https://www.listennotes.com/e/d82f06e43da44dccbdcd984e5d5cac89

We cannot kind of like dream up a more perfect alignment in terms of values, philosophy, how we treat customers, how we treat employees.

Three things. Don't use a banker, hammer out the main points between the two founders. And if you can operate from a position of trust, you minimize your legal bills and you can get a deal done.

We were finding that these repeatable processes are not easily managed with any single tool out there. So we decided this is a problem space that we can expand with BoonRamp.

Today, We are going to address one of the most painful things that has ever happened to me as a person, as an entrepreneur. I sold my first startup, Roebli, for $10 million, and I paid a banker $1 million because I just signed a contract and I didn't know any better. And I had already lined up the buyer. And the argument made to me was, oh, MF Global is a broker. They charge 10% or whatever. This is just what people make for small transactions. So, I learned a few months in and had a huge feeling of regret that that is not what I should have done.

And.

Mo at Boomerang just acquired GQs. They didn't use any bankers at all. And she had a way, not only did I pay a million dollars for bankers, I paid 70 grand for lawyers in this tiny transaction. She has the way that if you are either going to buy or sell in early stage SaaS, you need to copy her playbook. So this show is all about the playbook to buy or sell an early stage SaaS without paying a ridiculous banker fee, which bankers will tell you you need to do, and optimize legal fees, which will absolutely destroy you if you're not careful. So I am so happy to have Mo, Alex, and Cameron. Welcome to the show, guys.

Hello, everybody.

Should we intro you? We've had Mo on the show before. Mo, can you just tell us about your company?

We're Boomerang. We've been in email productivity world for 15 years. We started out as a Gmail extension that keep growing into more and more of the personal productivity world beyond email to meeting scheduling. And now we're extending to project and test management for person and teams with GQ.

Amazing.

And here too, we have Alex, your co-founder over at Boomerang, and we also have Cameron, who's the founder of GQs, who you acquired. So we're happy to have the whole team. We'll be covering all aspects of the transaction, talking about the good, the bad for everybody involved. So we're glad to have everybody. This is the biggest panel we've panel. panel we've had on the show so far. So this will be great. Now, guys, what we do in the beginning, we do our classic, it's called the pitch slap. So we're going to call somebody up.

In audience, by the way, we're talking to you right now. We're going to make this clear. Audience, we are talking to you right now. Because like people at the end of last episode, two episodes ago, were like, I didn't know I could come up and pitch. this is your opportunity for your 2 minutes of fame. Come up, become a panelist, pitch us your startup. If you get above 66% people that would buy, we're gonna send you a swag box. Above 33%, we're gonna send you a t-shirt. And then when you get done, we're gonna book you demos from the audience. We booked 16 demos three weeks ago. Who wants 16 demos? Anybody? Before we start, The sponsor of the show is my newsletter. I just dropped it in. It's content updates primarily, and what's going on in my own business life or whatever. Sign up to my newsletter. So if you want to come up here and pitch, raise your hand. If you've pitched before, please don't raise your hand because we're not smart enough to figure out who's come up before.

I have a running sheet, but yeah, it's difficult. So yeah, raise your hand. So we have Deepak said he's in for the unfuck my startup section. He needs some help, but Jack Roosevelt, Jack, you want to raise your hand? And John, why don't you promote Jack to a panelist? Jack, camera on. So if you're calling from bed, man, that's your own doing, buddy. But Jack, how you doing? Welcome to the show.

Hey guys, how you doing?

Good.

Great to meet you, Jack. Great to meet you guys too. All right, the TLDR on Lucida Club is very simple.

We work- Sorry, real quick, could you paste your URL into the chat so everyone can check out your website while you're pitching?

Yep, I'll do that right now. And John, let's get the buy or not buy poll going so that we know it's going to get- Dude, you got to know it's swag, boxer, hoodie.

It's very important.

All right.

All right. Lucidaclub.com, there you go.

Thank you.

That's it.

Well, we got three buyers before you start already.

They like- On the puzzle. Oh, I can't vote. Sorry.

Go for it.

I was like, I'm voting for myself.

Yeah.

All right.

Lucidaclub, very simple. We're a SaaS platform. We work with highly regulated industries. Right now we focus on cannabis brands, CPG brands. We don't really work with flower brands. The problem is very simple. If you're a cannabis brand, you cannot sell direct to consumers. You are a consumer facing brand, but you have to operate like a B2B business. Consumers can only purchase from licensed retailers. So if you're a consumer and you have a specific product, SKU, whatever that you really enjoy, a certain type of gummies flavor from a certain brand, To figure out where you're going to buy that or how to buy that, you have to hop from one retailer website to another. With our platform, we have two widgets get installed on the brand's website. You go to the SKU you want, you go to the product you want, you click order now. We will show you the nearest retailers to you, the consumer that have that item in stock, and you can send that order to the retailer as a pre-order. and, or you can go to the map, find the retailer, see the entire inventory for that brand that's live at the retailer, figure out what you want to buy and send it to the retailer as a pre-order. Very simple. We make it so that the brands can actually operate as a B2C business instead of a B2B business. And we make it easier for consumers to find what they want and buy what they want.

