for paperwork. They’re your coaches in how to behave when the stakes are high.

Takeaway:

If you find a lawyer who texts back at 11:30 p.m. with bullet points, think of nicer and nicer places to take them for dinner.

5. Get Comfortable Being Talked About While You’re in the Room

There’s a moment (probably more than one) when someone on a call will say something like:

“Let’s review the comp structure for the founder if he dies.”

And you’ll be sitting right there.

At some point in the process, you stop being the protagonist and become a line item. That’s good. It means the business can live beyond you. But it can be weird. No one tells you how surreal it is to hear strangers talking about your salary, your severance, or what happens if you vanish.

Takeaway:

You’re not the business anymore. And that’s the goal.

6. Talk Less. Prep More. Don’t Negotiate

This might be the hardest lesson for most founders, especially if they’re used to wearing all the newest hats: you are not the negotiator.

You are not there to show how clever you are, or explain how smart your team was for choosing that customer billing cadence. You are there to answer questions, briefly, and let the professionals work.

The deal room is not your turf. Your team, your advisors, trained for this game. Hopefully you’re good at running a company… which is COMPLETELY FREAKING DIFFERENT.

Takeaway:

Channel your inner witness stand. Brief answers. Don’t ramble like I did. Let the pros handle the rest.

7. You Get to Watch Pros Be Amazing

One of the unexpected joys of going through this process was simply watching people who are really good at their jobs work together.

Bankers who know the exact number of turns in your industry. Lawyers who can dissect a 200-page agreement in an hour. The team on the other side of the table who’s been through five acquisitions and knows what to look for.

As operators, we’re often too deep in the weeds to step back and admire professional excellence. This process gives you that chance if you’re not too sleep-deprived to notice. Hopefully you can apply that feeling to your customers and clients. They should feel as deeply impressed by you if you’re doing things right.

Takeaway:

Sometimes, it’s okay to just watch and be impressed.

Final Thought

Selling your company is intense and humbling. It’ll test your patience, your understanding of finance, and your ability to stay quiet on Microsoft Teams calls (even when you are begging for a Google Meet or a Zoom). But if you’ve built something real, and you surround yourself with people who know what they’re doing, it can also be one of the most meaningful transitions of your life.

And if you’re lucky, you’ll end up where I did: not just with a great outcome, but with a future you’re excited to help build.

Just don’t forget to sleep after it closes.

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I help companies turn their technical ideas into reality.

CEO @Sourcetoad and @OnDeck

Founder of Thankscrate and Data and Sons

Author of Herding Cats and Coders

Fan of judo, squash, whiskey, aggressive inline, and temperamental British sports cars.

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The Leadership Lessons of a Felt Frog: Kermit and the Power of Gentle Command

In Leadership

The shelves of business and leadership literature are filled with frameworks, philosophies, and battle-tested memoirs. From Drucker to Lencioni, from fighter pilots to former generals, there’s no shortage of advice on how to be effective, decisive, and successful.

But this isn’t about that.

This is going to hopefully be the first post in a series about fictional leaders. I’ve wanted to do something like this for a long time, and it’s been stewing long enough to start. These leaders who came to power not through elections or command posts, but through storytelling. These are leaders imagined by writers, puppeteers, and creators who sat down and asked: What would it look like if someone led with hope? With principle? With purpose? Sometimes they’re deeply flawed, and sometimes they’re perfect. But they’re interesting because they reflect their creator’s idea of leadership.

They are not always realistic. They’re not meant to be. But that’s the point. Fictional leaders don’t reflect the world as it is. They reflect the world as it could be.

And among these imagined icons of leadership, there was one that stands out as the obvious choice for the first post. A frog. Green, anxious, perpetually overwhelmed, and still deeply inspiring.

Kermit has been my favorite character since I was a very little boy. Now, my son has his own Kermit puppet. Sometimes it offers him life advice (with a little help from Dad’s hand), and sometimes we just sit together and sing “The Rainbow Connection.” Kermit’s been a source of joy for two generations in our house. But he’s also something more. He’s a model of the kind of leader I think more of us could be like.

Kermit the Frog: Leading Through Inclusion

Kermit isn’t a traditional leader. He doesn’t have the force of command or the gravitas of a storied past. He doesn’t demand attention, and he certainly doesn’t try to control the chaos.

Instead, Kermit leads by including.

He makes space for pigs, bears, chickens, and whatevers. His leadership is not about being the smartest or loudest in the room. It’s about being the one who believes that everyone has something valuable to bring to the table, or the stage as it were.

In the backstage mayhem of The Muppet Show, Kermit is the only thing holding the production together. Not by sheer will, but by faith in his ragtag team. He believes that if they just get on stage, even if the magic act explodes or the chicken choir misses its cue, something wonderful might happen.

And that belief is infectious. Because this is what leaders do: they sell a vision.

Kermit’s vision, singing, dancing, and making people happy) isn’t exclusive. It grows through inclusion. And when people are invited into that kind of vision, when they’re not just hired hands but co-creators, they’re inspired to contribute. They feel a sense of belonging. They take ownership. The vision becomes theirs too.

That ethos is summed up in one line:

“Yeah, well, I’ve got a dream too, but it’s about singing and dancing and making people happy. That’s the kind of dream that gets better the more people you share it with”
—Kermit the Frog (The Muppet Movie)

Kermit doesn’t just tolerate differences. He actively welcomes them. He invites the odd, the awkward, and the out-of-step into something joyful and meaningful. And he doesn’t just expect them to contribute. He trusts they will.

That’s more than kindness. That’s a deliberate leadership strategy rooted in inclusion and in building a vision big enough for everyone.

And of course, Kermit offers a little practical advice too:

“Always be yourself. Never take yourself too seriously. And beware of advice from experts, pigs, and members of Parliament.”
—Kermit the Frog, It’s Not Easy Being Green: And Other Things to Consider

The Henson Connection: Culture by Design

Kermit’s leadership style didn’t appear out of nowhere. It was shaped by the temperament and values of his creator, Jim Henson.

Henson was known not just for his creative genius, but for the environment he fostered. His sets were collaborative, supportive, and playful. He hired people who weren’t just talented, but kind. He encouraged risk-taking and made it okay to fail gloriously in front of your peers (Fast Company).

That culture lives in Kermit. It’s why he feels so familiar. Not as a boss, but as a colleague who happens to carry the clipboard.

Kermit isn’t a parody of leadership. He’s Jim Hensons’ ideal, grounded not in dominance, but in care.

Leadership Doesn’t Always Look Like Leadership

Kermit rarely gets the credit. The glory usually goes to the act on stage, not the frog behind the curtain. But that’s part of the lesson.

Great leadership often looks less like commanding and more like orchestrating. Less like demanding perfection and more like creating the conditions where people can be their most chaotic, brilliant selves.

And when it all goes wrong, which it often does, Kermit takes a deep breath, winces at the debris, and says, “Let’s try it again next week.” Or when things are really bad, he still refuses to quit:

“Because I’m not giving up! I’m still here and I’m stayin'”
Kermit The Frog — The Muppets Take Manhattan (my favorite Muppet movie!)

That too is leadership.

Last Thoughts

Kermit wants the dream to grow. He wants to include as many creatures as he can.

He doesn’t demand to be in charge. He’s rarely in the spotlight. But everyone trusts him, because they know how much he loves what they do. And more importantly, they know he believes in them.

That kind of belief is what makes the whole show work. And that’s what makes Kermit, felt and foam and all, one of the most beautifully powerful leaders ever created, and one my all time favorites.