Acquire.com Webinar - How to Properly Prepare for an Acquisition (as a seller)

It looks like we have a global community here of people looking to get acquired, so let's, let's dive into it. So I'm going to be monitoring the Q and A. We'll do that at the end. And I'm going to go through the presentation that I put together. So. So as I'm going through this, if you have any questions, feel free to ask. But without further ado, remove this and then let me know if everybody can still see my screen. Okay? Does everything look good? All right, so today we're going to be talking about acquisition preparation and really the importance of preparation. And I cannot understate how important this is because it really is the difference between you successfully selling your startup or having no offers at all and pretty much wasting your time when taking your business to market. Or worst of all, selling your business at a lower valuation than you could if you had done preparation in advance. So without further ado, just a quick agenda. So we're going to be going over introductions. So for those of you that aren't familiar with me or acquire.com be introducing the company and what we do. And then also, again, why is preparation so important? And then we'll be talking about what are your acquisition goals, what are you trying to achieve out of an acquisition? And then also how to think like a buyer. The more that you can understand how a buyer thinks, how they value your business expectations they have when they review acquisition opportunities is key. So we'll discuss that. And then just getting the basics right. Sometimes the basics can be just everything you need and there's a lot of nuance to the basics, but just getting that right, we'll end it with that. And then also going over the services we offer@acquire.com where you really aren't alone when you sell your business with us, we help you every step of the way from start to exit. So without further ado, my name is Andrew Gazdecki. I am the former CEO and founder of two different startups. We one was called Business Apps, the other Altcoin. Both acquired. One was a SaaS company, one was a crypto product company from the ground up with blood, sweat and tears. I know what it's like to go through the acquisition program on this, but preparation is a big, big, big part of it. And really at acquire.com, our our mission is to build the world's most founder friendly startup acquisition marketplace in the world. And a big part of this is webinars like this where we educate startup founders and business owners on really what does it take to get acquired and how can you maximize your acquisition? And there's a number of different ways to view that, from the price to the terms to the amount of buyers that are interested, the time it takes to successfully close a deal. And again, preparation is a big key of that. And in terms of acquired comms performance, we've been in business for almost, almost four years now. We turned four in January this year, so we got a birthday coming up. But we are truly a global company. We've had acquisitions in over 78 countries. We've helped over a thousand startup founders sell their businesses. We've done over a half a billion in closed acquisitions. We have over 350,000 registered buyers and over 2,000 listings on our marketplace today. So tons of activity, tons of different startups, tons of acquisitions, closing, so you've come to the right spot. And then in terms of just press mentions, we've been mentioned in some notable publications, but really I want to dive into really why everyone came here today. So let's start with the title of the webinar, which is why is preparation so Important? So a lot, I think, a lot of founders think that you, you know, one day you show up, someone has a big check, and then you get acquired and you don't have to do any sort of preparation. And that is true except only for the majority of, or the small majority of startups that are growing like crazy and you're being chased down by Google, Apple, Facebook, everyone wants to acquire you, but for most businesses, you really, really have to sell your company. And so I'm going to dive into that a little bit more right, right now, into the specifics of how that works. So moving back to the slides. So the benefits of acquisition preparation. So I put this into just three really simple buckets to really try and get the point across. So when you properly prepare for an acquisition, and I'll go into detail in terms of what, what type of preparation specifically, what materials you need. But when you prepare your startup for an acquisition in advance, you dramatically increase your buyer interest, which maximizes your valuation, which helps you get acquired, plain and simple. So preparation really can be the difference between not selling your business, selling your business at a lower valuation than you could possibly get if you prepared in advance for an acquisition. But then most importantly, it could be the difference between you selling your business or not selling your business at all. And so again, preparation, extremely important. So when I say preparation, what do I really mean? So the way I like to think about preparation and really the purpose of it is you're closing the knowledge gap for buyers. Buyers don't necessarily know everything about your business. I think a lot of startup founders that we work with assume that buyers know everything or just by looking at your website or just a simple, you know, review of customers or something like that, they'll have enough information to really make a decision on if this is an acquisition opportunity worth pursuing. But that's typically not the case. And so what you want to do and the best way to think about your job during an acquisition process is you want to close the information gap. And so the best way to do that is to prepare in advance with materials such as a balance sheet. Being really clear on your revenue metrics, your profitability, being able to answer clear questions in advance. This one is absolutely huge because most buyers have very similar questions. And we have documents that we share with every startup that lists on acquire.com that helps answer these