Aaron and I Divested Mount Olympus Awards, LLC

Recently, Aaron and I sold all of our Mount Olympus Awards, LLC membership units as part of an intrafamily transaction that allowed us to divest both the operating assets and intellectual property related to the letterman jacket and letterman jacket award industries.  While we considered multiple strategic alternatives, including selling to a private equity buyer, selling to a competitor, hiring permanent management to run the business in exchange for a share of profits, or putting the retail side of the business into run-off so we could focus exclusively on repeat institutional business that could continue pumping out cash for years with nearly no infrastructure or customer service commitment due to the highly automated and scalable nature of those relationships, this was among the best possible outcomes because it achieved several goals:

• It allowed us to divest our ownership entirely so we didn’t have to devote any mind share or thought to the business, thus freeing up even more time to focus on making Kennon-Green & Co. a world-class global asset management firm.
• It allowed people we love to add a wonderful economic engine to their operating business portfolio.  As importantly, that wonderful economic engine is squarely within their circle of competence given my family’s nearly quarter-century experience in the letterman jacket industry.  This means they not only have an opportunity to grow the company using their existing core competencies, but that the business has a good chance of staying healthy in the future thanks to their stewardship.  We care about the company.  We worked hard to establish the brand equity that made Mount Olympus Awards the go-to supplier of varsity letters and varsity jackets to schools, universities, academies, film studios, television production companies, magazine publishers, businesses, and more.
• It protected our existing family business relationships.  As many of you know, I’m a big believer in something called concurrent benefit – taking an action that can result in cascading payoffs with little or no additional labor or cost.  When Aaron and I decided to start a letterman jacket award retailer back in college, one of our motivations was the fact that we could use my parents’ manufacturing business as a primary vendor.  This meant that our growth became their growth as costs to us were revenue to them, allowing various members of the Kennon family to capture the near-entirety of every dollar that flowed into the merchant bank account somewhere along the supply chain.  Had we sold to a competitor, it is possible they would have wanted to redirect their vendor relationships to a different supplier.

As with my resignation as the Investing for Beginners Guide at About.com after nearly seventeen years, it was bittersweet saying goodbye to something that has been such an integral part of my life and career over the past twelve years. For several days after selling the ownership, I felt a bit like something was missing.  This company, which had been ever-present in my day-to-day life, was suddenly not there.

As I reflect back on it, I’m proud of what we did.  Like any great business, Mount Olympus Awards was the gift that kept on giving.  On modest capital outlays, it produced cash flows that let us buy our home when we were 25 or 26 years old, filled that home with furniture, put great food on the table (not to mention a great cookware collection that makes preparing it a joy), kept the fireplaces lit in the winter, funded our retirement accounts, and wiped out our student loans for the portion of our education, room, and board not covered by scholarships during our undergraduate years.  It made sure we never had to worry about having health insurance.  It allowed us to have the newest and best technology.  Whenever I wanted to buy more ownership in a great company, I knew I could raid its coffers to fund the purchase, extracting the dry powder as a member distribution.  It gave us near total control over our schedule – after the start-up years and prior to our transition into asset management, Aaron and I could wake up when we wanted, work when and how we wanted, spend our days doing what we wanted, and go to bed when we wanted.  As long as we protected and nurtured it, it gave us independence.  It was a testament to its importance that at some point it became just another one of multiple cash generators as we used its cash flow to build other income streams, allowing it to matter much less to us on a relative and absolute basis.  It was a platform, a catalyst, a classroom, and a tool.  In a lot of ways, you might say that it helped us give birth to Kennon-Green & Co. as many of the lessons we learned in entrepreneurship and the practical aspects of starting and running a business resulted from it being in our lives.