This week’s episode of Exit Stories has a twist. it features Dallas Romanowski, an author and entrepreneurial advisor through Cornerstone Business Partners who is also the Co-Founder and former CEO of Performance Culture, which he led through a 2020 growth equity investment that provided an exit for him and early investors. The twist? Well, the Performance Culture investment was made by none other than Jurassic Capital—the same Jurassic Capital that’s led on a day-to-day basis by Exit Stories host Kevin Mosley.
From both the investor side and the entrepreneur side, Performance Culture’s exit was a slow burn. The company was founded in 2015 as the SaaS offshoot of Cornerstone Business Partners, and evolved into a provider of cloud-based performance management software. (We wrote about Performance Culture in February.) Current CEO Melissa Phillippi served as president from Day 1.
It took about three versions of their software before “PC3” really began to get them seeing profit. Jurassic Capital entered the picture in 2019 with an informal conversation between Mosley and Romanowski, but they didn’t even begin talks of acquisition until a year later. That’s when we get where we are.
Here are three key takeaways from this episode, sponsored as always by Vaco:
- Have a succession plan. Romanowski is an expert on how to create a successful work culture, after all, and an important part of this for Performance Culture was having a designated plan of succession from the start. The Performance Culture/Cornerstone leadership teams knew that company co-founder Phillippi, who was a little younger than the rest of the leadership team but had the dynamic potential to lead the company, would one day take the reins. So, way before the team set in motion a plan for Romanowski to exit, there was a plan in place in case something happened, and Phillippi was already taking the lead on things like increasing sales and creating a dynamic internal culture as a leadership partner with Romanowski.
- When it comes to record-keeping, start early and be intentional. Romanowski was keeping records about everything at Performance Culture—business deals, profits, employee stock deals—from very early on in the company. Years down the road, when Jurassic asked for the company’s records and eventually it became necessary to iron out some legal/accounting problems, they had the proper records to provide.
- Build a relationship with the right investment team. A year before a Jurassic Capital acquisition was even on the table, Romanowski and Mosley had lunch together, just to talk about what Performance Culture was up to and where it was going. The connection was so instant that the same afternoon, Romanowski told Phillippi, “If anything ever happens to me, you need to call Kevin at Jurassic Capital.” The relationship that Romanowski had with Mosley and other investors made it so that even when they had disagreements during the acquisition process, at the end of the day, their respect for each other helped them come to a solution that both parties loved.
Thank you again to Vaco for sponsoring this season of Exit Stories. You can listen to this week’s episode (and subscribe!) below: