Built a $100M Agency in 3 Years—Then It Went Bankrupt. Here’s What I Wish I Knew

Built a $100M Agency in 3 Years—Then It Went Bankrupt. Here’s What I Wish I Knew Speaker 1: Hmm. Have you ever wondered what it would feel like to build a $100M agency? Have a huge exit, big headlines, helps your ego a little bit as well. Now I helped build one and then I watched it fall apart fast. Not because we didn't grow, we did. Not because we didn't buy smart, we did that as well. It fell apart because we skipped the hard stuff. The boring stuff, the real stuff that no one talks about when you're scaling fast and I want to talk you through it so you don't have to learn the hard way like we did because I've been on both sides of this, right? I've sold an agency, I've bought agencies, I've helped roll up 10 of them into a $100M machine that eventually broke down. Now, Let's get into the episode because this episode is for an agency owner chasing scale, considering a sale, or just wondering if the path you're on is the right one. So let's go ahead and get into it. Let's talk about the rollup. A few years ago, I was a part of an agency that will be nameless. The idea, rollup, successful agencies. We target firms doing over a million in EBITDA. We pay half in cash, half in equity, and stack the wins and scale to a massive exit. And at first, it was working. We acquired 10 agencies in just two years. We crossed the eight figures in EBITDA, net profit. We even hit $100M valuation. But then it all started to fall apart. So here's where everything unraveled and how you go from $100M agency to declaring bankruptcy. It was because every deal that we would buy an agency, we would have debt. And so as soon as you start taking on debt for this, you have to maintain a certain growth level with the banks. So as we bought two agencies, Our debt kept going up but our growth rate had to keep going up and so we needed to keep buying more and more agencies to keep the bank away, to keep out of default. But then when we had certain members on the board that had too much control that stopped us from buying any agencies going forward, then we couldn't grow at the rate that the bank wanted us to. Which sent us in default and it was just an internal battle because we were buying amazing agencies. We were buying really profitable agencies because a lot of people think, well, when you buy an agency, you want to buy a distressed one and turn that around. We were buying agencies that were over a million in EBITDA and giving them real cash up front. So the lesson there is make sure you put the right people on the board. Make sure you still have control where a board member can't stop. There were two people on the board that were just poison and cancer to the rest of the company. The other thing too was just the vision going forward. There was a lot of turmoil back and forth between all the owners of the direction we needed to go because we just kept focusing on money. I think that's another lesson learned or a mistake that I realized. When we wanted to do the roll-up, we were just obsessed about money. We weren't obsessed about solving a problem. We weren't obsessed about helping a particular market out. We were just saying, we're going to be the fastest growing agency. We're going to get to $100M valuation. We're going to sell it, right? And that's all we focused on rather than focusing on helping a particular market and just being the best at that. And that's where the rails started going off. And the worst part, The founders we acquired lost their second payday. Half of their deal was an equity in the agency and when it collapsed, that equity went to zero, gone. I've seen this before. When I sold my first agency, the deal looked great on paper, right? You know, cash upfront, equity in the new agency, you know, a leadership role where they're going to pay me a great salary and an earn out. But that earn out, it was almost designed for me to fail. I sold control and without decision-making power, I couldn't hit the number I needed. No matter how hard I worked, that outcome wasn't up to me. So believe me when I say this, but be damn happy with the cash you get up front because nothing else is guaranteed. Now let's talk about another lie most agency owners believe. If we combine a few EBITDAs, positive agencies, right, together, we're going to get a massive valuation. Yes, on paper, but unless you fully integrate those agencies across systems, people, culture, you know, the operations, it's not worth what you think. Now, we didn't do that. We didn't have an integration team. Each agency stayed on its own lane, a separate Slack channel, separate tools, separate chaos. It felt like a bunch of little businesses operating under one logo. And here's the crazy part, right? These weren't distressed agencies. They were all profitable. They were not overworked. Many were owners doing great. And when I talked to these founders, I asked them, Why do you want to sell? You're making great money, you're not killing yourself. And I actually discouraged some of them, not because I thought this agency would fail. I genuinely believed in what they were building. But I always told them, and this always made me feel better, make sure you're happy with the cash upfront because nothing is guaranteed. And I'm so glad I said that because some of them, their first check was the only thing they ever got from this deal. Now, if we have a followed an eight system framework that I laid out in my book, Accelerating Your Agency, things would have been very, very different. Here's where we failed. In System 1 in the book, we never defined where our agency wanted to go post-acquisition. No unified mission, no shared vision, just noise. In System 2, we really had a specialization. We stayed in the generalist column. Everyone was selling everything to everyone. That gave us no market authority and really zero leverage. You know, also to our scalable offering, you know, there was no really standard offered across the agencies. There was no productization for the services. Every agency had its own pricing, its own scope, its own mess. And lastly, in the last system, I talk about leadership and control, and this was a dagger. We gave power to people that didn't align. We had, you know, board seat that the original founders were just empowered. It wasn't just disorganized. It was disoriented. Now, let's talk about the right way to scale, right? Where you actually love your business again. And within Agency Mastery, we built a community that I wish I had where agency owners don't just grow, they grow smarter together. It's not about one guru handing out formulas. It's about a group of really seasoned agency owners sharing what's actually working right now. We sharpen each other, we push each other, we hold each other accountable to building their agency so they don't burn out. And here's what we believe. I want you to get a sheet of paper. And put your fist on that sheet of paper, draw a circle around your fist. Then for 30 minutes, I want you to concentrate on writing everything that you hate doing in your agency from project management to account management, selling, managing, hiring, whatever it is outside that circle. After you do that for 30 minutes, then I want you to spend 15 minutes concentrating inside that circle. What's everything that you love doing? And then when you're done, look at it. And then you can say, man, I need to get rid of this project management. How do I do that? I need to hire a project manager and I need to get rid of sales. I need to hire salespeople. I hate managing people. I need to hire a manager or hire people that can manage them themselves. That's what you need to do. Design a role that actually you want and you build around it. You want to scale with clarity, not complexity. Most agencies don't need more people. They need more focus. They need clear goals, clear accountability, shared ownership. You have to own your own niche. Generalists survive, specialists scale. The more specific your positioning, the faster you grow. Also, productize your core offer. One offer, a clear outcome, repeatable delivery. It's how you scale without drowning in your own work. And then also, you got to build the business you don't want to escape from. That's the real freedom. And ironically, that's what makes your agency most valuable if you ever do decide to sell. So if you think you're chasing growth through acquisition, I want you to slow down. If you're fantasizing about selling, ask yourself, Why? Because the grass isn't greener on the other side. The grass is greener on the side you actually water. And you don't need to sell to get your way out. You need systems, you need clarity, you need control. And let's build an agency you never want to escape. If this hits home, I want you to subscribe, share it with, you know, your other founders or another agency owner who's wrestling with the same questions. And also grab a copy of my book, Accelerating Your Agency. That's the framework that we use every day inside Agency Mastery. So let's do it the right way.