Building a Transferable Business and Surviving the Exit with Nate Collins

In this episode of the DealQuest Podcast, I'm thrilled to welcome Nate Collins, a former CEO who managed a successful exit of his international theatrical licensing company to a large PE-backed music licensing company. Nate now works as a financial advisor and certified exit planning advisor at Raymond James, where he helps a limited number of business owners, CEOs, and their families navigate the financial and emotional terrain of growing, selling, and transitioning out of their businesses.

Nate's story is one that DealQuest listeners will find deeply relevant. He bought into a family-run licensing company on his mother's recommendation, eventually took over as CEO, transformed it from a sleepy, mismanaged operation into a data-forward, cloud-based company with best-in-class systems, and sold it at an incredibly high multiple. But the real twist is what happened after the sale. Nate experienced what researchers call the "liminal period," a stretch of years marked by feelings of worthlessness, anxiety, and loss of identity that blindsided him despite having significant money in the bank. His willingness to share that journey honestly, and the way it now shapes how he serves business owners, makes this conversation essential for anyone building toward an exit.

TRUSTING YOUR GUT ON AN INVESTMENT NOBODY WOULD TOUCH

Nate's first deal was buying into the company he would eventually run. It was a privately held business owned by about 16 different families, with equity stakes that had been handed down through generations. His mother owned shares from her mother, and when some shares came up for sale, she told Nate he needed to buy in.

By any professional standard, it made no sense. The company was mismanaged. No dividends were being paid. The CEO was drawing an outsized salary for the size of the business. As Nate put it, "had I actually looked at it from a professional investor's lens, I would have said, no way, this is crazy." But he trusted his mother and the price was low.

I found this fascinating because I've seen versions of this play out before. My former partner and I used to put together real estate investment funds, and we would see non-professional investors jump into deals that our professional analysis said to avoid. Sometimes those people made it work. It always made me wonder whether overanalysis can be its own trap. In Nate's case, the deal made no sense on paper, but after he eventually stepped in as CEO about eight years later, he turned it into something remarkable.

TRANSFORMING A FAMILY BUSINESS INTO A TRANSFERABLE COMPANY

When Nate took over in 2011, the company was, in his words, "musty and dusty." Previous ownership had been picking the fruit without watering the tree. Nobody was reinvesting in the business. The team wasn't built for growth.

Over the next eight to nine years, Nate oversaw roughly a 97% attrition rate in personnel and rebuilt the team from scratch. He invested in people, paid them well, and created what he described as the most interesting company in a very niche space. That niche was theatrical licensing, the business of licensing the rights for schools, community theaters, and professional producers to perform plays and musicals on stage. If your kid performed Annie or Grease in a school play, someone had to license the rights from a company like Nate's. It's intellectual property, and performing it in front of others without permission is theft.

When I look at what made this company attractive to buyers, several factors stand out. There was recurring licensing revenue, a professionalized management team, and a strategic buyer doing a roll-up in the space. Roll-up buyers will often pay higher multiples because they're playing a multiple arbitrage game, paying an 8x knowing they can sell at a 12x or 14x later. Several of these dynamics were likely in play here, and Nate added additional factors that drove the valuation.

THE ACCOUNTING SWITCH THAT BUILT BUYER CONFIDENCE

One factor Nate highlighted, and credited to his CFO, was the early decision to switch from cash accounting to accrual-based GAAP accounting. They did it right when Nate took over, not because they planned to sell, but because they wanted a better understanding of their own business.

That decision paid off enormously at the time of sale. Buyers had far more confidence in the financials because accrual-based accounting provides a more accurate representation of actual business performance. For any business owner listening who is still on cash accounting, this is worth serious consideration. It takes effort to convert, but when a buyer is looking at your numbers during due diligence, the credibility of your financials can meaningfully affect your valuation.

CLOUD SYSTEMS, SUPERSTORM SANDY, AND REDUCING LICENSING TIME BY 99%

Nate invested in cloud-based, best-in-class software because he hated putting out fires. He hated apologizing to clients for repeated mistakes. So he built a modern tech stack not to impress buyers, but to make the business tighter and more enjoyable to run.