Sounds like it's solving a real problem. I like it. Cool, what stage are you at?

We're live right now. Sweet. We've got five paying clients as we talk right now, and we are on a big push to increase that.

Cool, awesome.

Yeah, we pivoted pretty heavily from our first version, which was a B2C focused marketplace.

And how do you charge?

So brands pay us a flat monthly SaaS fee at the moment. Once we get more transaction volume on the brands' websites, we'll take a small commission of the sales volume.

Sweet. Anybody else got any other questions?

We had somebody ask if this can be applied to other industries, because most of our viewers are not cannabis brands. So is there anything- We are- We're.

About to roll out for the alcohol side, and we've had a number of non-regulated brands come to me and say, Hey, can we work with you too? And so the answer is very simple, yes. The problem is it's pretty acute for most startup brands that are trying to get in front of their customers, because if you've got anything out in a retailer, a lot of people would be like, great, I can wait three to five days for you to ship it to me, or I can walk down the street and buy it now. And so we, that is absolutely there. There are actually just so for, you know, transparency sake, there are some, some companies that do this in the non-regulated space already. So you can, I actually got the idea originally by looking at Patagonia's website, and I was checking out for something and went, oh, what's this button do? And I went, Holy shit, that's the only way that you can buy something in the cannabis space. And so I took that and went, great, let's use this problem and solve another one over here.

Awesome. Well, Jack, thanks for coming up. Oh, yeah.

Go ahead.

Oh, thanks for coming up. Drop your calendar link in the chat here so people can book and remember folks- oh, 52%.

Come on.

Well, I think a core problem is this isn't a D2C show, so it's all these startup founders and it's just like a mystery.

We're B2B, we're B2B. I work with the, but very few companies or very few cannabis or alcohol brands are on here. But yeah.

Yeah, yeah, exactly. Anyway, thanks for coming up.

Best of luck, everybody.

I have no doubt you're gonna crush it. Nice beard.

All right. Thank you, Jack. Well, let's dive into this. Let's dive into the discussion part. You know, this is why everyone's here. So, This is for Mo. Why were you so motivated to acquire GQs without bankers? I'm curious if this was like a plan from the start. Was this a concept you stumbled across in the midst of the acquisition phase? Where did this idea come from?

So it was the plan from the start to do a founder-to-founder acquisition. So back in 2022, late 2022, when the zero interest rate goes away, we were starting to see some of the products and teams that we kind of, you know, enjoy seeing in the productivity world starting to close down because they couldn't get the next round of funding. So we had it in our mind that like, we should be able to do a founder to founder acquisition with, from just our startup network that we have. And so I started putting out feelers to like various startup incubators, some investors that we know, hey, if you have somebody on your portfolio or somebody that you invested that are basically running out of money or running out of steam and they want a landing spot, and if they fit the following criteria that we set out, revenue parameters, what product they should be in and what industry they should be in, So instead of, and we could have gone to a banker and say, hey, we want to buy this type of company, run a process, but we didn't want to do that. We intentionally wanted to buy it directly founder to founder. And so I was asking around people in private, you know, sending emails or, you know, sending DMs. But Alex had another idea and he did his own way. Alex, you want to talk about?

Yeah, I mean, something that I'd been meaning to try had just shut down. I was like, oh, man, I always wanted to check that out. I forget exactly what it was. And I was like, you know, I'm just going to post on LinkedIn and just say, hey, you know, I know that times are tough for funding right now. You know, we're not in a position to do a, you know, $50 million acquisition or anything like that. But if you've got something that's showing some, you know, some, some, some growth, you know, not, not probably the rocket ship, but something that's got some potential in the productivity space. Reach out before you shut down, give us a call because we're potentially looking for something and we'd love to keep something cool going.

And you cast that out on LinkedIn?

Yeah, just posted it on LinkedIn.

This was 2022 and unbeknownst to them, I saw Alex's post because we had known each other for a decade just meeting at Google conferences and other tech conferences. And I saw that. I was like, oh, isn't that interesting? I'm not ready to sell GQs right now, but I'm going to keep that in the back of my mind that they are apparently in a position where they could acquire another company. And I've always liked Alex and Boomerang and what they're building. So that was kind of the first kernel of this deal was back in 2022.

And Cameron didn't say anything. He just, you know, like, it just, he probably, I think he liked the post, but I didn't, it was like, well, that was a dud. That didn't go anywhere.

And lo and behold, two years later. And the, and the deal finished in December 24. Is that correct?

Correct.

That's when it was announced. So I'm curious, like, I would think now, I, I haven't been at the front desk of a, of a transaction yet, but, I mean, there are a lot of, there's a lot of due diligence that needs to happen.

