Hey there, Andrew here! Was awesome to see some of you at the webinar on Wednesday, and if you missed it, no worries – watch it again above or read the recap below. First, though, why did we run this webinar? How does it help you?
You might have wondered how we help startups of scale sell. We dropped the micro, but what does that mean if you’re selling a seven or eight-figure business? I wanted to answer that with real-life case studies from life-changing exits on Acquire.com, and crucially, give you the playbook to replicate their success.
What is that playbook? Watch for yourself and find out! Leave comments on the video and we’ll answer them as best we can. Or if you’re pushed for time, or just want a refresher, skip the video and read the recap and Q&A below.
How to Get Acquire’d: The Playbook
- Webinar slides – you’ll see the key ones below in the recap, but feel free to download these separately and annotate them with your own thoughts.
- How to Sell in 90 Days (ebook) – This free ebook covers everything from crafting the perfect listing to closing safely with escrow, with a ton of case studies not covered below.
Recap and Learnings
Acquire.com Is Built for Big Exits
You might think selling a business worth tens of millions of dollars isn’t possible on an online marketplace. The reality is that seven and eight-figure acquisitions are common on Acquire.com. Just ask the founders and CEOs of companies like Kissmetrics, MyWorks, Flockler, GrowthBar, and Konch who closed truly life-changing deals.
Since I started the business in 2019, we’ve seen a rapid rise in big businesses asking for our help to get them Acquire’d. In response, I built a team of expert advisors to develop an in-house program supporting the needs of multimillion-dollar founders.
Covering everything from coaching to marketing, this professional service prepares you to sell and helps maximize your exit in the shortest possible time.
Last year we helped over 1,000 deals close, totalling over half a billion dollars in closed acquisition volume. Many of these acquisitions were for seven to eight figures, the truly life-changing exits, and you’ll see first-hand how we helped them close today.
Setting You Up for Success
We help you get Acquire’d in three ways:
- Perfect your listing. Using our knowledge of past acquisitions, we optimize your listing to draw in buyers to create leverage and maximize your exit.
- Prepare you for exit. You’ll learn what to expect, how to speak to buyers, and much more. You’re never alone with help from expert in-house advisors.
- Market your startup. We present your listing to a vast buyer network, qualified and committed to closing deals. Much faster than traditional channels.
Scoring Your Listing
Your listing is the first thing buyers see. It must grab their attention. When selling a larger startup, you might need to share nuanced details or additional context to convince buyers to pursue a deal. If you don’t share this info upfront, because you don’t know what to share or how, you risk never attracting the right attention.
To help, we grade your listing using the listing scorecard on criteria like business health, financials, metrics, profile, and your preparedness (see the slide below). Then we’ll help you understand what big-ticket buyers want to see. We’ll position and optimize your listing to attract the most attention from buyers committed to closing on larger acquisitions.
Your Valuation Dictates Buyer Interest
The 10x exits you read about in the press are the outliers. The handful of startups with exceptional qualities you rarely find. You might not want to hear that, but you need to hear it. Set a realistic asking price with our help. We’ll give you a range that we know will appeal to buyers and achieve your aims.
Overvaluation is the number one reason startups don’t sell on Acquire.com. If you price at fair market value (FMV) following our multiples reports, around 60 percent of interested buyers will pursue a deal.
But if you price at 10 percent under, a whopping 92 percent will show serious interest. At 10 percent over FMV, interest falls to 2 percent.
What else matters to you beyond price? Buyer fit? Speed? Terms? Pricing at or below FMV often gives you additional leverage on other terms. Maybe you want an all-cash exit as soon as possible – how much interest will you need to achieve those goals?
Generating Buyer Interest
Listing your business is just the start. With over 2,000 vetted startups competing with you for buyers, you need to market your listing – hard.
We’ll do the heavy lifting for you, starting with a feature in our general newsletter to over 200,000 qualified buyers. Then a targeted email – one startup, once per weekday – to a select group of buyers we know would be interested in your business.
