Startup Acquisition Stories w/ Jaisal Rathee (JR)

Learn more about JR –

Transcription –

Andrew Gazdecki:
All right. I’m here with JR who has, I think have entered the Acquire legendary club. He has sold, or he has micro Acquired five different startups or have had five different startups micro Acquired.

Jaisal Rathee (JR):
Mm-hmm (affirmative).

Andrew Gazdecki:
That’s incredible, man. So thanks for so much for joining the podcast.

Jaisal Rathee (JR):
It’s great to be here. Yep.

Andrew Gazdecki:
So for those listening, do you want to just give everyone just a quick background on yourself and maybe we can dive into some of the acquisitions in a second?

Jaisal Rathee (JR):
Yep. So, I mean, I’ve been working with startups for a while now. I started my first project, I’m going to call it a project now, when I was 16 and I’m 28 now. So that’s about 12 years ago. I was still in high school when I started that and kind of been in and out of the startup world, I’ve had a few jobs in between. The first site that I actually got micro Acquired was a productized service. I started in 2020. Yeah. So I was working a job. I was head of customer success for a company and it was a really shit job. So yeah. Started working in this productized service, which is funny because we launched on product, I remember you specifically, you were one of the first comment, you congratulated in launch.

Andrew Gazdecki:
Oh, nice.

Jaisal Rathee (JR):
So it’s funny that the six months after launching that service, we ended up getting micro Acquired. Yeah. That was really cool.

Andrew Gazdecki:
Oh, well, yeah. I always get like shout-outs when I can that’s man. Well, congrats on yeah, making the leap into entrepreneurship and then acquisitions too. So tell me about, so you got five acquisitions on your belt under Acquire. I think that might be the record. Tell me about your favorite one. What’s been maybe the most meaningful in terms of size or just, however you define meaningful?

Jaisal Rathee (JR):
I think the most meaningful would be my most recent one. It’s called Insanely Useful Websites. So it’s a newsletter and yeah, I wasn’t really planning on selling this one to be very honest. I started this about eight months ago, so December 2021, I started this and it’s been growing really well. It’s been doing really well. We had just under 5,000 subscribers. I had absolutely no inclination selling it to about a few days ago. And I said, you know what? Let’s just see what’s out there. I’d heard of a few newsletters being sold. I said, OK, let’s list on Acquire. Let’s list on a few websites. See what kind of interest we get. And then we can make a decision.

Jaisal Rathee (JR):
24 hours later, 24 hours after listing on Acquire, not only did I have a few people who were interested in buying, but I actually had my first real offer within 24 hours, which was absolutely insane. It was just shy of the asking price. And the asking price was a really decent multiple. So it was something that I was very happy to sell at. So that was within 24 hours and it went super quickly. So when everything fell into place, I had a chat with the buyer and he seemed like the right person to take over. So I said, excellent. It feels right now. So within 24 hours, it went from something I wasn’t really looking to sell to it being the right fit.

Andrew Gazdecki:
That is crazy 24 hours in terms of an acquisition that may also be the fastest acquisition I have heard of.

Jaisal Rathee (JR):
It did take a week to close, to be honest, we signed contracts within 24 hours, but with payments and everything, it took a bit longer.

Andrew Gazdecki:
Nice. What would you say your second favorite acquisition in Acquire has been?

Jaisal Rathee (JR):
Second favorite would be, yeah, that would be my first one simply because it was my first exit on Acquire. It was also within six months. So it is funny. I mean, you might be listening to me saying I’m selling a website within six months. So I built this one and sold it after eight months, but the reasoning behind that is very much that I’m trying to build a micro startup studio almost. So it’s more like a build to sell model and using kind of sites like Acquire to achieve that or at least that’s where I see this going.

Andrew Gazdecki:
Yeah. Nice. So tell me about how many buyers reached out to you in that 24 hour period.

Jaisal Rathee (JR):
In those 24 hours? Not a lot, but that was because I didn’t give it enough time. Once you mark, once you receive an LOI and then it kind of pauses any interest of it. But within those 24 hours I received about, I think, eight requests or nine requests.

Andrew Gazdecki:
Nice. Yeah. You didn’t give us enough time to put you on the newsletter, the social media posts, you might have had probably more than you might-

Jaisal Rathee (JR):
I’ve had, for previous ones, I’ve had loads. I’ve had 30, 40, and I mean I’ve had loads of requests. So I completely agree with that. I didn’t give you enough time.

Andrew Gazdecki:
Have you gotten my request yet?

Jaisal Rathee (JR):
I haven’t received it. I filled out that form a while ago. I thought you don’t ship to the UK. I just assumed you didn’t ship.

Andrew Gazdecki:
No. I will make sure we get a huge swag box out to you because that’s incredible. And I’m super happy for you.

Jaisal Rathee (JR):
It better have some sort of title for the two records you said.

