The DENNIS System for Selling a Company
A six-stage sale process borrowed from It's Always Sunny: demonstrate, engage, nurture, neglect, inspire, sell.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 6
- Confidence
- 92%
Shaan reframes selling as running a sales process, because most companies are sold, not bought. The six stages spell DENNIS. Demonstrate value: identify whether a buyer's reason is financial (revenue, EBITDA) or one of six strategic reasons, including the CEO simply finding it interesting, a new executive needing a big signal move, catching up to a surging competitor, synergy where one plus one equals three, fear of you, and unique talent. Engage physically: reach out to executives, corp dev, investors or advisors, with the only goal being an in-person meeting. Nurture dependence: find their pain and offer a cure, packaging yourself as the solution. Neglect emotionally: run multiple buyers in parallel, go cold occasionally, and leave breadcrumbs. Inspire hope: come back with we have other options but we want you, make it time-sensitive. Sell entirely: clean closing terms, a good lawyer and accountant, and sprint hardest exactly when a term sheet makes you want to relax.
Origin
Shaan first delivered this as a Hustle Con 2019 talk after selling his first company, then re-recorded it as an MFM masterclass with the Milk Road lessons added, naming the stages after the DENNIS System from It's Always Sunny in Philadelphia.
Core principles
- 01Most companies are sold, not bought
- 02Every buyer has a financial or a strategic reason, and you must name it
- 03One choice is no choice
- 04You want lust, not love, and clarity, not trickery
- 05Deals fall through, so never get emotionally too high or too low
How to run it
- 1
D: Demonstrate value
Work out why each specific buyer would buy. Financial reasons are obvious revenue and EBITDA, which most companies do not have. The six strategic reasons are: the CEO finds it interesting, a new or newly promoted executive needs a big signal move, they are catching up to a surging competitor, synergy where one plus one equals three, they are afraid of you, and you hold unique talent.
Pro tip Adobe buying Figma is the catch-up case; Uber merging with Didi is the synergy case; Facebook buying Instagram is the fear case.
- 2
E: Engage physically
Reach out to executives, corp dev, investors who can introduce you, or advisors. The soft open is I want to discuss a partnership on how we might be able to work together; the aggressive open is that you have an offer and want to talk before deciding. The goal of the outreach is nothing more than an in-person meeting.
Pro tip An email to a CEO from their biggest investor gets taken seriously. Shaan got a Discord meeting the next day this way.
Watch out Cold works, but a relationship built over time with light updates works far better.
- 3
N: Nurture dependence
Tap into emotion with clarity, not trickery. Interview an insider to learn the buyer's top three priorities and which one is stuck and needs bolstering, then trim the fat from your story so you are the answer to that specific problem. Find their pain and offer a cure.
Pro tip Also ask which initiative has the most buy-in, what fires need putting out, and who they are most afraid of.
- 4
N: Neglect emotionally
Do not go all-in hot on one partner. Start conversations with 10 or 20 buyers at once, narrow down, and try to land multiple offers in the same week so you can tell each that another offer exists. Go cold occasionally to make them sweat.
Watch out Do not push the cold period too long; the aim is leverage, not a lost buyer.
- 5
I: Inspire hope
Go back to your preferred buyer and say you have other options but you want them, then name the specific terms that need to improve. Attach a real time constraint: the other offer will not sit around, and you cannot blow it for your team by waiting.
Pro tip Frame it as best fit rather than as an auction, so the buyer keeps face while raising the offer.
- 6
S: Sell entirely
Have diligence materials ready, keep the closing terms clean, and hire a good lawyer and a good accountant. When the term sheet lands, sprint instead of relaxing: cancel everything else and spend the days chasing lawyers, the data room and the accountant. Do not burn bridges with the buyers you reject, then celebrate rather than settling for relief.
Watch out Milk Road eventually sold to a buyer who had been rejected at the last minute, purely because neither side burned the bridge.
In the wild
While selling, Shaan went to an investor who was also an investor in Discord and told him Discord might want to buy the company. The investor emailed the CEO directly. Because the email came from their biggest investor, it was taken seriously.
→ Shaan was in a meeting with the CEO the next day, pitching why one plus one could equal three.
During the Milk Road process, Shaan's team rejected a buyer at the last minute, but neither side burned the bridge. Later they went back and asked whether the buyer was still interested.
→ The rejected buyer was still interested and Milk Road sold to two private buyers.
Common mistakes
Negotiating with one buyer at a time
One choice is no choice. If only one company could buy you, you effectively have zero buyers and zero leverage. Sequential conversations kill the parallel offer timing that generates any negotiating power.
Relaxing when the term sheet arrives
Founders see the big number and take a moment to relax. Shaan's deal doula told him this is exactly when you sprint the hardest, because the gap between term sheet and close is where deals die.
Burning bridges with rejected buyers
Deals fall through as a matter of course, so you often need to go back to somebody you turned down. Saying no without integrity and grace removes the fallback that eventually closed Milk Road.
Pitching your features instead of their problem
Most founders walk in listing what they do and why they are great, feature by feature. That tells the buyer nothing about why they want you, which is why the story has to be trimmed down to their stuck priority.
Is it for you?
Best for
Founders of good-but-not-Instagram businesses who must actively run a sale rather than wait to be bought
Not ideal for
Founders with inbound offers from multiple strategics already competing for them
From the transcript
“So, I'm going to take you through the Dennis system of how to how to sell your company.”
“So, stage one, the D, demonstrate value.”
“Last one, neglect emotionally, the Dennis Reynolds special.”
“And last thing, one choice is no choice.”
“This is when you need to sprint the hardest.”
From the episode
Shaan's Masterclass: How To Sell A Business For Millions
Shaan's Masterclass