In this interview, host Akeel Jabber and SaaS acquisition expert Pierre‑Alexandre Heurtebize discuss how the COVID‑19 pandemic has shaped their deal pipeline and strategic approach. Heurtebize notes that the pandemic has not dramatically altered conversation tone; companies most affected simply stop responding, while resilient firms continue to seek growth or capital. Rather than cutting valuations, the firm kept price levels steady and introduced earn‑out components to share future performance risk. They also pivoted to operational partnerships, launching conversion‑rate‑optimization, SEO, and paid‑media programs with DropSend and Postalytics as a way to add value and keep acquisition conversations alive. To boost deal flow during a slowdown, they hired two full‑time interns (Maxwell and James) from Twin Zone, training them in outreach, financial analysis, and deal structuring, creating a win‑win learning environment. Finally, they touch on their high rejection rate (≈95%) of founder pitches, hinting at strict criteria for fit, though specific reasons are not fully enumerated in the excerpt.
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What impact in deals and conversations have you seen with the— you're having, you know, what, 7, 8, 9 conversations a week with entrepreneurs? How has COVID affected them? How has it affected Their cash flow, how has that affected our deal flow in the last few months?
So I would tend to think that I've not seen a clear impact of COVID on the conversation, and I think it's because people who have been really impacted by COVID don't answer our call, simply. I think what we've seen is we have had more conversations of companies raising funds Or trying to sell because of COVID because they're running out of cash because of it. Or we've also had some conversation of people in the were in the middle of raising funds before COVID and their investors kind of bailed out on them. So now they're they're trying to they're trying to get get funds to get going. But overall, I was expecting more conversation of. People trying to sell their business because they were seeing their sales decline. I personally haven't seen a lot of that. I think the conversation I had were mostly people who were resilient with COVID I guess the other small issue that we may have is some people would have been perfect targets for us pre-COVID actually are not anymore because They see so much traction that their valuation expectation is way above what we'd be able to offer.
Interesting. Yeah, it's funny that I remember when COVID first hit back, I think when we were having this conversation, I think in February or March, you know, we were talking to a lot of other investors or buyers, and they were just looking for all these opportunities. They're just on Sharks and looking for all these companies that were gonna be suffering and just pounce on them. And I guess they're not there, right? We haven't seen them anyway. So I don't know if there was some of those opportunities happen in transactions, but I think the ones that got hit hard just failed miserably, right? I mean, like, you see that like in airlines or, you know, some of the big guys, right?
Yeah. And I remember the conversation we had just when COVID hit, when we were trying to see how we could twist our approach and deciding whether we would try to target companies hit by COVID or that we would try to reduce our valuation. And at the end, we basically decided to keep our valuation at the same level, but maybe add more earn-out components, because we thought that would be more fair to the companies. And I do think that was the right approach, looking back at it, because the conversation I had are people who managed to go through COVID. So they wouldn't— it wouldn't feel right for them to accept a lower valuation, because they've proven that they could make it through the current situation. However, they generally understand that obviously the current situation is still unstable and that the earnout piece is to give us the certainty that we're paying for what the company is going to deliver within the next 6 or 12 months.
Exactly. And I think that was a— we made a good shift. We had a good conversation at that point where all of our deals were on hold. I know some of our investors were maybe a little bit, you know, on edge, which is understandable. So we said, okay, well, what can we do? Yeah. So we said, let's shift our focus a little bit. Let's try and help some entrepreneurs here grow their business. Maybe we can apply our playbook to help them grow and maybe from there move into some acquisition or other partnership level. 2 companies we did start working with, DropSend and Postalytics. They start— so we're starting for both of those, we're doing a conversion rate optimization program to help them improve their conversions and signups. And then eventually we'll move to SEO, some paid advertising. We see a lot of huge opportunity with both those companies, and that's what we're doing right now and we're working with. So we like those partnerships as well because some people are just not ready to sell, but we said, let's still work together here and then we can both win in the end, right?
