Cathryn believed her earnout target would be straightforward, but the buyer centralized decisions before building the operational capacity to handle them. Delayed purchase-order approvals caused inventory shortages, demonstrating that an earnout can depend on the acquirer's execution rather than the former owner's effort.

The earnout was tied to post-sale performance
The buyer reduced the internal team's autonomy
Purchase orders could not be approved before a CFO was hired
Missing inventory undermined first-quarter performance
Cathryn eventually stopped counting on the earnout

“so many times when it could, like, fall through at any moment.”
Cathryn Lavery · 40:43

“they like we're trying to build the plane as they're flying it”
Cathryn Lavery · 44:44

#earnouts#private equity#acquisitions#inventory

Hot Take· 1

Hot Take44:44

Fast Growth Can Turn a Successful Company Into a Prison

Cathryn still loved Best Self when she sold it, but disliked the operating structure she had built around it. Historic growth created pressure to beat each year's results, while a larger team made flat or declining revenue feel like a threat to other people's livelihoods.

Success established increasingly demanding annual benchmarks
A larger payroll reduced strategic flexibility
Responsibility for employees intensified growth pressure
Founder exhaustion can coexist with brand loyalty
Selling created space for Cathryn to breathe and reassess

“I kind of built my own prison because we're always because we grew so fast and had success.”
Cathryn Lavery · 44:44

“it's really difficult to like move or shift things whenever you have that risk involved.”
Cathryn Lavery · 45:35

#founder burnout#growth#leadership#business sale

Explainer· 1

Explainer19:16

Why a Three-Month Journal Created a Four-Times-a-Year Business

The Self Journal's three-month format matched Cathryn's preferred way of pursuing goals while naturally increasing purchase frequency compared with annual planners. Best Self reinforced repeat purchases by teaching customers how to use the journal successfully through examples, content, resources, and goal-specific guidance.

Shorter horizons make goals easier to adapt
A three-month consumable creates more frequent repurchase opportunities
Customer success is essential to retention
Examples reduce the thinking required to begin
Useful content supported the core product

“And that really was around the framework of how we look at goals.”
Cathryn Lavery · 19:22

“if you can sell it once, how do you get people to come back?”
Cathryn Lavery · 20:24

#retention#goal setting#product strategy#journals

Story· 4

Story08:46

How a $15K Goal Became a $322K Crowdfunding Launch

Best Self's crowdfunding campaign reached its $15,000 public target in a day and a half and raised roughly $322,000 within a month. More than 10,000 presold units enabled the team to manufacture approximately 30,000 journals and establish the company without another funding round.

The public goal was $15,000 while Cathryn's private target was $200,000
The campaign raised about $322,000 in one month
More than 10,000 units were presold
A larger production run reduced unit costs
The launch funded the company's initial operating base

“We hit that in a day and a half. Wow. And then we raised like 322,000 in a month.”
Cathryn Lavery · 08:46

“So we never had to raise money again.”
Cathryn Lavery · 09:08

#crowdfunding#best self#startup story#ecommerce

Story12:51

The Operational Mayhem Behind $6.8M in Second-Year Sales

Best Self grew from a two-founder operation into a multimillion-dollar ecommerce company while learning operations in real time. The company made about $2.3 million in its first year, later reached roughly $6.8 million, and won two Shopify competitions, but the team still lacked mature systems and hired operational support later than Cathryn believes it should have.

The founders handled nearly everything for the first six months
The first hire focused on customer support
First-year sales reached approximately $2.3 million
The following scaling period reached roughly $6.8 million
Fast growth outpaced the founders' operating experience

“I think operationally we could have used someone much earlier than we find someone”
Cathryn Lavery · 13:31

“And it was just like mayhem.”
Cathryn Lavery · 16:42

#scaling#operations#shopify#hiring

Story34:22

How an Inventory Audit Exposed a $230K Embezzlement Scheme

An inventory manager diverted bulk-order payments to personal accounts and concealed shipments by editing existing third-party logistics orders. Cathryn uncovered the scheme after investigating unauthorized Amazon inventory, comparing the 3PL records with Shopify, recovering deleted emails, and tracing edits back to the employee.

