AGENCY GROWTH CLUB
The Truth on Selling an SEO Agency to Private Equity
Guest: Jason Hennessey
Guest: Jason Hennessey
Josh Peacock, CEO of Search For Hire, sits down with Jason Hennessy, CEO of Hennessy Digital, to break down how they prepared, scaled, and executed an agency sale to private equity. They cover pivoting away from a lifestyle business, surviving intense financial due diligence, and optimizing for the future of search through Generative Engine Optimization (GEO). Key takeaway: To retain your maximum valuation and leverage during an exit, you must build clean books and run a deliberate 2-to-3-year runway strictly focused on EBITDA rather than raw top-line growth.
Listen if: you’re an agency founder trying to step out of your own way but are terrified that senior leadership hires will crash your profit margins.
Best moment: Jason explains why standard agency “growth mode” tax-dodging tactics completely destroy your leverage the second you enter an exit negotiation.
Guest: Jason Hennessy, internationally recognized SEO expert, author, and CEO of Hennessy Digital.
AI & GEO (Generative Engine Optimization): The future of search isn’t the death of SEO. Traditional SEO forms 70% of the foundation for LLMs (like ChatGPT and Perplexity), while the remaining 30% requires adapting to new algorithmic patterns.
Transitioning from Lifestyle to Scalable Business: Jason Hennessy pivoted Hennessy Digital at $3.5 million in revenue by bringing in a highly competent COO, CFO, and CTO.
The 3-Box Decision Rule for M&A: Any acquisition or partnership deal had to strictly benefit the team first, the customers second, and the founder third.
Shifting from Growth to Profitability: Preparing for an exit requires a 2-to-3-year runway shifting focus from top-line revenue to maximizing EBITDA (from 7% margins up to $4.7M+ EBITDA).
Jason Hennessey (Founder of Hennessey Digital) returns to the Agency Growth Club for his second episode, this time on the other side of an exit.
Since his first appearance, he’s sold Hennessy Digital to Herringbone Digital, the private equity platform backed by Trinity Hunt, where he was acquisition number two. He’s still CEO, still on the board, and pushed a significant portion of his proceeds back into the platform. As he puts it: “I didn’t sell out, I sold in.”
Key takeaway: Selling an agency is a two-to-three-year journey, not a decision. Founders who sell under pressure lose all their leverage, the ones who keep it are the ones who prepare before a buyer ever calls.
Hennessey made the pivot at $3.5M in topline revenue. His view is blunt: entrepreneurs aren’t groomed to scale, and past a certain point they become a danger to their own business. His answer was expensive hires — a COO, then a CFO and CTO, plus layered management, systems, and accountability. The agency went from $3.5M to $8M in a single year and landed at #290 on the Inc. 500.
Growth wasn’t smooth. At $10–12M topline, margins dipped to 7% and Hennessey was preparing to move personal money to cover a third pay period. The bets on senior leadership eventually paid off — but he’s clear you can grow yourself out of business if you’re not careful.
When the decision to sell was made, 2024 became the profitability year. New hires required a business case. Sponsorship spend was cut. Hennessey stopped flying first class. EBITDA hit $4.7M, rare territory, he notes, now that he sits on the buy side.
The original plan was to exit at $10M EBITDA by the end of 2027. Trinity Hunt arrived eight months in. Hennessey initially said no, then they structured an earnout that paid him for the growth he knew was coming. Every decision had to clear three tests, in order: good for the team, good for the clients, good for him.
The results since: Herringbone’s first-year goal was to acquire $10M in EBITDA. They acquired $25M. The platform now sits at roughly $110M topline with $30M EBITDA across four verticals — legal, home services, elective medicine, and dental, with six agencies acquired since Hennessy Digital, including Blue Shark Digital and CJ Advertising.
Two lessons stand out. First, diligence is where deals die: overstated numbers, personal expenses running through the P&L, and client concentration surfacing after the LOI is signed. Hennessey’s financials were clean, salary and monthly distribution, nothing on a whim, and it removed the friction entirely.
Second, do the homework on your buyer. Hennessey called six YPO peers who’d sold to private equity and asked each one the same question: “How did you get screwed over?” He took notes, then spent more time negotiating his LOI than most founders spend on the purchase agreement. When a $150K working capital clause was interpreted two different ways post-close, his PE group split the difference rather than standing on the letter of the contract.