Yeah, I really like that approach because you also keep the conversation going. It makes a lot of sense for us when we reach out to entrepreneurs because we can help them either by acquiring them or by helping them raise funds or helping them on the digital marketing side. And that makes the conversation so much interesting for us because we're ticking a lot of boxes and a lot of the needs that they may have. Exactly, exactly.
And then another shift we made, so not only that is once we decided to really double down on our deal flow and hit it hard during this period while, you know, deals were maybe on hold is we decided to hire interns. So we brought on at least 2, right, full-time on our team. They joined us a couple months ago to help us review deals. We give them the insights on how to analyze the companies in exchange of learning. Can you share a little bit, you know, what the process was there and, you know, how that experience has been in the last few months with you leading that?
Yeah. Definitely, my experience with the Twin Zone has been really great. I really appreciate their help, and I'm trying to touch base with them on a daily basis and also to have monthly proper official feedback from them to make sure that they appreciate the experience. And so far, my understanding is they're really happy with the learning experience because So the deal in taking on interns is for them to help us out with the outreach, with all the different tasks that we don't have the time to do on our own. And in exchange, we provide them proper training, take time to sit with them, virtually obviously, and explain all the different steps of a deal and all the different negotiation structure. And we're really trying to involve them in all the conversations that we have with entrepreneurs. And I think it's really a win-win situation as well, 'cause one of the interns who has been with us the longest is now at a point where he definitely stepped up and he's handling the outreach by himself. He's getting some really good calls booked, and then he's handling the conversation as well with the CEOs, right? Presenting the company, presenting Horizen, all different services, also asking questions about the financials, Having generally very good insight based on his own experience, and I'm always here as a backup when it feels like that you reach a point where you don't really know how to answer. So I think that relationship has been going very well. With the other one, we've been a bit more focused on the financial analysis part of it, and since I've been there, especially with my training at PwC, I know how it feels like and how overwhelming it can be to start with a lot of financial analysis, starting from scratch. So I'm really trying to work with him on making him understand how to be as efficient as possible and the importance of presenting the financials in a nicely formatted way. Because sometimes, especially when you're a younger analyst, you kind of picture financial analysis as something cool where you're going to analyze stuff. What you don't realize is in real life, a lot of time needs to be taken just to present those financials in a nice way, which is going to increase and make the whole process way faster. And you need to think about other people who will get involved, like you, for instance. If you open a data pack for the first time, You don't want to see numbers all over the place. And if everything is clearly defined and summarized, everyone saves time.
Exactly. Yeah, makes sense. I'm also super grateful to have both of them, Maxwell and James. So shout out to them. We are also— I know Pierre is also in the current process of hiring at the moment. We are looking to add at least 1 or 2 more interns in the coming months. So if you guys are looking for an opportunity, collect with Connect with Pierre on LinkedIn, or you can hit me up on Twitter at Akil Jabbar. So I want to talk about another point here. So we you're usually having we talk about seven to nine new conversations with founders every week. What's the number one reason we're saying no to these deals? I think we we say no to maybe ninety-five percent of the opportunities that come our way, right? So reviewing all this thing, what do people think we are and we're not?
Exactly. So the one reason why we say no is because People see private equity, they think we do capital raise. So we do provide M&A advisory to help them raise funds, where we're going to handle the whole process from putting together the I&Ms, the financials, looking for the right investor for them and helping them in the negotiation. That's something we do. However, we don't invest ourselves in companies that are looking to raise capital. The core focus on our business model is to acquire companies. And I see a lot of confusion because we get a lot of people reaching out to us thinking that we're going to be the one investing capital into their company. And so generally speaking, the main issue we have with that, because we could consider doing capital raise if the company Well, add exactly the metrics we're looking for. But generally speaking, the companies that reach out to us, they're more VC type. So they're looking for 10 times revenue valuation multiples, they've been growing 100% year on year, and that's definitely not our business model in terms of acquisition.