The timing turned out to be extraordinary. In 2012, Superstorm Sandy knocked out electricity south of 33rd Street in Manhattan. The company's office was on 24th Street. But just two weeks before the storm, they had finalized their cloud-based licensing software. Their 20 licensing agents and their accountants were able to work from home. This was 2012, long before COVID made remote work standard, and they were fully remote and operational.

The results were staggering. The company reduced its average licensing time from over four weeks per license to under four hours. They were able to present their entire business to the buyer on a single sheet of infographics showing their workflows and the data behind every efficiency gain. And perhaps most importantly, the buyer, which was roughly ten times their size in revenue, adopted Nate's entire tech stack as the foundation for its own future growth.

THE SYSTEMS QUESTION EVERY ENTREPRENEUR SHOULD ASK

Nate's approach reminded me of something I heard years ago at a business retreat. The presenters asked a deceptively simple question. When you have any issue, challenge, or frustration that comes up repeatedly in your business, ask yourself what fully implemented system you do not have in place that would resolve it.

Nate may not have used that exact language, but he lived it. Instead of defaulting to blaming people when mistakes happened, he built systems. A system can be technology, but it can also be an operating procedure, a workflow, or a set of documented processes. The mistake many entrepreneurs make is that they see a recurring problem and immediately think it's a personnel issue. Sometimes it is. But often the real answer is a missing system.

Nate's company also maintained a written processes and procedures book. When the buyer acquired the business, Nate handed them the book and said, "this is how our entire business runs." Anyone could come in and understand 90 to 95% of the job just by reading it. Again, this wasn't done with a sale in mind. It was built for redundancy. If someone left, another person could step in and get the work done. But it made the company dramatically more transferable.

WHAT MAKES A BUSINESS TRULY TRANSFERABLE

Everything Nate described, the professionalized team, the accrual accounting, the cloud infrastructure, the documented processes, points to a principle I believe deeply. The things that make your company more valuable and more transferable to a future buyer are the same things that make your business run better, more profitably, and with less burden on the founders right now.

Too many business owners think of exit readiness as something separate from daily operations. As if preparing for an eventual sale is an extra chore layered on top of running the business. In reality, these are the same pursuit. A business that is less dependent on any individual, that has clean financials, strong systems, and a capable team, is simply a better-run business. Whether you sell it in two years, ten years, or never, you benefit.

This aligns with what Laurie Barkman shared in her DealQuest episode about preparing for successful exits through business transition insights. The preparation is the value creation.

THE LIMINAL PERIOD AND THE SMALLEST VIOLIN PROBLEM

This is the part of the conversation I've been wanting to highlight on this podcast. Nate referenced research by South African researchers who studied CEOs after they sold or left their companies. They identified what's called the "liminal period," the time between leaving one chapter and finding the next. It's characterized by feelings of worthlessness, confusion, uncertainty, and depression.

Nate experienced it for three to four years. There were stretches of four months at a time where he barely slept, managing three or four hours a night of restless sleep, flooded with anxiety. And he had all this money in the bank. As I mentioned during our conversation, this is what Dave Hersh has called the "smallest violin" problem. If someone hears you exited for tens of millions of dollars, they cannot imagine what could possibly be wrong.

Nate described it perfectly. You go from running a company where your decisions matter, where people look to you for direction, where your days are filled with feeling important. And then, as he put it, "You sell your business on Monday. Tuesday, nobody wants to talk to you. They've already dismissed you. You're gone."

PURPOSE, COMMUNITY, IDENTITY, AND HEALTH

Nate talks about purpose, community, and identity as the elements that collapsed after his exit. A business coach later helped him add a fourth dimension, health, framing the post-exit challenge around purpose, community, and health. Together, these four elements capture the full picture of what disappears.

When Nate was running his company, his purpose was supporting his team and clients every day. His community was the team and the industry. His identity was being the CEO. And then Tuesday morning after the sale, all of it was gone. No purpose. No community. No identity.