Hennessey argues his personal brand, the books, the speaking, the industry standing, earned him a higher multiple rather than creating key-man risk, because Trinity Hunt’s thesis was built around founders who stay. It’s now leveraged on the buy side too: M&A emails that go unanswered get replies within five minutes when they come from him.
The episode closes on the state of the industry, why Hennessey is more excited about SEO now than he’s been in years, the 70/30 split between foundational SEO and the new AI search layer, and clients signing their biggest cases from ChatGPT referrals.
View our recent placement with Hennessey Digital: Headhunting Senior Talent for a 6 x Inc. 5000 Legal SEO Agency.
Hennessy Digital is a highly sophisticated digital marketing agency that specializes primarily in the high-end legal sector (Law Firm SEO). Through its private equity expansion platform, Herring Bone Digital, it has also scaled its proprietary systems into home services, elective medicine, and dental verticals.
Jason Hennessy spent a deliberate period shifting the agency from a lifestyle business focused on top-line revenue to an asset focused purely on profitability. By forcing business cases for new hires and streamlining operational costs, they scaled Hennessy Digital’s EBITDA to over $4.7 million before successfully partnering with private equity firm Trinity Hunt.
[00:00] Josh: Welcome back to the podcast. Anyone in the SEO and search space knows Jason Hennessy. Since last February, Hennessy Digital has sold to Herring Bone Digital under a private equity platform. Jason, you are still on the board, correct?
[01:27] Jason Hennessy: Yes, I am still the CEO of Hennessy Digital. I like to say I didn’t “sell out,” I “sold in.” A private equity group approached us not to retire me, but to accelerate what was already working.
The private equity group is Trinity Hunt, and the platform is Herring Bone Digital; we were acquisition number two. I took chips off the table but pushed a lot back in because I believed in the thesis. We focus on four major verticals: legal, home services, elective medicine, and dental.
[03:56] Josh: When was the actual moment you decided that this wasn’t just a lifestyle business anymore, and that the ultimate plan was to exit?
[04:12] Jason Hennessy: That determination was made early, around $3.5 million in topline revenue. Entrepreneurs are great for a quick start, but we aren’t naturally groomed to scale; we can become a danger to ourselves if we don’t get out of our own way.
I brought in a very competent COO, who helped recruit a CFO and a CTO. We added layered management, systems, processes, and accountability. That was the year we jumped from $3.5 million to $8 million in revenue, landing at number 290 on the Inc. 500 list.
[06:12] Jason Hennessy: Scaling can get uncomfortable. At $10M to $12M in revenue, our margins dropped to 7% because we were investing heavily in senior leadership. There were times cash flow was so tight I feared moving personal money to cover a third pay period. But those expensive bets on competent people eventually paid off.
[07:04] Josh: What actually changes inside a business when you pivot from building it day-to-day to intentionally preparing it to sell?
[07:18] Jason Hennessy: It’s a completely different strategy. In growth mode, you don’t care about profitability or EBITDA; you reinvest everything to pay the least amount of taxes. When you decide to sell, it is a two-to-three-year journey. If you sell out of pressure or declining metrics, you lose all your leverage.
To prepare for our exit, we heavily focused on profitability. We forced business cases for every new hire, did more with less, cut foolish sponsorships, and I stopped flying first class. We successfully built our EBITDA up to $4.7 million, which is incredibly rare for agencies. Our original goal was an exit by 2027 at $10 million EBITDA, but we were approached early, eight months into our thesis.
[11:21] Jason Hennessy: We took meetings to build relationships. Any deal had to check three boxes in exact order:
Trinity Hunt structured the deal to include our projected earnouts, so it made absolute sense to pull the trigger early. In our first year on the platform, we acquired $25 million in EBITDA. We are now at roughly $110 million top-line with $30 million EBITDA.
[13:40] Josh: You met with private equity partners who dug into the numbers. What took you by surprise during that due diligence process?
[14:00] Jason Hennessy: Everyone warns you to be careful with private equity because they show up with smiles but hold sledgehammers in the background. I am part of YPO (Young Presidents’ Organization), so I called six friends who previously sold to private equity and asked them exactly how they got screwed over. I used those notes to arm myself when negotiating our Letter of Intent (LOI).