Right.

There's a lot of things you need to evaluate both in terms of legal, Financial. So without those external advisors, like, I'm just curious what those big challenges in handling that for the first time were. Was it past experience that helped you out? And I guess second to that, or in conjunction, like were there tools, processes that you relied on in order to kind of fit that role of what the bankers would be doing from a due diligence side?

Can you, well, what are you exactly looking for?

Yeah, like what was the, what was a big challenge or, basically handling this acquisition without those advisors and bankers to help you do the due diligence?

I think the I wouldn't say challenge, but the thing that we focused most of our attention on was kind of the deal structure at the very beginning. Like we were talking about whether it should be an asset purchase agreement or a merger and really did our homework to understand pros and cons of which type of deal structure and what kind of risks and ramifications they have for the surviving entity that after two companies combine. And it was a lot easier than a normal PE type of acquisitions where both parties are not perfectly aligned on what's gonna happen afterward or like they are just trying to sell it and get out. Here we know that we are all parties involved are optimizing for the success of the combined entity afterwards. So we emphasize it to our lawyers and people that we are kind of getting advice from that for the best outcome for this, what structure should it be? And that's the, I think that was where we spent most of our time understanding and getting it correct. And then we did a lot more on the major deal terms really nail out between Cameron and us just, you know, having on Zoom call, blew him out, talk in person. And the term sheets where the LOI has all the important parts. And this is just term sheet that we wrote. And the lawyers, you know, not necessarily are always going to like the founders wrote the term sheet themselves and send it to the other founders directly. But we did that because we knew that we needed to agree on the big pieces before we get into the legal nitty-gritty details. So that was the part where I would say not necessarily a challenge, but where we spent a lot of our mental focus on and getting it right.

And I think- can I ask a clarifying question real quick? So like, How do you do your homework on what type of deal? Was this with lawyers or was this just asking ChatGPT or like what, I mean, that was like what the banker did for us, right? But then I was told after that you could have gotten this information elsewhere, right?

Yeah, we did a lot of Googling, reading, looking through stuff, but we also talked to our own bankers like, Hey, Lawyer. Get bulleted list of what's pros and cons. Alex, you got something?

The lawyer. We talked to the lawyer.

A lawyer. Our lawyer and he talked to his lawyer.

Got it.

On my side to kind of prepare and think about this, I talked to a few mentors who had done strategic acquisitions in the past and how to think about them. And then I reached out to Quiet Light Brokerage. and had them do a formal valuation of my business. Because when Mo and I first started talking, of course, she wanted to know, like, what ballpark multiple am I thinking they already have their, you know, figure in mind? And are we close? And I hadn't sold the business before. I needed some kind of guidance on, you know, is my dream number actually reasonable or not? And so I did get kind of an analysis of the business.

I did ask a few people around us, other founders and also our investors that Boomerang has our seed investors who are, you know, has in a lot of different companies. So talk about ballpark range like, hey, we're thinking about this. This is the revenue. This is the business. This is, you know, what we are acquiring. I'm, we are thinking this range. Are we reasonable? So both side did some informal conversation with people. And I guess in Cameron's case, he did a formal valuation guidance. We were mostly like talking to people, hey, this is how we crazy.

So you basically bet you did all of your, I guess, think tanking with people already in your network. Now, were there aspects of the deal that, you know, you were either advised on from people more on the banking side or, or maybe the legal side that you realized just really didn't matter or weren't that big of a component of the deal you were looking to make?

Yes, there were some parts of the 53-page document that we were like, yes, if both parties are not collaborative, then there's a lot of protection to make sure that there was one thing our lawyer was really hanging on is the bank account transfer and how many hours should Cameron have. And if a customer pay after those hours and it landed on the wrong bank account, what you have to do. And we're like, no, chill, dude. It's okay. Like, this is not a big deal to us. And he's like, oh, you wouldn't understand. I have been in, you know, transition like transactions where it went sideways and people were arguing over this however many tens of thousands of dollars that arrived and they were, you know, cleaning up the mess. And we're like, but no Cameron's joining us. He is joining as a partner to our new business. This is not a thing we care about. So there are parts of like that kind of thing that, you know, two lawyers they are job is to protect us as the buyer to make sure we are getting the best legal protection. But for some cases, we're like, no, we really, really don't care how which hours does the bank account exchange hands.

Yeah, that's funny. So what's interesting too is, I mean, it seems like all of the info that was out there for you and guidance was around people basically one party trying to liquidate and reduce risk, and the other party probably trying to acquire free cashflow at a good multiple so that they could increase their top line revenue. But you, on the other hand, you're like, wait a minute, hold on, there's actually a strategic partnership that is the underlying reason why both parties wanna do this. So I'd be curious to know, like, what were those things you were looking for in Cameron and saw in GQs that was going to add to the sort of the boomerang business environment.

