These brothers turned down a $20 million offer for their campus safety app — then sold for twice as much

As a student at Queen’s University in Ontario in 2011, David Sinkinson was part of a campus safety group that audited the emergency blue light boxes on campus.

If a student needed help, they could press the button on these light poles to alert the campus police. Think of it like a panic button.

The audit revealed 30% of the boxes were broken. Plus, they weren’t effective if the person who pressed the button had to keep moving, because the police wouldn’t know their location.

David pitched to his school that, instead of expensive, stationary boxes on light poles, what if there was a mobile campus safety app students could download to their phones? It would be much easier and more effective. The app would also send users’ real-time locations to campus police.

“I’m pretty sure I said, ‘There’s an app for that,’ as part of my pitch,” David recalled on the Practical Founders podcast. “You have to remember this was back in 2011. The App Store was new… I actually had a BlackBerry.”

Over the next decade, David brought on more customers for the app, working alongside his brother, Chris Sinkinson. By 2020, AppArmor was named one of the fastest growing companies in Canada.

Interested buyers began reaching out, but the co-founders didn’t entertain offers seriously until Rave Mobile Safety approached at the end of 2021.

For these bootstrapped brothers, consistency was key

David, the sales and marketing guy, and Chris, the software developer, worked on AppArmor as a side project in 2011. In 2012, they officially launched the app, then they went full time in 2014.

To differentiate AppArmor, the brothers constantly innovated, adding new products and features. For example, they implemented a mass SMS (otherwise known as text messaging) notification system that issued campus-wide emergency alerts. Other features included tip reporting and offline emergency plans.

“Our product was very difficult for other companies to replicate, but we had looked at some of these other things that the clients were buying,” Chris shared on the One by One Million Blog. “We thought, we can build better versions, so we proliferated our products. We added more products to our product line to try and increase the size of the basket of goods that our customers were buying on a monthly basis.”

Schools could also make the app their own with custom branding. At New York University, for example, the app is called “Safe NYU.” University of Florida students download “GatorSafe.”

The brothers initially charged a one-time upfront fee in addition to recurring monthly fees, but they found clients were hesitant to commit due to budgeting constraints. Instead, they decided to only charge recurring fees, which varied based on the size of the client. They also had add-on features and tools clients could opt into for additional fees.

Clients spent around $15,000 Canadian per year for just the safety app, Chris told One by One Million blog. With added features, clients paid closer to $45,000 to $50,000 a year, he estimated.

To reach new clients, the brothers learned they had to meet their customers where they were. They were excited to write blog posts and use social media to promote AppArmor, “but we were selling to emergency managers who weren’t in that demographic,” Chris said. Instead, they sent snail mail, attended trade shows and responded to requests for proposals (RFPs).

“That’s when the real sales explosion sort of happened,” Chris said, noting AppArmor achieved $1 million Canadian in ARR (annual recurring revenue) around late 2015. “We started doubling our revenue almost every year.”

Their big break came when they responded to an RFP for the Colorado Community College System in January 2019. Winning that deal in the U.S. and implementing AppArmor across 13 schools added fuel to the fire, Chris said. They grew their team, and more opportunities cropped up with this U.S. client now in their portfolio.

“Sticking with it was tough at times, especially getting our first U.S. customer, but consistency paid off,” David told us.

As AppArmor grew, the co-founder brothers ignored the “startup hype.” “We had lots of people who I loosely refer to as haters throughout our experience — people who said everything from ‘we’re a lifestyle business’ to ‘this idea is never going to work,’” he said on the Practical Founders podcast. “Ignore those people. Don’t pursue validation in your peers. Pursue validation in the market instead.”

By 2022, AppArmor had around 350 to 400 customers with millions of users, according to David. The team had grown to 20 employees, and annual revenue neared $5.6 million ($7 million Canadian). Their profit margin was 60%.

Why they turned down a $20 million Canadian offer — and what happened next

As AppArmor grew, the co-founders entertained a few conversations with competitors who were interested in acquiring AppArmor. But they weren’t serious about selling until they met with Boston-based Rave Mobile Safety, backed by growth equity firm TCV, in the fall of 2021. At that point, they were “completely exhausted,” Chris said.

Rave Mobile Safety was a major competitor, and they had noticed AppArmor was winning contracts they’d pursued, Chis shared.

The company made an offer of $20 million Canadian in 2021. But David and Chris turned it down. The earn-out, which required hitting certain sales targets, just wasn’t worth it, they shared. It had “a lot of strings attached that we just weren’t comfortable with,” David said.

In the year that followed, they continued to grow AppArmor and added a new vaccine verification feature as students returned to school after COVID shutdowns.

“Chris correctly anticipated where the market was going,” David told They Got Acquired. “We had the best quarter in our history at around $1.5 million Canadian in added recurring revenue.”

A year later, Rave Mobile Safety returned with a counteroffer: $40 million Canadian — all cash and without the complicated terms. It was a sale multiple of nearly 6x revenue.

“In entrepreneurship, you don’t always get an opportunity to ‘lock in’ a win,” David said. “This seemed like a great opportunity to do just that.”

The offer came in on Nov. 18, 2021. Two months later, on Jan. 18, 2022, the co-founders signed on the dotted line, and money hit their accounts on Feb. 1. Although the deal was straightforward and tied up relatively quickly, the process still proved challenging.

“I trusted the acquirer, but it’s very complicated to execute,” David said. “Oh, and due diligence sucks.” Due diligence, he said, was the most difficult part of the whole process.

“I thought you just bought a business like you bought a car,” he said. “They come on the lot, they kick the tires, they make engine noises in the driver’s seat, and then they take it off the lot. Instead, it’s like the FBI searching your house. They’re just ripping everything out.”

Another challenge? They’d signed an NDA, so they couldn’t share any information with their team before the sale closed. Whenever someone asked what he was working on or why he needed a certain document, Chris would just say the company was being audited.

The day they shared the news with the team, the team was shocked. About an hour after the announcement, the AppArmor team was introduced to the Rave Mobile Safety CEO — then they joined an all-staff meeting.

“The next day, we had a couple of staff come to us and go, ‘Was that a dream? Did that actually happen?’” David said. “It was pretty wild.”

After selling, they committed to staying on at least three months to help with the transition, Chris shared. After those three months, Rave Mobile Safety asked them to stay on longer because they were hoping to sell the company within the next year.

David and Chris had been aware of those plans before they sold, and Rave Mobile Safety offered them a small amount of phantom equity to go along with the plan.

Sure enough, in December 2022, Motorola Solutions purchased Rave Mobile Safety for $560 million, effectively giving the brothers another payout. The brothers helped with the transition for about another four months before stepping away.

“We had a good team that had learned so much; it was just time for us to get out of the way and let them kind of have their moment,” Chris said.

David and Chris have since started a podcast, Startup Different. They also wrote a book by the same name. In it, they have a whole chapter devoted to their experience selling AppArmor.

Through the ups and downs of growing and selling a company, David’s biggest piece of advice for founders is simple: “Don’t forget to enjoy the journey.”