Go to Conferences ... I only reached a critical mass of serious acquisition offers after attending my first Micro-Conf in Las Vegas.
Just curious, what types of activities did you do at MicroConf? Did you speak/present? Did you attend sessions (which ones)? Did you just talk to people and network? How did you plan to approach people at the conf? What worked, what didn't?
I once paid to attend an industry conference for a product I was working on, it was a complete waste of time because I basically did nothing, could not get out of my shell, and didn't know what to do. So any guidance you have here would be very valuable!
Didn't speak. Just walked and talked. I spent a lot of time at conferences in a previous job and no longer get massive anxiety from it. Two things that make going to conference better: 1) Build a reputation online before (blog, tweet, be transparent) (2) get a speaking slot if at all possible b/c then people come speak to you.
Would this work for a business that requires domain expertise?
I run an online lsat prep business. I sell video courses. Not a monthly SASS, but everything runs automatically. Students arrive at predictable times of the year and buy in predictable quantities.
But, to expand on it, you would need domain knowledge. That can be hired; I have an assistant who’s an lsat tutor who handles a lot of support.
There aren’t really any buyers within my niche. Existing lsat prep companies already have a course.
There’s also the issue that my personality is in the business. The videos feature me, and the informational materials are written in my own style, using the word “I”, etc.
So far I’ve been operating on the assumption that I can’t sell it at a reasonable value. But maybe that’s mistaken. Do you think non-lsat experts might want to buy a business like this?
There’s definitely some cost savings potential. “Programmer” is one of my larger expenses. A developer could optimize it with their own labour instead.
Do you think non-lsat experts might want to buy a business like this?
Most business owners are business owners because they enjoy the returns of the asset, not because they are themselves experts at every facet of maximizing those returns. Expertise can be bought; that is a major part of their responsibility. (When I expressed surprise at the existence of non-technical SaaS buyers someone reminded me that there are people who could not cook a burger who nonetheless buy McDonalds franchises.)
There’s also the issue that my personality is in the business. The videos feature me, and the informational materials are written in my own style, using the word “I”, etc.
This isn't ideal but isn't insurmountable. Is your personality in the business or is it the business? People have sold very personal brands before, but it's tricky to arrange at the lower end of the scale. To the extent that you appear in a video, well, someone has to appear in the video, and "founder" remains true regarding you even if it is an entirely emeritus position. Informational materials being written in your style is not a problem; style is one of the things they're buying, and they can either continue consciously adopting it or adjust to the styles of the people doing writing when you aren't, at their option.
For a more detailed opinion, chat up a broker; they'll be happy to tell you their opinion of whether going through the process is worth your time.
Can you give an idea of the multiples of X (i.e. revenue, Ebitda, etc) that you did consider? You mentioned 6x(monthly-revenue) was bad. But can you discuss the spectrum of what looked good/interesting?
(not asking $$$ .. just multiples that were presented)
Can't talk about my deal (see below). At the time I started discussions (early 2017) I had SaaS brokers tell me the "market rate" for SaaS was about 3-3.5x annual SDE (see post for discussion of what SDE is).
Always wondered what happened to you. Followed your story a few years ago when you participated in Baremetrics/Open. Glad that you held on for a good sum and exit!
Sorry I can't, per the terms of the deal. The buyer actually made a very good argument for why. Essentially there is so little data out there that if I posted some rough deal terms it would dominate all future discussions they had "but you paid X for Storemapper and we're at least as Y" but they still wouldn't have the full context of the transaction. So that single data point would be both misleading and unhelpful for future acquisition discussions, which I think is pretty reasonable.