questions in advance. So when they speak to you, they have a advanced understanding of your business and you can really get to talking about the important aspects of your business. But the documents that you see on the right hand side are sim, Due Diligence Checklist and Transition Guide. And then also things like a 24 to 36 month profit and loss statement. A SIM is a fancy acronym for confidential Information Memorandum, but it's think of it like a reverse pitch deck. So instead of pitching investors, you're pitching potential buyers on why this is a good acquisition opportunity. And again, really just kind of putting more nuance on this. So when you are prepared and you go to market and you start speaking, speaking of buyers, these are really the main benefits. I could list out 50 of them, but I windowed it down to just these six. So the first one is it makes it easy for buyers to understand and acquire your business. I think a lot of startup founders don't realize that buyers look at a lot of different businesses. Some buyers actually look at 20, 30, 40, 50 businesses per day. And so the more you could, the easier you can make it for a buyer to understand how your business works, the easier it's going to be for them to have the interest to get on a call to really learn more about your business and then eventually lead to a successful acquisition. Number two, it increases buyer interest, which increases your leverage. Because the way to get the highest valuation for your business is you need to increase buyer interest, drive as many buyers to your acquisition opportunity, which then ideally leads to more than one offer. Because one of my favorite quotes is if you have one offer, you have no offers. If you have one buyer, you have no buyers. And so what you want to do is really have all your preparation in place so it makes it easy for buyers, increases interest, and that leads to more offers, which leads to a successful outcome. And acquisition number three would be saving time for the buyers so you can accelerate due diligence. So if you go and list a business without being properly prepared, you're immediately going to be asked the most the same questions from buyers in terms of how does your business operate? What is the financial health of the business? How are you acquiring customers? What is your ideal outcome? All these questions you can answer in advance and save buyers a lot of time. So you can accelerate the whole acquisition process, specifically due diligence, so you can get to offers faster and move buyers along quickly within your process. And then four would be really wowing buyers and showing that you are serious about an acquisition and that you've done your preparation in advance. And buyers will appreciate this. Buyers are watching kind of every move that you make in terms of are you prepared? Do you have a clean pnl? Have you taken the time to really answer very common due diligence questions in advance? Have you just taken any sort of time and effort into this acquisition to show that you are motivated to sell this business? Because as a buyer, no buyer wants to go into an acquisition conversation with a seller or a startup founder where maybe they're not serious or they have to pull a bunch of information out of the owner of the business just by making their lives easier. And really impressing them from that first impression is critical because you can't get the first impression back. So again, the more that you prepare, the more you can wow buyers and really get them excited about your business, which again, the more buyers you get interested in your business, the more offers you'll potentially receive. And that gives you leverage to increase the valuation or potentially the terms. And then number five would be reveal and solve problems before they impact your exit. So there's a lot of different things that can really blow up an acquisition, and a big one is, is definitely surprises. So you don't want to go into due diligence. And a buyer not fully understanding how do you acquire customers? What is the financial health of your business? Just the basic items that you can get in front of before you enter into a formal offer, letter of intent. Because if a surprise comes up, for example, they think your revenue is $2 million, but it's actually 1.5. That is a situation where most acquisitions will fall apart and it's such an easy item to get in front of just from preparation in advance of speaking to buyers. And then I'd say more. Most importantly, every business owner, every startup founder is looking to maximize your acquisition. You don't want to sell for the lowest multiple. You don't want to sell for a price that may be on the lower end of the spectrum. And so preparation really does help increase your valuation and really does lead to a successful acquisition. Because the name of the game is creating as much buyer interest as possible. And the easier you can make it for buyers to understand your business feel that this is a serious acquisition opportunity, you've spent the time to show that you are a motivated seller, the more buyers are going to be interested in speaking with you, which again leads to more offers. The more offers you have, the more leverage you have to negotiate against price terms, whatever it may be, and then really getting down to the nuance. So what are these documents I'm talking about? What are these? What's a SIM Due diligence checklist? Like what, what sort of preparation should I, should you do? So broken this down into three parts as well. So the first one is clean financials. If you don't know the numbers of your business, have, if possible, a 24 to 36 month profit and loss statement broken down by month to really give buyers a true picture into the financial health of your business. This is probably the most important one, I would, I would say. But then also the more information you can provide, such as the balance sheet or being really clear on revenue metrics, profitability metrics, and then moving over to buyer documents, you can think of the financial documents as, this is the financial health of your business. Buyer documents are documents that help buyers understand how does a business operate. What are the