Andrew Gazdecki:
We’ll maybe we’ll send you some title belts or something like that. But if it’s on Beatsy you got to send them back to me so I can give to the next person.

Jaisal Rathee (JR):
Excellent.

Andrew Gazdecki:
But tell me about, when you list on Acquire, what are some tips you’d maybe give other people looking to sell their startup?

Jaisal Rathee (JR):
I think a few things I’d say is definitely have your numbers ready. In my case, I’ve never really been a big numbers guy and I always try to keep things as simple as possible. And it’s more like a cowboy tactic almost. I try to not create PNL and all of that jazz, but having those things handy really helps, especially when you start receiving offers, when you start receiving LOIs. So have your numbers ready, know your numbers, know how much money you’ve made, also don’t forge numbers. I think any serious buyer can really easily find that out, especially in due diligence. So if you’ve lied about your profits or if you’ve lied about the amount of money you’re spending, for example, on actually hosting a website, et cetera, it really does, it can affect acquisition.

Jaisal Rathee (JR):
I’ve heard of many stories or acquisitions haven’t happened because either the seller tried lying about something or they didn’t have the numbers ready. So yeah. Yeah. Have your numbers ready and don’t lie. Just keep it straightforward. Keep it truthful. Also let’s say don’t try asking for… You see a lot of sellers trying to, they’re asking for valuations, which really don’t make sense. They ask for multiples that way above what something would be worth. So it makes sense to keep things achievable. It makes sense to keep things realistic as well, and look at your profit multiples and then see if listing it makes sense.

Andrew Gazdecki:
Yeah. I couldn’t agree more on both points. There is a saying, there’s been more lies told in Excel than Word. So definitely. And then also a good quote to go along with that is from Warren Buffett, you can’t do a good deal with a bad person.

Jaisal Rathee (JR):
Yeah, exactly.

Andrew Gazdecki:
And yes, it will easily be caught in due diligence. So I highly do not recommend that. And then in terms of valuations, we see that a lot. And so what I always recommend founders is we have a multiples report out, which is real data from real acquisitions done on Acquire. And if you follow that guide, your chances of being Acquired are a hundred times higher, but there is kind of like it’s hard when you see large companies being valued in the venture world at this and stuff like that. It’s the hardest part of the job. And as a founder, I’ve done this myself where you think, well, they sold for 20 X revenue. Why can’t I? But it doesn’t really work like that. Your business is your business. Is it at scale? There’s so many different factors that go into valuing your business and I even recommend sometimes to price lower than you might expect because then you’ll draw on more buyers.

Andrew Gazdecki:
There’s another saying, if you have one buyer, you have no buyers. And so if you can get a bidding war going with a timeline saying, “Hey, I’m looking to sell this asset or this startup by this certain date,” you can get multiple LOIs and it gives you a lot of leverage to raise the price. And you’re kind of letting the market tell you what the business is worth

Jaisal Rathee (JR):
A hundred percent. Yeah, I think it’s perfect to let the market do that. But yes, as for individual sellers, I think it’s very easy to be greedy, as you said, especially if you see your neighbor for example getting Acquired for 20 X, but it’s really important to keep things in perspective and see, do you have the business that gets that valuation or do you need something that inclusive, but I’ve seen you have a ton of resources and that’s actually really helpful considering that a lot of people selling are first time selling.

Andrew Gazdecki:
Nice. And then in terms of when you’re speaking with buyers, what advice would you give buyers? Because I know a lot of buyers, I’ve seen buyers reach out, send LOIs too soon, short messages and all that really turns off a founder and it would turn off me because it’s just weird if they just are, Hey, give me all this information without actually showing that they’re interested. What advice would you give to buyers to really peak your interests and help them stand out?

Jaisal Rathee (JR):
Well, I’ll come to that in a second, but speaking of buyers, there’s some real tire kickers out there, I have to say. So one of the tricks and this is the sellers and I just wanted to mention this. One of the tricks I realized early on, I think it was after the first sale was always ask for the buyer to jump on the call if they’re interested, because anyone who’s kicking the tire, anyone who’s not interested is not going to forward. Because there’s a ton of people who might be reach out but at the end of the day, they’re not really interested. So if you’re a seller listen to this and you have a buyer who reaches out and kind of on the fence about whether they’re interested, before you send them any information, just send them the basics and see if they want to jump on a call. That potentially helps. And there’s also always that one buyer who tries to low ball you.

Jaisal Rathee (JR):
Every time I’ve list [inaudible 00:10:33] without there’s always that one person who low balls you with a 1.5 X, multiple, or two X, multiple, it says your startup isn’t worth what you’re asking for, I’ll pay you this much. Yeah. So don’t fall for them even if they come in early, even if they come in a few days of you listing, don’t fall for those. If you think a startup’s worth something, stick it out and wait.