[16:03] Josh: How dependent was the business on you personally, and how clean were your financials?
[16:10] Jason Hennessy: Most deals die in the financials because numbers are overstated or entrepreneurs are running their personal lives through the agency’s spreadsheet. We had the cleanest books ever. I took a standard salary and monthly distribution; I never took money out on a whim.
If a private equity firm digs in and finds out $3 million of a $10 million agency comes from a single client, you lose trust, leverage goes sideways, and the deal falls apart. Having an incredible CFO and COO handling diligence requests kept us on track.
[18:17] Josh: How important was your personal brand, books, and industry visibility to the actual sale?
[18:35] Jason Hennessy: A strong personal brand can actually be a disadvantage if a buyer wants to replace the founder with a cheaper or corporate CEO, because if the founder leaves, the agency client base might collapse.
However, this private equity thesis specifically sought founders who wanted to stay on and leverage their infrastructure. We now use my brand for recruiting elite talent and facilitating further M&A. When our corporate M&A team cold-emails an agency we want to buy, they get ignored. When I send the email, we get a response in five minutes. It ultimately secured us a higher multiple.
[21:05] Josh: How did you break the news of the acquisition to your team and your clients without causing panic?
[21:22] Jason Hennessy: We kept the negotiations strictly within the C-suite (myself, CFO, COO, and later the CTO) because there is a high likelihood that deals fall through, and I didn’t want to cause unnecessary worry.
Once closed, some agencies choose never to tell their staff or clients. We chose the opposite playbook: to be loud and control the narrative. We held a full team call to explain why we did the deal and assure them no one was being cut. Then, I personally did 15-minute one-on-one calls with nearly all of our clients, followed by a detailed video announcement. It was incredibly well-received because of that transparency.
[32:48] Josh: The search industry is changing fast with AI. What are your thoughts on where SEO is heading right now?
[33:09] Jason Hennessy: I haven’t been this excited about the industry in years. For a long time, everyone followed the exact same playbook for Google. When ChatGPT, Perplexity, Claude, Gemini, and Google AI Overviews emerged, people asked: “Is SEO dead?”
As we reverse-engineered how these LLMs work, it became apparent that traditional SEO serves as the actual foundation for AI answers. I look at it as a 70/30 split: 70% is foundational SEO (high-quality content, authority, citations, technical site infrastructure), and the other 30% is the new algorithmic frontier we have to figure out. We are shifting our focus heavily toward GEO (Generative Engine Optimization) and AI optimization. Clients are already calling us saying they landed massive cases because users discovered them directly through ChatGPT.
[37:11] Josh: You mentioned transitioning from an SEO specialist to a CEO. How beneficial were mastermind groups like YPO and business coaches along that path?
[37:26] Jason Hennessy: Instrumental. When you are the CEO, everyone reports to you, meaning every idea you have is treated as a good idea. You need someone who can tell you “no,” or at least “not right now.” YPO is a confidential space where you can be completely raw and vulnerable about massive business and life problems with peers who have actually lived through it.
[40:40] Jason Hennessy: My business coach, Cameron Herold, profoundly impacted my trajectory. I originally discovered his TED talk 17 years ago about raising kids to be entrepreneurs. Years later, when Hennessy Digital hit $5 million top-line, I took action and cold-emailed him. He replied in 12 minutes. Taking action changes your future. Under his coaching, I hired an executive assistant, wrote my books, and joined YPO.
[44:10] Josh: Did an 18-year-old Jason Hennessy ever think you would achieve this level of success?
[44:16] Jason Hennessy: I always had an intense drive for financial success because I came from absolutely nothing. My mom had me when she was 17 and cleaned houses to get by. I remember sitting on the couches of those massive, fancy homes watching her scrub toilets for a $60 cash envelope. I told her back then that one day I would live in a neighborhood just like that. I was explicitly money-motivated early on to change our reality.
[46:16] Josh: What is next for you now that those financial milestones are checked?
[46:24] Jason Hennessy: The M&A side completely excites me now. Integrating acquired agencies like Blue Shark Digital and CJ Advertising into our portfolio, developing proprietary tools, and building the undisputed gold standard for legal marketing. It’s no longer about the money; it’s about creating the definitive benchmark for the industry.
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