So the first thing, I'm a product founder, right? So the first thing was the product philosophy. And we were very aligned on customer focus, everybody's building because we built our profitable bootstrap businesses. So that customer focus and solving real customer problems, that alignment is the most important thing to me. I have talked to a few other founders and companies before we talked to Cameron. And usually that's where I kind of get hang up on is like, oh, you don't think about what product to build or how to build these products is the way that we do. So that was a major filter for us. And the founder is using their own product dailies. That's a big thing for us. We use Boomerang every single day. Cameron uses his, you know, Cameron uses GQ every single day, and that's you see in the product itself. Target market are very similar. Our focus and philosophy on productivity is very similar. Tech stack is luckily like exact same tech stack, probably remnants of like us starting the company at about the same time. We both have loyal, long subscribing customers, so you know that this product is you know, pass the test of time and even things like, you know, Google integration and then overall the value. So the value alignments was what we really filter for, right? Boomerang is not a normal profit making company. We do donations, we fund climate tech labs. We do a lot of quirky things that are not normal for software company, and not everybody is going to be aligned with all those things that we do. And when we talk to Cameron, it's very apparent that he is also this type of person who cares about doing good things in the world while making money, right? So those things have to all align. And if you like really write out as a bulleted checklist, I was like, wow, this is amazing. This, we cannot kind of like dream up a more perfect alignment in terms of values, philosophy, how we treat customer, how we treat employees. Yeah.

And from my side, like, I was looking for a good home for GQs. Like that was my goal. I wasn't trying to sell the company and retire and just cash out and disappear. Like I was looking for a company larger than me, more resources that had that alignment that would help take GQs to the next level. So I think that's why a lot of this acquisition became simple is because we have that alignment, we trusted each other, and we built that trust through the acquisition process. And plus, I had known Alex for over a decade.

So.

It definitely makes a difference when you get to these some legal points in the document. You're like, I think we can just work this out by getting on a call and talking this through. We don't have to have the lawyers arguing.

Especially because you're trying to actually grow and like, you know, this is what you had said on our call before too. You're like, this is my baby. I'm not trying to just give it away to somebody. I want to like help it, you know, be in the next part of its evolution and find a good home for it. And it's a very seasoned founder thing to say, I will say. Not a young person who's, you know, one year in and wants to boot the thing and go to, you know, Thailand for the rest of their life. So, We're getting a couple.

I wanted to add there that I kind of-- so we talk a lot about values and philosophy, but at the same time, the strategy itself was lined out. This was a-- GQ was solving a problem that we were trying to solve internally for our own team. And after running our hero experiments, I think we talked about it at the last show, we were finding that these repeatable processes are not easily managed with any single tool out there. So we decided this is a problem space that we can expand with Boomerang expertise and solve it for people. And GQ is 70 to 80% of the roadmap there of what we want to build. So when things like that line up, you're like, oh, of course, you know, this is a deal we would be stupid not to do.

She basically just bought that future time and pulled it back to December of 24 and got to be 80% of the way there.

And can I make a couple observations? I've just been sitting here listening to this conversation. So number one, the biggest observation, which I don't think I included in Mo's introduction, she was on the show the last time because she is one of the elite crew who has bootstrapped 10 million ARR. One of my biggest reasons to harp on bootstrapping 10 million ARR profitably with a bunch of margin is because if you do that, it opens the door to do all sorts of cool shit. Like buying other companies that are solving problems that you are strategically trying to solve at a price that works to move yourself towards the goal that you want to move to. And then I was thinking back on the Jesse Stein episode, which a lot of it was about how to play the long game for an acquisition very early. And that dude sold three companies in all of the companies. He knew the acquirer like intimately years before he sold it to them. And this is the story that I'm hearing again now. When I sold my business for $10 million, it was to a customer of the company that I sold who I met and had stayed in contact with for years, like at a trade show, at affiliate summit in like 2015. He bought our company five years later.

Right.

So I see a trend. I imagine that this happens for a lot of people that the trust built over years through literally just like thinking that somebody is a good person that runs a good business is ultimately the biggest factor in getting a deal done. And it leads to what Mo's saying, you can, the only way you can cut lawyers out is through that trust.

Right.

So, those are my observations from the first section.

Definitely.

Well, that's great. We have a lot more to cover. We have some people in the comments asking about how the multiples were just all of these more nitty-gritty transactional things. Before we do that though, this is our second audience member interaction section of the show. It's the namesake of the show, Unfuck My Startup. So if your business is struggling right now, if you are struggling with revenue growth, you've been stuck, we have multiple bootstrap founders here, four of them, to help you out. Deepak had said that his startup was fucked, I think he said earlier in.

The- yeah, we may wanna remind the audience, hey guys, we're talking to you again. You can come up, audience, you can come up and have us basically issue process anything you want about your own business in this segment called unfuck my startup. If anybody is interested in coming up and talking to us about a problem you're dealing with and getting advice from the panel of experts that is here, please raise your hands. Do I see any hands? There are some hands coming in. I think that was an important shaking of the shoulders that I just did.