The health dimension is equally significant. Nate pointed out that for small business CEOs, the loss of a regular paycheck creates deep psychological insecurity, even when the math on their investments supports their lifestyle indefinitely. He described being convinced he'd be living out of the back of his car with his family in ten years, despite having done the math a hundred times and being an expert in financial planning. The rational mind knows you're fine. The emotional brain does not accept it.

A friend of Nate's compared what he was watching to a form of postpartum depression. Obviously a different experience on many levels, but the underlying dynamic of creating something, having it leave you, and then grappling with an enormous void applies to any major life transition, whether it's selling a company, having a child, retiring, or watching your kids move out.

FINDING PURPOSE THROUGH RELEVANCE

Nate's insight on purpose is worth highlighting because it gives shape to a concept that otherwise feels abstract. The standard advice is "go find a purpose." Nate's experience led him to a more specific conclusion. You will feel purpose when you find something where you are relevant to others, where you are improving their lives in some way.

It doesn't matter whether those others are wealthy or in need, whether you're paid or volunteering. The key is feeling that because you exist, someone's life is better. Nate found that again in 2023, roughly four to five years after selling his company. He now supports entrepreneurs and executives as they grow their businesses and transition into their next chapters through his role at Raymond James.

This theme also resonated with Jodi Hume's DealQuest episode about founder exits and the emotional journey behind major business decisions. The emotional preparation for what comes after the deal is at least as important as the financial preparation.

PERSONAL WELL-BEING AS A BUSINESS STRATEGY

Nate now runs a quarterly business exit planning workshop. In it, he walks business owners through identifying their personal goals, not just their business goals. He asks them to think about purpose, community, and health not as post-exit luxuries but as present-tense priorities.

He referenced a Dutch study that found a direct correlation between an entrepreneur's personal well-being and the success of their company. Personal well-being was actually a greater predictor of company success than the reverse. The implication is striking. If you want a more successful business, start prioritizing your own well-being today. Don't wait until after the sale.

Nate encourages business owners to start building purpose outside of their company while they're still running it. Seek community beyond your team. Invest in physical and mental health as a foundation. These actions don't just prepare you for a better post-exit experience. They make you a stronger operator right now. And more profitable companies sell for more money.

TAX STRATEGY, ASSET PROTECTION, AND THE EMOTIONAL SIDE OF ADVISING

In his current work, Nate focuses on the personal and financial well-being of entrepreneurs and executives. He's quick to point out that most people think of wealth management as just investment management. That's one leg of the stool. The other critical dimensions are tax strategy and asset protection, especially for business owners who typically have their wealth concentrated in a single illiquid asset: their company.

Nate also noted something that every advisor eventually learns. About 25% of the job is the professional expertise. The other 75% is being a therapist. Having walked in the business owner's shoes himself, and having experienced the liminal period firsthand, Nate brings genuine empathy to that side of the work. He's also finishing the first draft of a workbook designed to guide business owners through the exit process, covering both the financial and personal dimensions.

FREEDOM AS THE ABILITY TO MAKE CHOICES

When I asked Nate my closing question about freedom, his answer was clean and grounded. Freedom is the ability to make choices. Health gives you choices. Financial security gives you choices. Living in a country that supports entrepreneurship gives you choices. And some days, having those choices feels like more weight than you want. But for the most part, the freedom to make your own decisions is what makes entrepreneurship and life deeply fulfilling.

Tune in to this episode to hear Nate Collins share his full journey from accidental investor to CEO operator, through a transformative exit and a difficult liminal period, and into the purpose-driven work he does today helping founders prepare for life's biggest transitions.

Listen to the full episode of DealQuest Podcast with Nate Collins

FOR MORE ON NATE COLLINS LinkedIn: https://www.linkedin.com/in/nate-collins/ Company: Raymond James Workshop & Events: https://www.raymondjames.com/founderwealthstrategies/events 

FOR MORE ON COREY KUPFER https://www.linkedin.com/in/coreykupfer/ https://www.coreykupfer.com/

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

Get deal-ready with the DealQuest Podcast with Corey Kupfer, where like-minded entrepreneurs and business leaders converge, share insights and challenges, and success stories. Equip yourself with the tools, resources, and support necessary to navigate the complex yet rewarding world of dealmaking. Dive into the world of deal-driven growth today!