Jaisal Rathee (JR):
One of my websites did three months to sell, but it was worth it. So it can take time. It can happen in 24 hours. It can happen in few weeks or few months, but don’t let low offers demotivate you or trick you into selling for less than it like, but going back to your question about the buyers, I think buyers need to peak my interest really. All buyers need to do or say, “Look, I’m interested in buying.” That’s enough to peak my interest. But yeah, I think the previous point, low ball offers, that’s almost a big turn off. If you’re serious about buying my business, don’t insult me by offering something that I’m not going to take the conversation forward.

Andrew Gazdecki:
Yeah. I would agree with that as well. One trick that I recommend as well, if… I love getting to know the buyer too, because you’re going to be working with this person post transaction, transferring assets, that sort of stuff. So again, going back to Warren Buffet’s quote, you want to do a good deal with a good person in my opinion. And one thing-

Jaisal Rathee (JR):
That’s a really good quote.

Andrew Gazdecki:
Well it’s Warren Buffet.

Andrew Gazdecki:
Some other tips we recommend is if a seller reaches out, make them kind of perform. And what I mean by that is they reach out with, Hey, my name is JR. I have experience in marketing. I love your newsletter. Your next question should be that’s awesome. What specifically would you like to know about the startup or if we do get to finish line, how are you going to fund this acquisition? Okay, great. Are you comfortable signing an NDA? And what you’re doing is you’re making the buyer perform in terms of, okay, you have experience, okay, this is how we’re going to fund it. Okay. You’re comfortable signing an NDA and all you’re doing is just keeping a quick conversation going with the buyer to gauge your interest level. And a lot will drop off if they’re not interested and that allows you to just focus on the ones that are interested. So that’s another tip that I’ve-

Jaisal Rathee (JR):
It’s just getting the small commitments as well, isn’t it? It kind of plays into the art of persuasion, just getting the small commitments and-

Andrew Gazdecki:
Exactly.

Jaisal Rathee (JR):
…keeping the conversation going.

Andrew Gazdecki:
Yeah. All you’re doing is saying, are you serious about this opportunity? Are you serious about this opportunity? Are you serious about it?

Jaisal Rathee (JR):
Yeah.

Andrew Gazdecki:
And then they say yes, yes, yes. And then you also kind of get to know information that you probably want to know. How you going to finance this?

Jaisal Rathee (JR):
Yeah.

Andrew Gazdecki:
So I’ll have fun stuff. So you are probably the definition of a serial entrepreneur, building and selling.

Jaisal Rathee (JR):
I’m not sure if that’s a good thing or a bad thing.

Andrew Gazdecki:
I think it’s a great thing. We’ve seen that quite a bit on Acquire where people are building projects and then selling them and building is one of the funest parts about a startup in my opinion, the initial phase.

Jaisal Rathee (JR):
I love the first six months.

Andrew Gazdecki:
It can be a date thing. So I’d love to know what are you working on now?

Jaisal Rathee (JR):
So a couple of things really, I have a couple of productized services, but as I mentioned before, I’m trying to pivot my work into building almost like a micro startup studio, which focuses on projects that are built to sell. It’s a purpose build to sell within a year or two years, which is, I mean, it kind of came to me last year. If you’re familiar with the build to sell in 30 days kind of thing. So I did build to sell in 30 way before build to sell in 30 was a thing. So last year in July, I built a start up and sold it on Acquire within 30 days.

Andrew Gazdecki:
Well done.

Jaisal Rathee (JR):
And that kind of gave me… Thank you. I hope that’s another title coming my way. That kind of gave me an idea. I said, this is really interesting because what a lot of people are searching for is proof of concept, validation from customers and an MVP built out and kind of get that early job done. So launching a few places and getting those customers and getting the product to a place where now someone can come in, take the processes, take over the processes and what you’ve built and then scale it. So that kind of gave me an idea to start building a micro startup studio.

Jaisal Rathee (JR):
So what I’m trying to do now is building micro products for the purpose of selling them within the next year or two years. And by products, it’s a general term. What I mean is it could be productized services. So I run two productized services, ones in the cold email space ones like the web development space that around info products, content businesses, and another newsletter. So similar to the one that I just sold and it’s all leading to that point. But yeah, it’s very easy to overstretch yourself, which I think I’ve done a few times.

Andrew Gazdecki:
I think every entrepreneur has, but this is awesome. It’s almost like I can see a future where people are able to build products specifically to sell them to someone else. And then you get to go back to doing what you love, which is building more products.

Jaisal Rathee (JR):
Exactly. It’s all about playing to your strengths. I’m not the person to take the business from a 100,000 to 10 million, but I might be the person to take it from zero to 100,000 and then someone else can come in and do what they do best, which is scale it further. And I’ve seen lots of people. People struggle with starting. Starting sometimes for many people’s the hardest bit. And if you can take that away, if you can take that initial… It’s getting that inertia, it’s the hardest to get the ball, get the car moving and once you get it started and then someone else can come in

Andrew Gazdecki:
Nice. I like that a lot. So I guess final questions I would have for you is how did you learn all this stuff? Are there any books you’d recommend or podcast that you listen to?