I'm gonna be much. Yeah, yeah, yeah. I'm gonna. I gotta remember to shake. Wake everybody up from the yeah, yeah, yeah. So, all right, we've got a few folks. We've got Alonzo. Let's pull up Alonzo. He was the first one. And Alonzo, if you could please drop in the URL to your company, we are going to give you two minutes to tell us what your company does and why you're stuck. And then we'll leave about three minutes for some panelists back and forth. Guys, moving forward starting next week while we wait for Alonzo to come up. Producer@rb2b.com, please email if you would like to be featured on either the Unfuck My Startup or the Pitch Slap in the beginning. Drop either of those segments into the subject line, email us, tell us about your company and why you should be called up.

And.

That'S it. So, Alonzo here yet? There he is, Alonzo. Great to meet you.

Thanks, guys. I was the quickest to raise the hand.

That's right. First wins.

Okay, I just based my company's URL in the chat. It's called Newbot. It's a B2B software as a service. Think about it as a CRM that lets you create 8 agents and connect them to your company's channels. so you can automate most of the customer support requests. Especially when you are not available or when you have no one working, for example, weekends or between, I don't know, 7 p.m. and 6 a.m. in the night. And this may sound a little weird, but it happens a lot in Latin America. There are a lot of people reach out to businesses during those hours. And the idea is to have AI be a tool to help businesses after those conversations. So we launched a month and a half ago, and this is the site we pulled out together. We haven't put that much effort on the landing. This is something maybe we should. It's a template with some modifications, but 90 of the effort has been inside the, the internal product. You know, our plans to start at 99 and we have measured that it's something that this Market can pay. We are addressing the data Market, you know, but the main issue we're having right now, this is my hypothesis, is the, the sales processes we have. we closed three deals in the last month, but we, our closure rate, it's less than five percent. So we have had 100 fleets. They reach out to us, they set a discovery goal. We didn't have a demo. No. And ultimately they decide if they want to acquire the software or not.

Are they, so, okay, so I just want to summarize everybody. So you are, it's out of every 100 leads, once you go all the way through the funnel, about 5% are buying. And are those 100 leads people who already booked the meeting or are they just prospects when you say 100?

100 that booked the meeting.

Okay, so we have a 5% close rate on 100.

Yes, but we are also having that 15% low show rate. so 15 of those 100 are not showing and not replying to the conversations at all.

That's actually not that bad. I think that's okay. That part's okay. The other 85 I'm worried about.

Are they inbound?

They.

They found you or you found them? How did the 100 meetings came to your.

They are all inbound. Yes, I forget. We are only running. We only have a few. Video ads that we're running on Meta, and that's how people are finding this.

Are you finding that the ones that come through are not qualified or are they qualified? It's just you can't figure out how to close them.

Yes, most of them are not qualified. Yes, we were having a tricky part qualifying them though. Before we did, we used to have the demo at first. for defense first 10 days or so. That's when we start doing a discovery goal to qualify them before putting all the effort into the demo. So it's been a iterative process to improve to this.

Yeah.

So you're basically getting a lot of clicks on Facebook or on meta that are not of people you actually want to be targeting.

What's your targeting on meta? Are you doing it by Business size, what's your targeting for the ad itself in that?

Yes, we're doing it by business size and by country. Okay, we, I did a quick analysis on intention for WhatsApp CRM. That's the main term we use now because that's our main channel is the all the features we have for connecting to WhatsApp business. and I discovered the three countries that have the most people searching for that keyword. And we targeted to those three countries.

I have a recommendation before I do that. Does anyone else from the panel have anything for Alonzo?

I was gonna ask what Courtney just asked. Was there, have you been asking people why they are not buying?

Yes, so far most of them just ghost us. They, yeah.

They just say like, oh, thank you, let me go think about it, and then they don't come back.

Yes, and even a few of them said, yes, we are very interested. Let me reach out to you tomorrow, and then they never replied to Lena.

Okay.

I have. So I think part of this, too, like in that very beginning, especially with that type of close rate, like you really want to figure out why people are interested enough to take the meeting but not interested enough to buy. We have what I will do. Well, one, I want to give you an RBD Pro subscription for a month just so you can see who the heck's coming to your website and what that makeup looks like and see if it fits your target audience. So I'm going to email you about that, Alonso.

Thank you.

Yeah, of course. And there's also a, so we have this, I'll pull it up and I'll paste it into the chat here, but there's like five staple questions that we always ask when we're launching a new product for customer discovery. Because we want to figure out exactly why people aren't buying. Because in the very beginning, chances are you're going to either have a lot of churn if you have high growth, or you're going to have slow growth. and it's really a motion of customer discovery to figure out exactly what those people are thinking. That way you can adjust accordingly. And often it has to do more with the sales presentation and messaging than it does with the product itself. So I will drop those in in just a second when we start the new segment. But Alonzo, I'm going to connect with you on email. I'm going to give you a pro subscription for a month so you can see who the heck is coming to your website, who's coming from those meta ads. and we can kind of diagnose this a little further. But hey, thank you for coming up, jumping into the fire pit. And I hope this was helpful. Yeah, yeah.

