Table of Contents
Chris and David Sinkinson built and sold AppArmor for $40 million, proving that the best co-founder might be sitting at your family dinner table—if you can handle mixing business with brotherhood.
The 10-year age gap didn't stop these Canadian brothers from creating a perfect partnership: Chris brought technical expertise, David handled sales and marketing, and together they navigated everything from bootstrapping to a life-changing exit.
Key Takeaways
- Brothers sold AppArmor for $40 million CAD after building it to $7 million ARR with 60% profit margins through bootstrapping and side hustles
- 50-50 split ownership structure remained unchanged throughout the entire business lifecycle, demonstrating complete trust and alignment
- Strategic dividend payments during growth years provided early wealth building: $45k car purchase evolved into $900k annual dividends by exit
- Post-exit portfolio allocation: 50% conservative bank stocks for dividend income, 20% S&P 500, 30% aggressive NASDAQ tech investments
- Current net worth: David ~$24 million, Chris ~$25 million, managed through self-directed investment strategies rather than wealth managers
- Brotherhood provided built-in accountability system preventing typical post-exit pitfalls like rash spending or premature new ventures
- Business relationship enhanced rather than strained family bonds through clear communication and shared values
- Identity crisis post-exit required intentional decompression period before considering new ventures, with family now taking priority over work
Timeline Overview
- 01:38–08:15 — The Big Exit: Details and Figures: $40 million CAD acquisition by Motorola Solutions, phantom equity structure, and immediate practical challenges like transferring $20 million between bank accounts
- 08:15–14:05 — Managing Wealth and Life Changes: Conservative spending approach with mortgage payoffs, six-week European vacation, efoil purchases, and strategic real estate investments rather than lifestyle inflation
- 14:05–17:39 — Post-Exit Identity and Future Plans: Processing the emotional aftermath, identity crisis in Istanbul, decompression needs, and gradual return to entrepreneurial thinking with new AI RFP tool
- 17:39–22:27 — Early Partnership Origins: Chris's decade-long solo struggle with document management software, David's political science background and campus newspaper turnaround, MBA experiences and skill complementarity discovery
- 22:27–28:42 — Bootstrapping and Financial Strategy: Multiple side hustles funding AppArmor development, $120k annual salaries maximizing retirement contributions, strategic dividend decisions starting with $45k car purchase
- 28:42–32:16 — Business-Family Balance: Managing professional disagreements without damaging personal relationships, leveraging sibling trust for business resilience, maintaining separate spheres for holidays and family time
- 32:16–38:07 — Future Plans and Reflections: Package deal mentality for future ventures, prioritizing family time and health over pure business growth, achieving "f-you money" level of freedom for decision-making
The Perfect Partnership: When Skills Complement and Trust Runs Deep
The Sinkinson brothers' success story began with a fundamental truth: they possessed perfectly complementary skills. Chris, the technical founder, had spent a decade building document management software as a solo entrepreneur, reaching $400k in revenue but hitting a scaling ceiling. David, ten years younger with a political science background, brought natural sales and marketing abilities honed through turning around a struggling campus newspaper from a $60k deficit to $100k profit.
Their partnership timing proved ideal—Chris needed business development expertise while David sought entrepreneurial direction after facing limited career prospects with his liberal arts degree. The 50-50 ownership split established from day one never changed throughout the business lifecycle, demonstrating complete trust and alignment that would prove crucial during challenging periods and ultimate exit negotiations.
The age gap, rather than creating friction, provided natural mentorship dynamics. David looked up to Chris's technical achievements and business experience, while Chris valued David's fresh perspective and energy. This mutual respect created a foundation for honest feedback and collaborative decision-making without ego conflicts typical in co-founder relationships.
Their father's photocopier business provided an unexpected testing ground for their partnership. Chris's document management software already integrated with photocopier equipment, while David's business development skills helped expand beyond the family company. This early validation proved their combined capabilities could create value in established markets with technical solutions.
Bootstrapping Mastery: Multiple Revenue Streams Funding Growth
AppArmor's development strategy demonstrated sophisticated bootstrapping through diversified revenue streams. Rather than seeking external funding, the brothers leveraged multiple side businesses: Chris's legacy document management product, an ebook platform generating $100-150k annually, and smaller ventures contributing $20-30k each. This portfolio approach provided stable cash flow for reinvestment while maintaining complete ownership control.
The financial discipline extended to personal compensation. They structured salaries at $120k annually—the maximum amount allowing full retirement savings plan contributions—rather than taking excessive founder compensation. This approach balanced personal financial security with business growth funding while optimizing tax efficiency through retirement account maximization.