Unauthorized Amazon sales triggered the investigation
Possible causes were narrowed to counterfeiting, supplier misconduct, or stolen inventory
The employee initially appeared merely negligent
Recovered emails revealed personal Stripe and PayPal invoices
Edited 3PL orders did not match Shopify records
Cathryn supplied evidence that led to an arrest and felony plea

“because we didn't have like good audit systems”
Cathryn Lavery · 35:12

“And then I contacted the three people. I'm like, who edited these orders? And they told me it was him.”
Cathryn Lavery · 37:09

#embezzlement#inventory#fraud#auditing#ecommerce

Story48:02

Why Cathryn Bought Best Self Back 14 Months After Selling It

Fourteen months after acquiring Best Self, the private-equity buyer decided to shut down and return remaining funds to investors. Cathryn initially rejected the idea of returning, then journaled about how she could operate the company differently and negotiated to reacquire it in January 2024.

The buyer had acquired three brands before abandoning the strategy
Most of Best Self's former team had already been dismissed
Cathryn's first reaction to a buyback was no
Journaling helped separate the brand from its old operating burden
She saw value in the existing products, sales, and brand
The reacquisition offered a clean slate

“they called me at 12 months in like actually 14 months Post-acquisition. We're like, hey, we're shutting down.”
Cathryn Lavery · 48:02

“how could I do it differently this time?”
Cathryn Lavery · 48:47

#buyback#private equity#best self#second chance

Takeaway· 4

Takeaway11:38

Why Crowdfunding Delivery Estimates Need Extra Time

Best Self promised delivery by Christmas, but international backers received their products weeks later because manufacturing and holiday shipping took longer than expected. Cathryn recommends adding a meaningful buffer to any fulfillment estimate rather than planning around the best-case timeline.

Campaign promises create real customer expectations
Manufacturing, ocean freight, and final-mile shipping compound delays
Holiday congestion affects regions differently
International fulfillment needs extra contingency time
Transparent communication helps when estimates prove unrealistic

“take the time that you think it's going to take and then add like.”
Cathryn Lavery · 11:38

“we were on an unreasonable with our expectations.”
Cathryn Lavery · 12:18

#fulfillment#shipping#crowdfunding#customer experience

Takeaway28:47

The Hidden Cost of Avoiding Hard Co-Founder Conversations

Cathryn's co-founder stepped away from daily operations while retaining half the company, leaving her constrained on decisions until a lengthy buyout concluded in 2020. She attributes much of the later pain to postponing difficult conversations and assuming that an equal split was automatically fair.

A 50/50 split can become unfair as contributions diverge
Avoided conversations become more expensive over time
Vesting could have reduced the risk of inactive ownership
Charm and confidence can distort early assessments of contribution
Cathryn ultimately took personal debt to complete the buyout

“a lot of the pain that I put myself through. And later business here is started because of my inability to, like, have a hard…”
Cathryn Lavery · 28:53

“fair doesn't mean equal.”
Cathryn Lavery · 28:53

#cofounders#equity#vesting#conflict

Takeaway39:33

How Cathryn Made Best Self Sellable Before Taking an Offer

After the partner dispute and embezzlement losses, Cathryn focused on profitability and making Best Self transferable even before deciding whether to sell. When one offer proved unattractive, she opened more conversations through her network and accepted exploratory calls until a better buyer emerged.

Profitability and operational independence increase sellability
A capable CEO made the eventual transaction possible
The first offer did not justify selling
Informal founder networks can surface buyers
Deals can collapse even after extensive due diligence
Cathryn did not celebrate until the transaction actually closed

“how do I set it up so I could sell it if I wanted?”
Cathryn Lavery · 39:33

“I'll say yes to any conversation.”
Cathryn Lavery · 39:58

#business sale#acquisition#due diligence#exit

Takeaway42:03

Selling the Company Revealed Cathryn's Productivity Addiction

During her post-sale break, Cathryn built projects, learned plumbing, and studied coding, yet felt useless because those activities did not generate money. The experience exposed a scarcity mindset and the extent to which productivity, earnings, personal value, and self-worth had become entangled.

Cathryn took roughly 14 months away from operating the company
She pursued hands-on projects and learned new skills
Noncommercial work initially felt valueless
Financial security did not automatically remove scarcity thinking
Rest required redefining worth beyond measurable output

“well, nothing I did today made money. so I'm actually useless.”
Cathryn Lavery · 42:17

“it took me a while to, like, detach the being productive and making money and like being in a scarcity mindset.”
Cathryn Lavery · 43:05

#self worth#productivity#scarcity mindset#burnout

Frameworks in this episode

Clean-Slate Constraint Rebuild

Crowdfunding Launch-Pad System

Problem-First Product Development

Insights & moments

⚡Myth Buster· 1

Why a Reasonable Earnout Can Still Be Outside the Founder's Control

◆Hot Take· 1