We'll get you headed in the right direction, bud.

Thanks.

All right. All right. So I think let's start this second section with a little bit more context. If I can find the q a again, what I would like to do is hear some of these details that folks had asked about, so. when you guys were figuring out, I mean, price is a big thing that I know bankers, right? That's, this, they're trying to figure out the value, you know, value things, sometimes find you a buyer, all of that good stuff. So how did you go about the valuation process, Mo, to, to, and, and Alex, to, to make sure you were aligned with what Cameron wanted and also we're paying a fair price for his business?

I think getting kind of a what's market right now for the size of revenue and the growth rate and the, you know, business type was the main thing that we tried to kind of isolate. And, you know, that range moved from year to year, right? There was a time in the end of 2021 where everything was flying, you know, several double, triple digit multiples and That was like, we're like, yeah, no, we're not touching that with a 10-foot pole. And it started to come down and be like, okay, this is more on the reasonable side. So like that what's market is fluctuating basically every year, maybe even every quarter. So making sure that we have the right, you know, latest number was important. And that's why I talked to a bunch of friends on what's going on. And, you know, I have friends from both side trying to sell, telling me, hey, this is what I can get for what they are trying to sell.

Right.

And then we also talk to other people who are on more of the buy side. And we have a, a few, like, Banker friends who are like, hey, what do you see that in the market right now that are, you know, because people go out for Market with whatever number they have in mind, but until that transaction actually closed, that's not Market, so. I was asking friends and even our, a few of our, you know, startup lawyers, like, you're doing transactions. Where are they closing at right now? So that gave us a pretty good guidance. We also know what we can afford very clearly from, you know, cash flow and, like, what we can afford to lose. Like, if the deal completely isn't done, are we still able to absorb the impact? Because as you know, leaders of the company, we need to be really understanding how much risk we are taking and what's the worst case scenario so that we plan out with our director of finance and looking through all our numbers and like, this is the number that we can, you know, from the ranges they are saying, we want it to be a good deal for Cameron. We don't want to take advantage of a fellow founder, right? And also, like, we've been in the opposite situation where we almost about to sell the company to somebody else and, you know, we walk away last minute because they were not being fair and they were not being straightforward about some of the terms. So like we never wanted to be in that kind of situation. So we always went with, we're going, everybody is going to be in a high trust situation, show our hands. This is what we can really do. We want you to have a good outcome and feel good there. you join on with us because it's not like in normal transaction where people never see each other again, everybody is trying to maximize their gains, their side, but not in this case. Right. So we wanted to have this, we want to work together for the next decade or more together. Are we going to feel good about the deal that we struck?

Yep. And then was it that I have to ask because you mentioned it that fall. So the 2021, probably we hit the peak valuation mania, I guess we could say. Was that what, so I remember Alex earlier in the show said mentioned, you know, 2022 is really when we start, you know, you started fishing for that idea. Was that a result of seeing those fallen valuations and then you saying, hey, I think we might actually be able to like acquire a lot of our roadmap through this because we can actually get it at a reasonable price now. Was that sort of a thought that went through your head?

Yeah. Yeah.

And Cameron, what about on your end? Like, you're sitting there like, oh, man, 2021 Peak valuation Mania. I always say, like, you're never gonna. You're never gonna sell at the top. You're never gonna buy at the bottom. Right. So, like, how did that feel on your end with the, you know, the dream state of before? Yeah.

You know, I saw. I saw those years, that year and a half go by, and I. And I was like, oh, you know. I had a friend of mine who actually sold during that period and I'm like, oh no, I should have done it. But I wasn't ready to let go of this yet. So I knew for me that even though I could have had maybe better multiples than, I just wasn't in a position to let go yet. So then when it did come along, I think I was understanding where the market was. So when I throughout my ballpark multiple to Mo, like it was based more in the current reality and not some of those high valuations before. And then when we kind of aligned on the multiple, then the real negotiating part, I think for us then was how much is it is cash versus equity? And that's where we kind of, you know, played around with what would make sense for them versus what was good for me and trying to find the common ground. around there.

And I'm curious too. So GQs, correct me if I'm wrong, 2009 is when you founded it, is that right? So we're talking 15 years from founding date to acquisition date. There's a lot of founders in here right now. We've about 200 still hanging on. And I'm sure a lot of people have been, you know, some just started out, some have been grinding for a while, some are growing for a while, got stuck for a while and are trying to figure out what to do. was there like a kind of a aha moment in your mind when you were like, okay, now it's time for this next level and it's going to take a strategic partner to get us there?

