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Ari Horowitz of Yardline Capital: “When it’s sold, get out of the way”

When it’s sold, get out of the way. When all is said and done and the transaction is done, it’s time to move on. You’re probably much better at starting companies than operating them at scale. Very few people are good at both. It’s a different skill set and mindset. As a part of our series […]

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When it’s sold, get out of the way. When all is said and done and the transaction is done, it’s time to move on. You’re probably much better at starting companies than operating them at scale. Very few people are good at both. It’s a different skill set and mindset.


As a part of our series about “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit, I had the pleasure of interviewing Ari Horowitz.

Ari Horowitz is the co-founder & CEO of Yardline Capital, a provider of growth capital and business optimization tools for e-marketplace sellers. Prior to Yardline, Ari was SVP, Strategic Partnerships and Corporate Development for Thrasio, the largest acquirer of Amazon businesses and the fastest U.S. company to reach unicorn status. During his career, he has been a senior member of teams which completed over 20 financing and over 75 M&A transactions, with a total transaction value in excess of 1.5B dollars.


Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

There hasn’t really been one specific event that led me here so much as a collection of events and decisions I’ve made throughout my career — I’ve been an entrepreneur since I was a kid selling baseball cards to my elementary school classmates — so it’s just something that’s always been ingrained in me. I’ve had the privilege of founding, selling, investing in or advising dozens of companies; it’s this passion for entrepreneurship that drives me to tackle the next big thing.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

One of the first businesses I helped launch when I was much younger involved us getting a spot at a local trade show to promote our product. Not knowing the ins and outs of trade shows and looking to save a few bucks, we decided that we would take care of all logistics on site. We borrowed our friend’s SUV to move in our stuff. What we didn’t realize or have any understanding about was that the venue staff was all unionized. We were oblivious to the dirty looks we got on the show floor while we were loading in our booth. It still didn’t compute when we got back to the parking lot, and all of the windows of our friend’s car were smashed — but nothing was taken. Years later, we finally realized what had happened, and that sometimes saving a few pennies might cost you way more in the long run.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“It’s easier to ask for forgiveness than permission” has always been one of my favorites. It’s very representative of the mindset of an entrepreneur. If you’re waiting around for someone to open the doors, you should go get another job. I also came up with “Luck is the creation, realization and exploitation of opportunity.” Idea being that you make your own luck. When you’ve got an opportunity, take it. I’ve come across hundreds of opportunities to invest in companies, but for the ones that end up being truly lucrative and successful, those are the ones that I can point to and say that I took an active role in making it happen, start to finish.

Ok super. Thank you for all of that. Let’s now shift to the main part of our discussion. Can you tell us a story about how you were able to build a business from scratch, scale and sell it to a bigger firm?

Sure, I’ve done this 5 times now in my career as an operator, and I have been involved with many more as an advisor and/or investor. I think one of the most interesting ones was when I founded a network consulting company in the early days of the dot-com explosion. I had studied another company, International Network Services (INS), which seemed to be doing something that we could also be doing. They were already trading at this crazy multiple (at the time) for a services business — at 5 times revenue. I thought, why reinvent the wheel — we could just do it as well or better. So, I took a bit from their playbook, got a hold of their S-1 filing, came up with my own business plan and raised money. I even pitched the CEO of INS at the time. He was intrigued and considered buying the company. Once I was at scale, I ended up selling it to USWeb/CKS, which outbid him. A few years later, the CEO of INS ended up joining the board of another company I founded, Opus360.

Based on your experience, can you share with our readers the “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit”. Please give a story or example for each.

Create something with growth opportunity. Is there a massive future for this business or not? For example, the company I co-founded, Yardline Capital, is focused on taking advantage of the e-commerce boom by providing growth capital to e-commerce and marketplace sellers across the U.S. Definitely a future there and the timing is right on. Timing is everything! Being too early for the right idea is the same thing as being wrong.

Demonstrate that the business model works. Find ways to show early on in the business lifecycle that what you are doing fills a customer need and has the opportunity to scale.

Take capital and take chances. When someone gives you an opportunity to scale, take it. No small company has ever gone out of business by having too much cash.

Make it easy for a buyer. What is that one thing that you need to get your buyer over the wall, and how can you help make it happen?

When it’s sold, get out of the way. When all is said and done and the transaction is done, it’s time to move on. You’re probably much better at starting companies than operating them at scale. Very few people are good at both. It’s a different skill set and mindset.

In your experience, is there a difference in approach for building a service-based business versus a product-based business when you have the intent to eventually sell the business. Can you explain?

Yes. A service-based business should make money very quickly. You can create products based on the services that your clients are buying. This can help you scale and become a more valuable product company on other people’s dime. Building a product-based business, is, well, all about the quality of the product you have and its potential. Does the product have room to grow, or has it passed its peak?

How does one go about the process of finding a buyer?

Figure out who will best serve your business; who has the best infrastructure or distribution channel to maximize the value of your products or services? This is who will pay the highest price. Or, find someone that you’re most similar to, and sell to them at a lower multiple than they’re currently trading. My company Yardline is connected to close to 60 partners; they are a core part of growing our business. Google is a good place to start, too.

How can one decide if it is better to build a business in order to exit, or if it is better to stick around for the long term and let the company bring in residual income, or if it is better to go public?

This is a complicated question as different businesses have different dynamics. For instance, if you’ve decided to take on venture investors, they’re expecting a large multiple on their capital — they’re looking for an exit, not a cash-flowing business. Businesses that require massive amounts of capital may be better to sell early on rather than continuing to suffer dilution. I think for me, it starts with your own personal desire — do you want to keep working or have you maximized the value you want to invest in this company? That’s a very personal question. It can also depend on what your risk profile is. At some point, you’ll want an advisor (like myself), someone who has the experience of looking at businesses to help figure out when the right time to sell is. In the long run, running a public company can be a great experience, too, but it’s a lot of work and there’s a lot of risk associated with failure. By staying private, longer, you have the opportunity “fix” anything before going public, which can be a real advantage.

Can you share a few ways that are used to determine a good selling price for the business? How about, the most you can get?

Usually, I would look at typical comps for the business — what’s public currently and what’s the associated value there. Though if you go that route, you may want to also trade a discount or find a way to create a win-win for the buyer. Ultimately, it’s your job to paint a picture of what you can do and what the right price is for that opportunity.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

Our whole business is built around helping sellers — across any marketplace or platform — live the entrepreneurial dream, control their own destinies and work however, whenever and wherever they want. The explosion of e-commerce is helping people turn side gigs into hyper-growth businesses. There is so much opportunity in this space, and we’re here to help people take advantage of that.

How can our readers follow you on social media?

Check out my LinkedIn @ https://www.linkedin.com/in/aribhorowitz/

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