Welcome to the first episode. exit strategytalks about what really happens when founders sell their business. There are difficult decisions, lucky breaks, and lessons learned from doing them.
To get things started, I sat down as follows: Keith Schacht, Co-Founder of Mystery ScienceEducation startup sold to Discovery Education for $140 million. Keith’s story isn’t just about a big paycheck, it’s about timing, focus and the courage to start over.
Knowing When to Sell
Keith got tired and didn’t sell. He sold because his timing was perfect.
As he watched the edtech world heat up, especially during the pandemic, he realized something important. The mystery science was that it was worth more to the buyer than it was to itself at that moment. Rather than wait for growth to plateau, he and co-founder Doug decided to sell while the market was hot.
“We saw a wave of consolidation coming,” Keith said. “I don’t want to sell when I need to, but I want to sell when I can.”
Takeaway: Stay informed about your industry. If your business is thriving and the market has peaked, now may be the ideal time to exit rather than doubling down.
Structure your deal on your terms
Keith and Doug made one point clear. They didn’t want to sell everything.
They spun off the school-focused part of the business for Discovery Education and kept the consumer side for themselves. They also negotiated not to stay on after the sale, allowing them to explore new business immediately.
“We wanted to keep the creative parts that were most important to us,” explains Keith. “This makes the deal work for both parties.”
Bottom line: Think carefully about what you sell and what you keep. The best deals give you both liquidity and freedom for your next steps.
How Mystery Science Got Widespread
What is one of the biggest secrets of mystery science? There was almost no sales team.
Instead, they built their growth around referrals. 95% of new teachers come from other teachers. Keith borrowed strategies from consumer technology and applied them to education.
“We designed it to go viral,” he said. “We made it easy for teachers to share if they like it.”
Bottom line: Find natural sharing loops in your customer base. Building tools and incentives around this lets users do the marketing for you.
Survive Live Action
Selling a business isn’t just about finding a buyer, it’s about staying sane and surviving through due diligence.
Keith and Doug kept their process rigorous, involving only a small number of trusted team members and hiring top-level legal support. They documented everything in advance so there were no surprises.
“The diligence process is like a combination of gratitude and therapy sessions.” Keith laughed. “You need a professional in your corner.”
Bottom line: Get organized early, hire a good advisor, and protect your time. The best founders keep their businesses running smoothly even while a sale is underway.
Team transition support
Acquisitions can shake up even the strongest teams. What is Keith’s approach? Prepare well before selling.
He made the transition to Discovery Education smoother by building a leadership team capable of operating independently. Many employees found new opportunities there.
Bottom line: Take care of your people. A smooth handover builds goodwill and your reputation carries over to your next venture.
life after sale
Life after leaving the country was not smooth. IP restrictions prevented Keith from using the Mystery Science brand or content in future products. The new consumer venture he started eventually closed after three years.
“I think you can build the next thing faster, but sometimes you have to start from scratch,” he said.
Bottom line: Pay close attention to brand and IP rights when negotiating a sale. If you can’t keep up, be prepared for a complete reboot.
Luck, Timing, Passion
Keith is the first to admit that luck played a role. The pandemic boom in digital education has helped, but so has years of enthusiasm for teaching science creatively.
“You can’t control the timing,” he said. “But you can control whether you’re doing something that interests you enough to stick with it until the timing is right.”
Bottom line: Passion breeds perseverance, and perseverance meets luck.
Lessons for Small Business Owners
- Observe the market. Sell when conditions are good, not when you are tired.
• Keep what matters: Structure deals that preserve future opportunities.
• Build Virality: A great product coupled with word of mouth can beat any sales team.
• Prepare diligently. Being prepared and giving good advice can save you a headache later.
• Support your team: Your team will remember how you handled the transition.
• Plan your next steps: Be realistic about what you can and cannot use after the sale.
• Stay humble. Entrepreneurship is equal to skill, timing and luck.
final thoughts
Keith Schacht’s story is more than a case study. This reminds us that selling a company is not the end of the story. It’s just a new chapter.
For entrepreneurs, his journey provides a roadmap. That means be curious, act before you’re forced, and never forget why you started in the first place.
After all, as Keith said, entrepreneurship is a number lock, so you just keep turning the tumbler until it clicks.