Yeah, and it maybe took me a little bit to realize it, but I had pretty high growth for the first eight or nine years. And then things started to level off and I kind of hit this plateau and I kept trying different things. As all founders we do, it's like, oh, well, what if I go after this or try this strategic thing? And it was a number of years where I kept trying things. I'm like, I cannot get it to the next level and I'm not making enough revenue where I can bring on an entire team to help me get there. So for me then, it was, if I want to see GQs grow into what I've always dreamt it to be, I need a partner who is aligned but has more resources that can help me get there. So it was a couple of years and then I'm like, you know what? I'm tired of trying things that just aren't working when I know the answer is I need more people and.

A.

Great team that has great experience in this space already. And that's what I looked for.

Yeah, that's great. And then, I mean, serendipitous, you guys found each other through odd connections, not odd connections, but LinkedIn posts here, remembering you there.

Totally.

Ryan had an interesting question. So he says, did the deal structure include a component for talent acquisition and retention? If so, what percentage of value was placed on tech versus talent acquisition?

Yeah.

Yeah.

I think that's actually one of the things where I think the. So one thing that I took away from this is that we have a lot of levers.

Right.

We had cash versus stock. We had multiple. We had how much would be comp versus how much would be, you know, that the, the purchase of the, of the tech. And there's some kind of ambiguous Parts to that, even in the deal, where it's not actually clear, is this, is this, this compensation or is it a deal acquisition? and it's kind of both. And so I think that's one of the levers you can kind of play with a little bit when you're trying to do one of these deals. There is a component for talent. There are, you know, there's vesting parts of it. There's parts that aren't vested but would not necessarily pay out if Cameron, you know, steals a bunch of money and runs off into the sunset with it. So there's all kinds of parts that are vaguely, you know, a little bit talent, a little bit deal, and how you value those, you kind of squinch at it. And I think actually having those different pieces helped us find the right terms for the deal is being able to put some in this bucket, some in this bucket. And when we went to our investors and we're like, hey, what do y'all think of this deal? Well, this is all comp, you know? But then when Cameron looks at it, well, it's not all comp, but it kind of is. So it's, it's really, it was kind of neat to, I think that actually helped us bridge some of the gaps is having the ability to have some stuff that is sort of comp in some way and, and sort of deal terms in another way.

I think that having founder to founder conversations and pulling the levers together really helps. If we were trying to negotiate it through bankers, to bankers, through lawyers, to lawyers, that's four layers of people arguing without really understanding what we are trying to do. One, we're looking at those numbers. We agree on a Google Doc writing with six bullet points of cash versus stock. One from the cash part, what payment schedule is going to be, what part of it is going to be Cameron's comp and bonus structure for the hiring slash retention bonuses. We wrote it out together and we agree on that Google Doc before the lawyers get to this whole thing. And it was really, it's a non-binding letter of intent.

So we actually misused a deal term in the letter of intent. And we all had an understanding of it. That's not the legal definition of the deal term. And so when the lawyer wrote it up, he used the legal definition of the deal term. And camera was like, wait, this, this is not it. And I'm like, no, that's not it. And so we had to, you know, change. But, you know, it's non-binding so the fact that, you know, we agreed on it in a non-binding way meant that we could go make the deal in the legal document, use the right term instead of the wrong term. So it's nice to have it in that format where it's still not set in stone.

So I have to ask, like what, how has this, so we were three months in now, three months since, you know, the final signature on the doc and the money transferred and whatever, all these things went into place. Has it worked out? I want to start with Cameron and then I'm going to go to, I want to hear from Mo and Alex, but like, what has worked as good or better than you envisioned and what maybe is, you know, you're still working on or hasn't quite panned out. I know you're all here, so it's tough to say that second piece might be tough. So do your best.

It has definitely worked out. And part of the piece we haven't shared yet is in the negotiations up until closing, My understanding from this side was that I would join Boomerang, GQueues would be one of the products.

But.

I would also be working on their existing products and it would just be one of many here. And GQueues wasn't necessarily getting a ton of attention, but they had promised we're going to keep it alive, we're going to help you grow it and give you resources. then on, you know, the day after we closed, they flew me out there. We were going to have a big celebration dinner. And in the morning, they shared that this was actually much more strategic than, than they had shared prior to, because they were going to shift the focus of the company to be on gques going forward and to grow it into this Vision that Mo has had. You know, she's that's when she shared that, you know, this is the 70 or 80% of this grander vision that she had. So for me, that was like very exciting that it wasn't just going to be this neglected product, you know, the stepchild or whatever, but this was going to get the attention and the resources that I had wanted. So, like, it's been all hands on board and it's been super exciting.

And before I have Mo and Alex answer the same question, was that a big fear of yours? Like, basically selling it off to, I don't know, like a private equity firm, having it be a component of their portfolio that was churning out free cash but eventually was just going to be left to die.