Jaisal Rathee (JR):
YouTube? Yeah. YouTube is my favorite resource. And everything’s on there. I do listen to a few podcasts. They’re great for listening to not necessarily learning, but My First Million, that’s one of them, I really do like that podcast. And YouTube has so many people who are just freely sharing all their knowledge and kind what they’re learning. In fact, I started my new journey, looking at YouTube tutorials based on people, how they were building on Webflow and all these different apps to YouTube. I mean, all you need really don’t need anything else.

Andrew Gazdecki:
That’s incredible today. Because 10 years ago we did not have that. Building a startup 10 years ago, everyone was just trying to figure it out. We had some idea, I built a startup and launched it in 2010 and there was not a lot of content on sales marketing. Everyone was just kind of, maybe this will work.

Jaisal Rathee (JR):
And it was at that time, it was the same old books being recommended. It’s like, oh yeah, I don’t know if I should name names, but I’ll name them anyway. You can edit them out. There were, I think Steve Blank had a book. What was it called?

Andrew Gazdecki:
I remember that.

Jaisal Rathee (JR):
And then there was something about the peaks and the-

Andrew Gazdecki:
Crossing.

Jaisal Rathee (JR):
I have all these books.

Andrew Gazdecki:
Crossing the [inaudible 00:18:14]

Jaisal Rathee (JR):
Yeah. That’s the one.

Andrew Gazdecki:
And Steve Blank’s book is The Path to Epiphany I think.

Jaisal Rathee (JR):
Yeah. That’s the one. That’s the one. Yeah. So there were all these books.

Andrew Gazdecki:
I read those in college.

Jaisal Rathee (JR):
Every one at that stage I think was reading those books hoping that there is an epiphany at the end, but-

Andrew Gazdecki:
I will say at the time those were great books. But then as what’s been, I think really amazing to see and I think this is what I love most about startups personally is just how much other entrepreneurs share like yourself. Yeah. You’re giving fantastic, even though you just said YouTube, that is a great tip. Yeah. Just go on YouTube.

Jaisal Rathee (JR):
Just go on YouTube.

Andrew Gazdecki:
Sometimes-

Andrew Gazdecki:
Or Google. Sometimes I’ll post something on say Twitter and someone will have a very basic question. I’ll just say type it into Google. And if you literally copy and paste the question in Google, you’ll get tons of content you can do on YouTube.

Jaisal Rathee (JR):
Which is funny. More, people need to oversimplify stuff because I think at this point, most people tend to over complicate stuff. It just doesn’t need to be that complicated.

Andrew Gazdecki:
Yeah. I think, yeah. There’s always beauty and simplicity.

Jaisal Rathee (JR):
A hundred percent.

Andrew Gazdecki:
I think that was Steve Jobs motto in terms of what could he remove from products rather than add to product. And I think-

Jaisal Rathee (JR):
I think I’m going to give you that quote. I think beauty and simplicity by [inaudible 00:19:44]

Andrew Gazdecki:
Yeah. I think it’s like a famous art. It’s a quote from someone.

Jaisal Rathee (JR):
That’s going on my coffee,

Andrew Gazdecki:
The Acquire coffee mug. We get it out too.

Jaisal Rathee (JR):
Excellent.

Andrew Gazdecki:
All right, JR. Well, it’s been a pleasure chatting with you, dude. I’m just so thrilled at all your success and I’m rooting for you. If people want to learn more about your journey or learn about more about your new projects, where can they go?

Jaisal Rathee (JR):
I think Twitter would be best. I’m definitely trying to be a bit more active there. Yeah. Just follow me on Twitter. I think you can leave a link in the description. That should be the easiest.

Andrew Gazdecki:
I’ll Look up a YouTube tutorial on how to leave a link on a YouTube video.

Jaisal Rathee (JR):
Just Google it. Just Google it.

Andrew Gazdecki:
All right. Back at me. All right JR. Well, it’s been a pleasure chatting with you. I’ll put all of the links in the show notes, but man, congrats again. And we’ll definitely be getting, I think we owe you like four swag boxes. So you might be getting-

Jaisal Rathee (JR):
The thing is, yes. It’s recorded now. So once it’s up on YouTube, you can’t go back.

Andrew Gazdecki:
I’m a man of my word.

Jaisal Rathee (JR):
Excellent. Yeah, it’s been a pleasure speaking to you, Andrew. Have a nice one.

Andrew Gazdecki:
You too. All right. Cheers JR.

Jaisal Rathee (JR):
Cheers. Bye.