Motivated by the freedom to control his own life, Xerxes Wania took one look at his first paycheque and realized the job world was not the right path for him.
After working as an employee for a few years, a recruiter offered him another job. Tired of being an employee, he responded that he wanted to work for himself. The recruiter offered him a contract instead; he took it and founded his first company, a consulting business called Xentec.
After selling Xentec and his second company, Sidense, Xerxes is now a startup advisor and semi-retired entrepreneur.
Now focused on his two passions (woodworking and dogs) while remaining an active Peerscale alumni, Xerxes sat down with Peerscale to describe his two exits and share his advice for what every founder needs to do if they plan to sell their company.
A corporate double-double
Xerxes founded Xentec as a consulting company in 1997 when he got his first contract work. He anticipated that he’d work for himself and have the freedom he desired, but the business took off in a different direction.
“I soon realized the company [that contracted me] was giving me way too much work,” Xerxes said. “I had to hire people to subcontract work to. Soon, we were at 12 people. Then I realized I had a company and started writing a business plan. I had no formal business training, so I didn’t take any money from investors.”
Less than three years later, Xerxes sold Xentec to InSilicon. He stayed at InSilicon for about a year before it, in turn, was acquired by Synopsys. Despite building a profitable company that “never skipped a paycheque,” Xerxes said he didn’t initially give himself credit for the business’ success because of the public’s skeptical mentality towards tech-related companies that were founded and sold close to the early 2000’s tech bubble burst.
Xerxes worked at Synopsis after the InSilicon acquisition for about a year, but left afterwards and took nine months off in a mini-retirement. During the spring, summer, and fall he took off, he looked back to realize he built a profitable company with a good culture that was the exception, not the rule, of the “crazy 2000’s”. He also realized that this initial freedom wasn’t all it was cracked up to be; he needed something to do.
Talking to friends, an opportunity came up to advise a couple of startups. He landed on one with two technical founders who needed some business expertise.
After talking to the founders and conducting due diligence on one of them – called Sidense – regarding their technology, Xerxes was committed to the growth of the company. He joined full time, invested, and helped them raise over a million dollars in angel funding.
In the first ten years that Xerxes led Sidense, he recalled there were three or four opportunities to sell the business but it was either not the right time or not the right acquirer.
Eventually, though, selling became the desired option.
“In year ten, we started getting tired,” Xerxes said. “We started thinking how we were going to position ourselves to either take the company to the next level and get more funding, or exit. We decided on the exit.”
Xerxes was familiar with the exit process from Xentec and so Sidense began to make sure they were on track for a smooth exit once they found the right buyer. The company then hired bankers to help them source a buyer because, as Xerxes said, “as soon as you get a banker involved, [potential acquirers] know something is going on.”
Synopsys ended up buying Sidense, giving Xerxes a second exit to the same company, but the acquisition had nothing to do with his connections.
“We had three offers,” he said. “We rejected one but had two serious offers. We took the one that was the best fit. That turned out to be Synopsys.”
Preparing for exit
Sharing his advice for founders who are looking for an exit, something he’s done privately to help fellow Peerscale members but is now more public about his opinions, Xerxes said there’s both the personal and the business side, with the personal arguably being more important.
“You really need to prepare yourself,” he said. “I think some CEOs are so involved on the business side that they never have time for themselves. Then all of a sudden you have this infinite amount of time to yourself and you start feeling worthless. But it’s exactly the opposite; now it’s your time. You need to take care of yourself first.”
Continuing his advice, Xerxes was blunt that he believes founders should be selfish when thinking about what’s next.
“Personally, I believe founders need to start thinking not from a corporate standpoint but from a selfish standpoint,” he continued. “Thinking about what you have been doing and what you should be doing to make yourself happy – and really dig deep.”
On the business side, there is the obvious advice about getting your books in order, which Xerxes advocates hiring a good CFO to help with. But you also need your culture in order to help ensure a smooth transition, so “get a good HR person involved early on,” he advised.
But his real advice is to be a better salesperson.
“Talk to people who have had exits; talk to acquirers,” Xerxes said. “Everybody is a bit different. You have to figure out exactly what that company is looking for – and have it in your pitch.”
Xerxes and the Sidense team spent about four months on their pitch deck, which they further tailored to each different acquirer.
“If you emphasized how profitable you were but the acquirer didn’t care because they liked your IP, you’re doing the wrong pitch,” he said. “Our deck was about 25 pages. We would have 20 common pages, more or less, and five would be tweaked based on the acquirer and what we thought their interest was.”
Finally, he cautions founders to not get too wrapped up in their own history and perception.
“You’ve been doing it for such a long time so you think a certain thing is the product or the future,” he said. “You’d be surprised.”
After two successful exits and nearly 20 years as an entrepreneur, Xerxes is now firmly focused on his passions and vision for his life.
While planning the second exit, Xerxes realized “at this stage of my life, I did not want to start something again”. So he played the scenarios out in his head. Buying real estate seemed too involved. Going to the beach seemed too lazy and boring. And then he thought back to his childhood.
“I realized I always liked dogs,” he said. “It’s such an obvious thing. But it was a very big deal for me because I couldn’t own one. So I’d stay home, do the woodworking I’ve always wanted to do as well, and play with dogs.”
Taking his passions for dogs and woodworking, and merging it with his passion for business, Xerxes designs and sells custom furniture in his spare time and started investing in a franchise called Dogtopia. The franchise builds indoor leash-free zones for dogs and has trainers on staff to help train dogs who need it. With the franchise investment and woodworking side-hustle, he keeps his business mind sharp, something he uses to advise multiple startups, both as a Peerscale alumni member and on his own.
These days, Xerxes spends his time volunteering with dog rescue organizations, supporting Dogtopia, advising startups, and making custom woodwork that he sells on Etsy. To him, it’s freedom.