Brasch: Serial Entrepreneurship a Growing Trend
This is the first article in a series about business acquisitions. Nebraska business owners tell Nebraska Entrepreneur about the acquisition process, what they learned and how they knew the timing was right to sell.
When he started his first business nearly 40 years ago, John Brasch never thought he might one day sell it — or that he might one day become a serial entrepreneur.
But that’s just the path Brasch has taken in the last 10 years.
Brasch’s first business, International Management Services, was founded in Lincoln in the mid-70s to sell bathing systems to nursing homes outside the United States. That company morphed into Senior Technologies Inc., which manufactured safety products used by caregivers to provide better care to patients with dementia. His product line included WanderGuard®, a departure alert system that would notify caregivers if a patient attempted to wander from a facility.
When the time came to decide on a plan for the company’s future in the early 2000s, like many business owners, Brasch first turned to his children to see if they wanted it. But, he said, challenges existed with making that work – including a lack of interest.
“Many businesses don’t last through two generations,” he said. “If your kids are sincerely interested in starting a business, you might help them start a business of their own.”
When his children decided they did not want the company, Brasch began to consider selling it.
Among his top considerations was whether the timing was right.
“Timing matters a lot,” he said. “Sell too soon and you leave money on the table. Wait too long and risk increases.”
In July 2002, Brasch sold the company to Stanley Works, but continued to serve as CEO of the newly created Senior Technologies Group division for two years during the transition.
He did, however, continue to stay on as president and managing director of another business he had founded in London in 1996, TurunUK, Ltd., which distributed Senior Technologies products. He continues to run the now-larger European company today.
Brasch’s other entrepreneurial activities include founding Nebraska Angels in 2006, which serves as a non-profit networking link between angel investors and entrepreneurs; founding the J Brasch Corp. in 2009, which develops electronic patient safety products for home and industrial healthcare industries; and serving as assistant vice chancellor of technology development for the University of Nebraska, where he oversaw the predecessor of NUTech Ventures, which facilitates technology development and transfer within the university community.
Brasch’s ventures in the past 10 years have laid the groundwork for serial entrepreneurism, a trend he said has gained strength in recent years.
“A serial entrepreneur gets the business up and running to a particular level, then sells it and uses the capital to diversify the owner’s financial interests. They break their financial dependency on the health of the first company,” Brasch said. “Then they use the money to start another company a year or two later.”
When most people start a business, they want to own it for life. That works well for a lifestyle company, such as a restaurant, a mechanic shop or a pet grooming business, Brasch said. Serial entrepreneurs, however, see opportunities to grow a business rapidly, especially in the software, medical and green technology industries.
“For people in a business that has the potential to grow rapidly, being a serial entrepreneur is an idea people should consider,” Brasch said.
Not only can serial entrepreneurship impact a person’s agenda by diversifying his or her financial investments for retirement, but it also helps protect and attract investors. Investors, for example, only get their money back when the business either goes public or is sold.
“Investors want to know your exit strategy,” he said. “If there is no exit, they may never see their money again.”
Brasch recommends entrepreneurs consult with good accounting and legal professionals when embarking on a sales negotiation.
“You need good professional advice with people who have experience making deals, especially when it comes to understanding the ins and outs of taxes and guarantees you are expected to make after you sell,” he said.
Reflecting on entrepreneurship, Brasch said some people have a knack and a drive for figuring out the puzzle of starting a business. While some people like stability and routine, others find the challenge of starting something new a thrill. What works so well for serial entrepreneurs is that they can regularly move on to a new job where they can rejuvenate their careers. And it works well for the company, Brasch said: Few entrepreneurs are good at starting things and then managing for the long term.
“People only do well for about five to seven years in a job,” he said. “That’s when their creative power, energy and idea peaks. If they move on to something else, there is a whole rebirth of fun that goes with being creative in a new project.”