Strategic dividend decisions marked crucial psychological shifts in their wealth-building approach. The first major distribution of $45k allowed David to purchase a white Nissan Rogue with cash, creating an emotional connection to business success beyond abstract financial metrics. This "Cargate" moment transformed their perspective from pure reinvestment to balanced wealth extraction and business growth.
Subsequent dividend increases reflected business maturation and profit optimization. Annual distributions grew from initial car-purchase levels to $200k each, then $400k each, ultimately reaching $900k each by the final year before acquisition. This progression demonstrated sustainable profit generation while providing substantial personal wealth accumulation independent of eventual exit value.
The $40 Million Exit: Timing, Negotiation, and Emotional Impact
The acquisition journey illustrated both market timing and negotiation leverage. Motorola Solutions' initial $20 million offer in 2020 was rejected as undervaluing AppArmor's software multiples. The pandemic pivot that strengthened their business position enabled return negotiations from a position of strength, resulting in the doubled $40 million final offer with reduced earnout periods and improved terms.
The phantom equity structure addressed cross-border ownership complexities for Canadian citizens holding American company equity. Rather than traditional rollover equity, they received promissory notes worth approximately $400k each if the acquiring company achieved subsequent sale—though Canadian tax treatment as earned income reduced net proceeds to $200k each after 50% marginal rates.
The actual money transfer created surreal practical challenges that highlighted their new financial reality. Chris's inability to transfer $20 million between accounts within the same bank required branch escalation and private banking department intervention—a first indication of their transformed financial status and access to previously unknown banking services.
Emotional processing varied between the brothers. David experienced the transfer notification during his daughter's pediatrician appointment, creating a memorable juxtaposition between routine parenting and life-changing financial events. Chris focused immediately on practical investment decisions, demonstrating their different approaches to processing major transitions while maintaining shared priorities.
Post-Exit Investment Philosophy: Conservative Growth with Tactical Aggression
Their investment approach reflects lessons learned from wealth management industry skepticism and desire for direct control. Chris completed Canadian Securities course materials to understand investment principles without delegating all decisions to financial advisors. This self-education enabled informed decision-making while maintaining flexibility for tactical adjustments without external approval requirements.
Portfolio allocation balances security with growth opportunity: 50% in conservative bank stocks providing dividend income for living expenses and business ventures, 20% in S&P 500 index investments, and 30% in aggressive NASDAQ technology companies. This structure provides stable income streams while capturing upside potential from growth investments.
The dividend-focused strategy serves dual purposes: funding current lifestyle expenses and supporting new business development without touching principal. Bank stock dividends finance podcast production, book development, and general family expenses while preserving capital for larger investment opportunities or business funding needs.
Individual stock selections demonstrate conviction-based investing rather than pure diversification. David's 130% gain on Shopify resulted from substantial position sizing based on business understanding and growth thesis. This approach contrasts with traditional wealth management advice but reflects their comfort with concentrated positions in familiar sectors.
Managing Wealth Psychology: Staying Grounded Through Family Bonds
Post-exit spending patterns revealed intentional restraint and value-based decision making. Major purchases included mortgage payoffs, modest car upgrades, and experience-focused spending like David's six-week European family vacation. The absence of typical nouveau riche purchases—private jets, luxury cars, multiple homes—demonstrated grounded perspectives maintained through family relationships.
Chris's efoil purchase and lawyer gift illustrated thoughtful spending on passion areas while sharing experiences with important relationships. The cottage-based decompression period provided necessary emotional processing time without expensive distractions or lifestyle inflation pressure. This approach enabled authentic reflection on identity and purpose changes.
The brothers' continued geographic proximity and regular family interaction provided accountability for financial decisions and lifestyle choices. Unlike isolated founders who might make dramatic changes, their embedded family relationships offered perspective and gentle pressure toward reasonable behavior during the adjustment period.
Their shared experience processing the exit prevented individual spiraling into typical post-acquisition challenges. When David sent Chris a business plan PowerPoint hours after their last day, Chris's immediate response to "lie down on the couch or go in the lake" demonstrated healthy intervention that external advisors might not provide.
Identity Crisis and Recovery: Processing Success Without Losing Purpose
The post-exit identity crisis struck both brothers differently but equally powerfully. David's breakdown in Istanbul during the European vacation revealed the depth of purpose displacement when removing entrepreneurial identity. Years of defining themselves through business building created vacuum requiring intentional filling with new activities and relationships.
