Ep 500 After the Deal: Ben Leonard on Watching His $6M Business Fall Apart After the Exit

·58 min·5 clips

Ben Leonard explains how Thrasio dismantled his $6M brand by deleting customer emails and turning off key revenue channels.

This episode of Built to Sell Radio features host John Morlow interviewing returning guest Ben Leonard, founder of the strength and conditioning brand Beast Gear. Leonard sold his $6 million e-commerce business to the aggregator Thrasio in October 2019 for roughly three times its Seller's Discretionary Earnings. The conversation focuses exclusively on Leonard's difficult experience after the sale, which he describes as watching his business fall apart under the new owner. Leonard sold Beast Gear, which sold primarily on Amazon and Shopify, after listing it on a generic business-for-sale website. Thrasio, an early unicorn aggregator, approached him through that site with an offer of mostly cash upfront, a small guaranteed holdback payment, and a two-year earnout. He criticizes the listing site for a valuation error that nearly cost him half a million dollars, which his accountant helped correct. After the sale, Leonard had an independent contractor arrangement with Thrasio to help launch new products for a profit share. He quickly observed Thrasio making operational decisions that damaged the brand, such as replacing effective Amazon listing content with inferior material and completely shutting down the brand's direct-to-consumer website. Thrasio also deleted the company's entire email marketing list, which had driven 30% of the website's revenue. Leonard argues these actions destroyed the integrated marketing system he built, where the website lent authority to drive Amazon sales. He calls earnouts "pray-outs" because sellers have little control after the sale, though he admits Beast Gear hit its first-year target due to existing momentum and a COVID-related sales bump. Leonard recorded a frustrated video message for Thrasio management detailing their operational mistakes as the brand's performance declined. He believes Thrasio subsequently paid his second-year earnout early, possibly because he was a public face for their European expansion. Leonard felt a strong emotional attachment to the brand, which amplified his distress as its quality deteriorated while his image was still used in Thrasio marketing. Thrasio later offered him and other sellers an all-expenses-paid luxury vacation for their families, which he viewed as incongruous with their handling of the business. Ultimately, Thrasio reduced operations to merely replenishing inventory on Amazon before entering Chapter 11 bankruptcy. The tone is raw and conversational, featuring a candid post-mortem of a deal gone wrong. The style is educational, using a specific case study to illustrate broader lessons about post-exit risks. This episode is ideal for entrepreneurs considering selling their business, especially those weighing offers with earnout clauses or from aggregator firms. Listeners who prefer only success stories or purely tactical negotiation advice might find it too negative.

As heard by us

A blunt look at how an earn out can leave a founder with money but little control.

Ben Leonard's return to Built to Sell Radio stays grounded in one hard lesson: after a founder sells, takes most of the money up front, and waits on an earn out, control can slip away fast.

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Why you'd press play

What if the sale closes, but the business starts slipping out of your hands?

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