With email features and social advertising, you’ll create a ton of FOMO around your business. We expect you to get 30-50 NDAs in the first two weeks. Then 5-10 serious buyer meetings, and then two or three LOIs, one of which will (hopefully) close.
Stage Gating for Momentum
You have the ideal listing. Your business is live. We’ve emailed buyers about your business and advertised it on social media. What’s next? How do you keep that momentum going? The answer is with a deal schedule or stage gating.
A deal schedule sets deadlines for important milestones in your acquisition. For example, you might set deadlines for registering interest, indicative offers, initial offers, final offers, and more. The goal? To keep momentum moving and retain leverage.
If you wait for LOIs to trickle in, you risk never selling. As someone famous once said, if you have one buyer, you have no buyers. The deal schedule keeps FOMO high, and we’ll coach you on how to set dates and keep buyers accountable. The ultimate goal is to get enough LOIs so you can negotiate the points that are important to you and ensure you attract buyers committed to and capable of closing.
What Your Selling Experience Involves
- The ideal listing. Your value props are clearly defined. Your metrics, P&L, and other details are clarified and articulated with help from our customer success team.
- Empowerment. You’ve prepped a living Q&A that saves time. You know what to expect from due diligence. Your deal schedule and transition plan are set.
- Marketing. You’re featured in the general and targeted newsletter. The social posts are scheduled. We’re searching for buyers that align with your goals.
They Got Acquire’d: Founders Who Used the Playbook
The CEO of Kissmetrics, Jenn Steele, not only turned the business around, but managed to close an acquisition in seven figures in just 30 days. Incredibly fast. Jenn received 45 NDAs and eventually sold in an all-cash deal at 2x revenue.
Cofounders Mark Spera and Hailey Friedman sold their business in two months. They got Acquire’d in an all-cash deal by a PE firm after 45 NDAs. Impressively, they sold at 3.6x revenue – proving what’s possible when you do your homework.
Founder Peter Leonard decided to sell MyWorks to spend more time with his family. After receiving 44 NDAs, he sold to SaaS Group, a PE firm, for 2.5x revenue. The deal combined cash, seller financing, and an earnout (yes, we do complex deal structures!).
Cofounders Sean Shadmand and Anders Hasselstrøm got their startup, Konch, acquired for 2x revenue by an individual buyer. Their acquisition took a little longer at three months, but with over 100 NDAs, they had a lot of interest to sift through!
Founder and CEO Toni Hopponen got acquired at 3x revenue by Relay Commerce, a PE firm specializing in ecommerce. After evaluating 37 buyers, negotiations settled with Relay Commerce at a majority of cash at closing, with a short holdback period.
These case studies are just a fraction of the multimillion-dollar businesses we’re helping achieve life-changing exits. In July alone, 92 acquisitions closed with over $35 million in acquisition volume. Another 201 deals are currently under offer. Join them!
Get Your Free Listing Scorecard Now
The first step to getting acquired is getting listed. Sign up, enter a few basic details about the business you’re selling, and our team will contact you for a free evaluation.
You’re under no obligation to sell, but if you sell with us, you unlock decades of acquisition knowledge from our handpicked team of M&A experts. Combined, they’ve helped 1,000s of acquisitions close, on and off-platform. We know the red flags, the pitfalls to avoid, and we know what buyers want. We can help maximize your exit.
Sign up now and see for yourself.
Do you charge extra for acquisition support?
No. Everything we do to help you get Acquire’d is covered by the 4 percent closing fee you pay if you sell (you pay nothing if you don’t).
How important is the P&L?
Very. We’ll review the P&L with you and even recast it for you. The first thing buyers will ask for is a 36-month P&L, so please upload one when submitting your listing.
Can I list at prices outside Acquire.com’s recommended range?
No, because we have so much data that says you won’t get acquired if you do. Press reports of 10x exits don’t reflect the market. We want you to have the best experience, which includes closing an acquisition. If you price so high we think you won’t sell, we won’t be able to list your business.