Chris's immediate urge to start new ventures demonstrated different coping mechanisms for the same underlying issue. His cottage-based decompression through windsurfing and "silly activities" provided necessary space for processing without immediately jumping into replacement activities. The writing process for their book served therapeutic purposes while creating productive output.
The identity recovery process involved accepting new life phases with different priorities. David's commitment to daily school pickup and dropout routines represents fundamental priority shifts from business-first to family-first decision making. This transition required conscious choice rather than automatic assumption that business success should continue driving life structure.
Chris's focus on health and social life rebuilding after admitting to not dating for a decade illustrates the personal costs of entrepreneurial focus. The financial freedom enabled addressing these neglected areas without career pressure or income anxiety affecting decisions about time allocation and energy investment.
Family Business Dynamics: Maintaining Relationships Through Professional Stress
Working with family required conscious management of boundary between business and personal relationships. Holiday gatherings and family dinners needed intentional business topic limitation to preserve normal sibling interactions. This discipline prevented business stress from contaminating family events and maintained relationship quality independent of professional success.
Conflict resolution benefited from long-term relationship perspective and innate trust levels. Disagreements about business decisions never carried personal betrayal concerns because family loyalty provided fundamental security. This foundation enabled honest feedback and difficult conversations without relationship-ending risks typical in business partnerships.
The brothers' complementary personalities—Chris's detail orientation versus David's temperature-lowering humor—created natural balance during stressful periods. David's occasional pranks and lighter approach prevented excessive business intensity while Chris's process focus ensured operational excellence. These differences enhanced rather than hindered their collaboration.
Staff members eventually understood and appreciated the sibling dynamic, recognizing when serious business focus was needed versus when casual family banter was occurring. This transparency created workplace culture accepting both professional excellence and human relationship dynamics without confusion about authority or decision-making processes.
Future Partnership Planning: Package Deal Mentality with New Priorities
Their commitment to future ventures as a "package deal" reflects lessons learned about their complementary strengths and effective collaboration. Multiple entrepreneurial inquiries directed at Chris individually are declined with referrals to David, demonstrating their integrated approach to business opportunities and recognition that individual success was less likely than partnership success.
However, new ventures will operate under different constraints reflecting changed life priorities. David's non-negotiable commitment to daily child pickup and school involvement represents fundamental shift from business-first to family-first decision making. Any future business must accommodate these family obligations rather than compete with them.
Chris's health and social life focus creates similar constraints around work intensity and time commitment. The realization that they achieved "f-you money" levels of freedom means they can decline opportunities that don't align with personal values or lifestyle goals. This selectivity enables higher quality decision making about which projects deserve their attention.
The AI RFP automation tool they're developing demonstrates their continued entrepreneurial interest while maintaining reasonable scope and timeline expectations. Rather than pursuing maximum growth or venture capital funding, they're building at comfortable pace with self-funding and family-compatible time investment levels.
Conclusion
The Sinkinson brothers' journey from bootstrapped startup to $40 million exit demonstrates the power of complementary skills, unwavering trust, and family bonds in business success. Their story challenges the myth that co-founder relationships inevitably end in conflict while showing how family relationships can enhance rather than complicate business partnerships.
Their post-exit approach to wealth management, spending discipline, and life priority rebalancing offers valuable lessons for any entrepreneur navigating sudden financial success. By maintaining close family relationships and processing the transition together, they avoided many common pitfalls that isolate successful founders from meaningful connections.
Most importantly, their experience proves that sustainable success involves more than financial achievement. The preservation and strengthening of family relationships throughout business building and exit processes created foundation for long-term happiness that money alone could not provide.
Practical Implications
- Co-founder Selection: Consider family members or close friends with complementary skills rather than defaulting to professional network connections when trust and communication are essential
- Ownership Structure: Establish clear, equitable ownership splits early and maintain them throughout business lifecycle to prevent future conflicts during growth and exit phases
- Financial Discipline: Balance reinvestment with strategic personal wealth building through dividend distributions to avoid sudden wealth syndrome during exit
- Post-exit Planning: Prepare for identity crisis and emotional adjustment period following business sale by maintaining support relationships and avoiding immediate major decisions
- Investment Strategy: Consider self-directed investment management for better control and understanding rather than delegating all decisions to wealth management professionals
- Family-Business Balance: Establish clear boundaries between business and personal relationships to preserve long-term family bonds regardless of business outcomes
- Exit Negotiations: Leverage strong business performance and market timing to improve acquisition terms rather than accepting first offers during seller's market conditions