I mean, absolutely. And that's why when I first talked to Quiet Light Brokerage, they had wanted me to go through the marketing process and let's get GQs out to our entire network and try to get you multiple bids and that sort of thing. Um, and I, I was very leery of just selling to a random buyer who might just kill it right away on, because that's what they want to do or they don't know the business. And so they accidentally end up killing it. Like, I definitely wanted it to continue. And that was like the big conversation when we were, first negotiating when I came out to San Francisco was, is GQ is going to continue living on in Boomerang or do you guys plan to shut it down? And, you know, it became very clear that they were not going to shut it down and they were great people to work with. So that's why I went forward with the deal.

That's great. And I guess Mo and Alex, how's this all fared? And then we'll do some audience Q&A after this.

Yeah.

I mean, we did a couple more things kind of unconventional. One Cameron was like, hey, okay, when we want to join Boomerang, what role am I going to take? I was like, why don't we just start the first six weeks or so and see how you think about, you know, the team and how you fit in. And like, let's talk about what role exactly you'll take after you met the team and how's it going. So eventually we kind of were able to slot him into our head of engineering and, you know, between the product and engineering where he is really managing all the engineers and interfacing and basically really shaping the product development process. Right. And that part, I don't think, like, is kind of traditional. And it's just a lot of ways that we can do it because of the high trust founder to founder conversation. Right. Because normal acquisition process, people want, what is my title? Was my role? Was my all of this? spelled out with all kinds of, you know, golden handcuff terms in there. Instead, we say, let's feel you out and you feel our team out and figure out how this works. And then from cross promotions, like we, we set some Revenue goal increase for GQ for 2025. And, Cameron, what percentage are we there in the first two months?

We're 30 of our goal for the year, just after the first two months, so.

That'S the revenue growth delta gold.

So, yeah, it's been amazing from a product perspective, too.

Like, every time we turn around, there's more awesome stuff in there that we didn't know was there before. So, you know, there was a secret trick in the embed functionality that lets you respawn a checklist over and over again. And we're like, wait, it can already do this. So it's been like a voyage of Discovery in the sense that, like, every time we, we try to use it, it's like, oh, it's already got one of these things we thought we were gonna have to build. It was just kind of in this other place that we didn't know to look for it.

That was the other thing that was really nice when I joined Mo, kind of gave the company the directive that, you know, we're all gonna start using GQs because that was the culture they had. They always dog food their own product. They've used all their boomerang products that they've rolled out. So it was really exciting to get everyone on the boomerang team using GQs and then collecting the feedback. This is the, the points where with the pain points, the friction. This is where it works really well. These are the things that we should start thinking about improving.

So.

This is great. I think this is a completely new way to do Acquisitions. I'm curious how this fares in the bootstrap world or pit or takes off, I guess, in coming Coming years, I have a feeling Adam's gonna try to do this on his next time at the table. I don't know.

It's just, yeah, there's no way that I'm using a banker again, I don't think. Everything used is something that I wish that I would have done. ended not, by the way.

All right, I think you're back. Well, I think you were choppy for a minute, but you're good.

Sorry. I got Google. I got Google fiber, and it doesn't even. Doesn't work. I don't understand what the problem is.

Oh, man. It's all good. All right, you're back now. How much? Someone said. Oh, man. Sorry. All the. How much are Bankers paying to interfere and add?

Oh.

That's a joke. How much are bankers paying to interfere with Adam Signal?

Yeah, dude. Exactly. I don't know. I have Google Fiber. I don't know why it doesn't work.

For what it's worth, complaining about Google for 15 years together did help build some of the trust in our relationship.

Yeah, there you go.

It's true. You guys are both kind of plugins on that side.

Yeah, and by the way, so to recap this entire thing, If you're going to buy or sell a small SaaS, the biggest three things, don't use a banker, hammer out the main points between the two founders, and if you can operate from a position of trust, you minimize your legal bills and you can get a deal done.

Yep.

One, two, three, boom.

Less painful, stressful situations.

I am glad that I now know that is possible because I did not before. obviously.

Yeah.

And my big takeaway, too, is just the, the kind of strategic advantages that jump just outside of the, the cash that's changing hands and the equity that's changing hands. How can we actually Elevate each other together? Because that's where I think the best, the biggest net positive will come here, guys. Whole panel. Alex, Cameron, Mo, thank you for joining. Mo, great to see you again. Cameron, Alex, thanks for coming on. Guys, we'll see you next week. If you want to join next week's show as an audience member, email producer@rb2b.com, let us know either what you want to pitch or why your startup is fucked up and we will help you out. I just dropped the email in there. Also subscribe to our newsletter so you can stay on top of both live things, not live things. We're doing a lot in the media space, so we are happy to have you all here.

I think there's an old way and a new way of starting startups. It's happening right now.

So let's get into like when is it actually right for you?

You happen to have a large organic social media presence in your target market is relatively far more attractive than if you do not have that.

When your product sells itself, it scales way easier.