Can you score my business without me creating a listing?
No. You need to create a basic listing for us to review and score it.
Do you help all business types?
We help all online businesses sell. Profitable SaaS with at least $100,000 in revenue is our sweet spot. We also list eCommerce, Shopify apps, marketplaces, agencies, and so on. The best listings are profitable businesses. If you’re losing money, you’re a liability to an acquirer – they have to fix what’s wrong and account for that cost. It’s much better to do that hard work yourself, so when it’s time to sell, you command a better price and terms.
If I’m working with an M&A advisor, can you still help me?
Yes, of course. Just reach out to us and we’ll figure out what’s missing and help you achieve your acquisition goals.
Is it important for a SaaS company to be US-registered? Is an offshore company or parent okay? If yes, what jurisdictions do you suggest?
You can register a SaaS anywhere you want. If you want to tap the US market, however, it might make sense to register in the US. Having a presence in the US would probably afford you some benefits, such as being able to apply for financing and other incentives. Our partner, Doola, makes it incredibly easy to set up a US company – read how one of our Acquire buyers brought his foreign company home to the US.
How do you baseline “fair market value”?
Fair market value, to us, is an average of past acquisition data. Every six months, we release multiples reports detailing the multiples at which startups got acquired. We’ve released three reports so far, but our acquisition data actually goes all the way back to 2019 when I started Acquire.com. That baseline helps us give you realistic valuation ranges that ensure you generate enough buyer interest.
What sort of multiples are you seeing for different types of businesses?
Check out the multiples reports for a detailed breakdown by business type. The headline numbers are: ● SaaS: 2-3x revenue or 5x profit ● Ecommerce: 1-2x revenue or 3x profit ● Marketplace: 1-3x revenue ● Agency :1x revenue or 1-3x profit Our next multiples report is due soon. Subscribe to our newsletter and get it delivered to your inbox when it's live.
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Any deal structures that you have seen that are becoming more common? Earnouts, seller financing, and so on?
Deal structures vary from deal to deal, but I’d say that buyers are a little more risk-cautious and might expect an earnout, holdback, or seller financing to close the gap on the purchase price. Many sellers are happy to accept a mix of cash and other conditions to close the deal now rather than risk an uncertain future waiting on that all-cash deal. If you can close at the price you want, it’s usually worth pursuing.
Can you get acquired even if you don’t have MRR?
It happens but rarely. Buyers on Acquire.com love profitable, revenue-making startups and will pull out all the stops to acquire them. Pre-revenue businesses are a much harder sell. We usually recommend waiting until you’ve made some money before listing, or if we do list your business, it has to meet strict criteria and be priced accordingly. You might get lucky if someone wants to buy your IP, for example, but those examples are rare. Buyers want to acquire profitable businesses. Build one before listing.
Can I choose when my startup goes live?
Yes, if you reach out to our team after submitting your listing, we can hold off adding your startup to the marketplace until you’re ready. But the sooner you list, the sooner you attract interest. Waiting to go live only delays your acquisition and could put your asking price at risk if something unfortunate were to happen in the meantime like a drop in revenue or a competitor entering the market.
How does Acquire.com help a buyer post-acquisition?
Once you’ve acquired a startup, we provide you with a library of resources for growing the business you’ve acquired. For example, the acquisition playbook, plus other support for making post-closing conditional payments through Escrow.com, and lots more. Our latest investment is a full online course on acquiring an online business end-to-end, including post-acquisition tips (get access to it here). Our team is always on hand to answer questions. Just because you acquire a business, it doesn’t mean we part ways – we want to help you succeed and will help you in any way we can.
Are crypto startups getting killed on valuation?
Crypto startups are alive and well on Acquire.com. Our team only lists startups we believe will sell. That means ensuring they’re valued and positioned correctly to buyers. If you price a crypto startup too high, or haven’t quite hit upon the unique value props that attract buyers, our team of in-house advisors will step in to make your listing pop and help you set a realistic asking price.
