Like any diligent founder, Denis Leonov did his homework to prepare Clipboard History Pro for acquisition. But even the most prepared founders can fail when the unexpected occurs.
For Dennis, the unexpected was an accounting error threatening to kill his deal during due diligence. As a solopreneur, he’d kept his own books for years. He thought it’d be simple to build a P&L statement and send financial reports to the buyer without help. But that mistake cost him precious time and resources right before closing.
Luckily, Denis’s transparency with the buyer and quick problem-solving helped him rescue a six-figure exit. But how much time and effort could he have saved if he’d sought help earlier?
Self-sufficient founders like Denis don’t always realize how much smoother acquisitions can run when you ask for assistance. Here’s how Denis learned that lesson first-hand.
When You Don’t Realize Your Side Project Blew Up
Most college graduates enter the workforce after earning a master’s in mechanical engineering. Denis pivoted careers and taught himself software engineering and web design instead.
He honed his skills through freelance work on top of the new job. For most of these side gigs, Denis built and modified websites, moving around tons of website copy. But every time he had to copy and paste a huge swath of text, Denis relied on an external clipboard system to manage it. How much simpler would it be to copy and paste within the browser?
This question spurred Denis into building the answer – Clipboard History Pro. He’d experimented with pet projects before, but this was the first product he’d use regularly at work.
Building Clipboard History Pro as a browser extension helped Denis manage the code in one place without repeatedly opening and closing the browser. His solution proved useful for his freelance work, his nine-to-five job, and to help him score a better position as an engineer at another company. But Denis never imagined creating his own business out of a side project.
“I didn’t invent anything new. Let’s just say I repackaged the existing idea,” Denis says. “The niche was already there for software engineers. I just made some adjustments and released it as a clipboard manager browser extension. Turns out, I was the first one on that path. That’s why, after some time, the product became popular. The rest is history.”
Denis released Clipboard History Pro for free online. He didn’t advertise it or add any paid features. Ultimately, Denis cared about execution above all else. His main focus after designing, iterating, and releasing the product was using it for his own job.
“I just released it and hoped someone would save time using my product. I forgot about it for a couple of years, using it myself but not checking any metrics like user numbers,” Denis says. “After two or three years, I realized I had 15,000 users weekly. I thought, ‘Wow, where did these people come from? What else do they use my extension for besides regular clipboard management?’ It was a huge surprise for me.”
Turning a Pet Project Into Profit
In 2018, after Denis discovered Clipboard History Pro’s massive popularity, he invested more time in improving and monetizing it. Several other personal projects had failed, but here was an opportunity to turn one of his products into a full-fledged business.
“It took me seven months to build paid features and the subscription mechanisms. I added cloud storage, powerful keyboard shortcuts for quick pasting, floating mode to make it look like a desktop app, etcetera,” Denis says. “I started to act like an entrepreneur, a skill I had to learn.”
Denis had no problem fixing bugs and overcoming technical challenges. But product management and sales? A totally different story. For the first time, Denis had to consider how to price new features, design and market these upgrades to customers, and more.
“Many big companies have engineers and product managers, right? I had to wear every hat, learning on the fly how to think about products, market them, model a single entity, build the user flow inside the product, and onboard customers,” Denis says. “Things like that were hard for me to learn.”
As Denis’s skills as a solopreneur grew, so did his customer base. By the time he was ready to sell in early 2023, Clipboard History Pro boasted 130,000 customers. Nearly all the growth was organic, with word of mouth, blog reviews, and Google searches helping customers find Denis easily.
None of his mistakes had been disastrous, but they’d taught him a lot about turning a product into a business. Soon, Denis was ready to apply his newfound knowledge to a fresh venture, so he started prepping Clipboard History Pro for exit.
Honest Communication Saves Deals
Denis was no stranger to acquisitions. He’d used other platforms to sell small pre-revenue projects before. But he admitted those sites felt more like they were hustling him, not helping him close the best deal.
After discovering Acquire.com through Indiehackers, Denis wasted no time in listing Clipboard History Pro. Buyer access requests poured in less than 12 hours later.
During this first spike of buyers, Denis quickly sussed out who was asking about the product for their own purposes and who was serious about buying. None of these early offers appealed to him, so he kept evaluating potential buyers.
The second spike occurred after Clipboard History Pro appeared in Acquire.com’s newsletter. Denis seriously considered several offers from this second round of buyers, but too many of them brushed off questions about their plans for the product.
Denis could’ve closed quickly for a large sum. But he wanted someone to take care of the startup and continue helping his customers.
“These buyers didn’t have strong plans to develop the project. They just wanted to keep it in maintenance mode,” Denis says. “Aligning with the buyer was important to me because I value our users and the fact that people use this tool daily. I didn’t want to leave them with someone who wasn’t ready to invest their time into the project or who wanted to pivot it significantly.”
Finally, Denis connected with Third South Capital, a team of investors who assured the founder they would grow Clipboard History Pro into an even better product. After signing an LOI, Denis began sharing documents and allowing Third South Capital access to his startup for due diligence.
Denis had read Acquire.com’s blogs for info on what to expect during due diligence. Instead of scrambling to pull together a data room or compile user-based research at the last minute, Denis had all his ducks in a row. Or so he thought.
“I tried to do the P&L and financial reports myself, but I made some accounting mistakes,” Denis says. “I’d advise other founders to hire someone who actually knows how to do that. While I consider myself a good engineer, I’m really bad with numbers.”
It took a few extra weeks for Third South Capital and Denis’s contracted accountant to validate the financials. Instead of panicking over the mistake, Denis kept calm and openly admitted to the error.
“Once I realized there was a mistake, I was fully open about it. I said, ‘Oh my God, you’re right. I have to recalculate that,’” Denis says. “So I hired a contractor, and they helped me with the numbers. It wasn’t a dramatic problem, but I wanted to ensure everything was correct.
“That’s what I told myself before listing the project. I have to be transparent about everything. Otherwise, I didn’t believe the deal would work.”
Denis and Third South Capital closed with no other issues a few weeks later. Though Denis walked away with six figures, he couldn’t help thinking about that one little snag in due diligence. If the problem had been a bit bigger, a more complicated fix, would he still have closed the deal?
Accept a Helping Hand
For a decade, Denis built and launched his products independently. He didn’t need assistance iterating new versions or building a massive customer base. Before, he’d sold other side projects without a fuss. But those early acquisitions required almost no due diligence.
If Denis wants to grow and build another serious business in the future, he knows it wouldn’t hurt to involve others, like Acquire.com’s customer success team. Even asking someone to teach him the new skills he needs would be major progress.
“This time, I don’t think I’ll be lucky enough to get thousands of users without marketing. So, I probably have to learn how to promote and market stuff better than before,” Denis says. “My goal is to repeat the same cycle, from idea to implementation to monetization to happy users.”
Denis plans to build a tool that analyzes remote workers’ productivity throughout the day. He’s got the MVP ready and is hard at work building a marketing and pricing plan. But if he were to scale and sell this business, Denis knows he’d take more care to avoid simple mistakes that could kill his deal.
“Imagine you’re buying a business. You ask yourself, ‘What is the condition? What is the state of the project that I want to buy?’ You probably want it to be in good technical shape and want the numbers to be clear. No issues whatsoever. So, ensure the same for your product before you sell it,” Denis says.
Preparing for due diligence doesn’t have to be a stressful experience. With our help, you can close a quality deal in no time. Denis learned he should hire an accountant from now on – but if you’re unsure how to sell quickly on Acquire.com, our customer success team is only a call or email away.