Thirty-One Gifts founder Cindy Monroe took on a growth equity partner in Kanbrick, the investment firm led by former Warren Buffett deputy Tracy Britt Cool and Brian Humphrey, in July 2020. While she remains with the company, and still has ownership in the business, she stepped aside as CEO.

"We had been experiencing several years of decline," Monroe says. "So, we grew the business to over $700 million; it was operating around $300 million. And I was at the point of, I felt like a really good entrepreneur and CEO during growth and scaling the business, but I was really looking for someone to come in and help turn the business around. And I was looking for a partner; someone to really come in, help build that executive team for the next season of the business and to expand the business.

"So, it wasn't just looking for funding and private equity, but I really wanted that long-term partner. And that's where I went through a whole process of looking at all the options and different investors, partners, and came across Kanbrick. They were a very new company. So, we were actually their first deal. But they had recently worked with Pampered Chef, which was a Warren Buffett company, and they were able to turn that business around — same industry as we are. So, they had been through turning Pampered Chef around the last five years. So, they knew our industry, they knew the type of business. And they wanted to be a long-term partner, they weren't just looking to come in for a few years and sell the business. So, it really aligned for us."

The process of finding that right investor for the long-term required networking. She reached out to all the contacts she had to let them know that what she was exploring and what she was looking for. She reached out to the company's industry association — the Direct Selling Association, for which she's served on the board and been a part of for many years. A connection gave her a list of about 20 contacts that would be interested in a direct sales company, and that, ultimately, is how she connected with Kanbrick.

"They were not public at the time, so it's not like I could just go out to a website," she says. "I would not have found them or realized that Tracy (Britt Cool, Kanbrick co-founder) was even starting this if it had not been through a contact."

To get the company ready for the sale, Monroe says she wanted to make sure that the company was positioned as well as possible.

"We had actually taken on some debt with several macro things that were happening, as well as some decisions around our building lease, and things like that," she says. "So, I was trying to make sure that we were as clean as possible."

She says she also wanted to be as upfront as possible.

"I would make sure that anytime you are connecting with someone that you're putting everything on the table," Monroe says. "That is my style of leadership anyways, but putting it all on the table, telling them the good, bad and the ugly. I think that it builds that trust right away. And whenever I was doing that, they wanted to continue with the conversations."

Overall, she says they didn't run a lot of personal items through the business so there wasn't much to clean.

"But I would say if you are running personal items, such as cars or whatever, through the business, clean all that up before you actually go into some of these conversations, and they will not feel like there's any surprises because I don't think anyone likes surprises on either side of it," she says.

When it came to the negotiations, she says the long-term partnership was definitely a hot button for her, as well as owner compensation, continued involvement, and knowing what's going on.

"I was so public with the business as being the founder," Monroe says. "And so keeping that founder title and things so that it supported my reputation and image as well as the company's was really important. And then just taking care of our sales field, our customers and our culture and how we had built that was definitely some of my hot buttons."

When it comes to things she'd do differently, she says while the parties get down into the details through due diligence around the numbers and the contracts, there were what she calls softer things that were discussed but didn't get put into writing. Those included role clarity, culture, the timing of how some things are going to roll out through the transition are important but overlooked as the negotiators have their heads down in the weeds of the transaction details.

"Sometimes you focus on so much of the deal and getting it over the line that you don't spend as much time on, what is the first three months, six months, first year look like?" she says.

"I think that that's one thing I would have done differently."