What is the fee Acquire takes from the deal? And does it come from the seller?
We charge a 4 percent closing fee to sellers. They pay the fee automatically when closing with Escrow.com (deducted from the closing payment). If you don’t close with our escrow partner, our collections team will be in touch to arrange payment.
What’s your fee structure?
Sellers pay a 4 percent closing fee when and if they close. If you don’t close your acquisition, you don’t pay a cent, and everything up to closing – marketing, resources, coaching – is included as standard.
What is the startups’ breakdown in terms of SaaS, Marketplaces, eCommerce, other?
Here’s a breakdown of what startup types are on Acquire.com:
Are online courses sellable?
It’ll be a tough sell if you only offer the course itself. But if your business is making online courses that you sell through a website, that could be sellable under our content sites category. You would need to demonstrate it was a legitimate business with customers and revenue and not simply a library of training material.
Is it possible to sell a science-based business while pre-revenue based on IP alone?
It’s possible but unlikely. Acquire.com is primarily a marketplace of proven and profitable businesses. The exception might be where a buyer acquires IP rather than building it themselves to cut their time to market. These examples are rare, however.
Do you have any experience with pre-profit SaaS with a big debt from previous investment?
As long as you’re clear and upfront about the debt and your business is making revenue and growing, you stand a good chance of getting acquired. Buyers know many SaaS companies sacrifice profit in the early days to achieve scale, and I can think of several acquisitions where buyers bought pre-profit companies on Acquire.com.
Is it possible to pursue a strategic acquisition only?
Yes! However you’d still need to generate revenue, serve paying customers, and hopefully make some profit too. Strategic buyers might be less concerned with financial performance, but it can help to demonstrate the strategic value of your offering. If you’re selling IP, for example, paying customers can demonstrate its efficacy and performance.
Can a newly-developed app get acquired? Say an app with 5-10 users and launched less than 1 month ago?
Yes, it’s possible, though unlikely. We’d recommend waiting a little longer to acquire more customers and revenue and then listing. You want buyers to see your app has product-market fit, which is only possible with paying customers.
Is a lot of deferred revenue, five-year contracts, for example, a positive or a negative in terms of buyer interest?
I’d say any revenue is a step in the right direction. Deferred revenue is still money in the bank. However, you won’t know how consistent that revenue will be (will the customer churn?) or the final cost to deliver the product or service over time. You might find a buyer wants a quality of earnings (QoE) report to assess the value of those deferred contracts so they can value your business more accurately.
What’s the “sweet spot” for deal value? Is $10M USD in the wheelhouse?
There are a lot of dependent variables to determine if a business has a $10M valuation. Luckily, if you happen to fall into this bucket, the Acquire.com team is primed to help. We regularly see businesses this size or larger come to the platform, and it’s the catalyst for why we built this playbook shared in the webinar. Reach out to us at email@example.com if you believe you fall into this range. We’d be more than happy to give you an initial evaluation and ensure you know your options.
Could you please tell us some example amounts people have sold for?
Unfortunately, exact numbers are locked behind NDAs. But I can tell you that we’ve helped close many seven and eight-figure acquisitions, including those case studies described in the webinar.
Are the LOIs standardized through the platform or does each potential buyer send their own LOI?
When building an LOI on our platform, we give buyers a standard wording that they then customize with optional terms and conditions. Buyers can also draft their own LOI off-platform and upload it to the builder.
What if a startup is US-patented with broad cutting-edge technology that’s ahead of the market but doesn’t have any or just a small amount of revenue? How does that kind of valuation process work (eg. AI technology, AR/XR similar)?
Unproven technology is extremely hard to value and therefore sell on Acquire.com. We set asking price caps on ALL pre-revenue businesses, regardless of their capabilities. That said, if you can confidently prove a market for the IP and justify the valuation, our curation team might reconsider whether to list your startup at a higher price. These examples are extremely rare, and we’d recommend finding some customers first.
Are all these companies that you are showcasing profitable?
Yes, all case studies are profitable businesses.
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