growth opportunities? What have you done in the past it's worked. What have you done in the past that hasn't worked? Who's your target customer? Basic questions about your business that really helps the buyer quickly understand, okay, is this a healthy business? Is this a business I understand? And all those questions are contained in a document that we call sim. And that really helps accelerate a buyer's ability to understand your business, which then increases their chances of wanting to get on a call with you, wanting to learn more about the business. And all of that really helps you because when you go and sell your business, you're selling it like it is a sales process. And so the more that you can provide buyers in advance, the better. And then Due Diligence checklist is another document we provide which is again just very, very common due diligence questions. And we call these pre due diligence questions where we're just giving buyers high level information about your business in terms of what's your churn rate, what's your growth rate, if you had, you know, an extra 10,000 to spend on marketing or what channels have worked. There's a number of different questions that are relevant to different types of businesses. But just having a due diligence checklist also can go a long ways, especially when complemented with the siem. And then the third one would be the transition guide. So this is basically a plan. So as a buyer you're thinking, okay, so everything looks good and then if I buy the business, how are we going to transition the assets? What services are you using? What servers are using? Aws, using Google Cloud, Are you using Stripe, using Paddle? What you know, does letting the buyer wrap their head around all the assets that they're going to be purchasing and then just having a clear plan in terms of how are we going to transfer the business over to you can go a long ways because again it shows buyers that you've prepared in advance from start to finish, you've thought about the questions that they're going to ask. And then you've also provided information around common pre due diligence questions. And then also if you get to a point where there is final interest, you have a plan in place on how to transition the business over to a new owner. So these are absolutely critical. I would, I would go as far as saying that without these documents, your valuation will be lower by 20, 30% because a buyer has to really pull this out of you. And it's with buyers looking at so many different deals. Again, the easier you can make it for a buyer to understand your business with this preparation, the more interest you're going to get, the more offers you're going to get and then the higher valuation you're going to get and the happier you're going to be with your exit. So definitely take the time, fill out these documents, they're completely worth it. Promise you that. And then the third one would be your acquired profile. So when you list on acquire.com, we allow you to connect your metrics so you can show a anonymous view of your business's health just by connecting QuickBooks or connecting Stripe or whatever billing system you you may use. And all this does is really builds trust with buyers because there's another great quote where you cannot do a good deal with a bad person. So the more that you can let a buyer get to know you is also in your best interest. So connecting your LinkedIn profile, letting them know who you are, where have you worked, what's your background, where you located. Also record a introduction video. This can be a really quick loom video. You can upload it to YouTube and have it as unlisted and or you could just upload the video file, but just a two minute video where you're simply going over the business opportunity, why it's important, why they should acquire your business, why are you selling the business, all those little details, but what you're really doing is you're giving the buyer an understanding of who you are, why are you selling, what is the opportunity here and why should they care? And then with that, you can also outline the growth opportunities potentially in the video. So these are just some, some quick tips right here. But all this added up really leads to a smoother acquisition process for every business that we've worked with. Now moving over to your acquisition goals. So these are some questions to ask yourself. So these are questions that all buyers are going to ask. And so you want to have a good, clean, concise response when buyers ask. And the first question is typically, why are you selling? Because really what a buyer is looking for is, you know, are you selling this business because you see something in the future where revenue might decline and it's just not a good purchase. And so you know, are you retiring? Are you moving on to a new venture? Are you just looking to cash in your chips because you built a great business and you know, it's been eight years, 10 years, and you're just looking to move on to something else. And then also asking yourself, what does life look like to you post acquisition? This one is also really, really big because another job when you're speaking with buyers is to really de risk the acquisition for the buyer. And what I mean by that is when you prepare in advance, you provide so much context upfront in terms of what the opportunity is really, where the value is in your business, how to look at it, and getting in front of all the common questions. But other questions that buyers are going to have is are you open to staying on for a period of time, are you looking for a clean break? And what I mean by this is are you willing to help post acquisition, are you willing to help with a transition plan? And I recommend saying yes to these items because these are also ways to increase your valuation. And the way I think about increasing valuation is really de risking the whole acquisition Process for the buyer as much as possible. And transition can be pretty risky for a buyer if they acquire the business. It's not like buying a house where you just get the keys and okay, you have the house. It's typically a business with customers that might be on a unique payment plan or there might be a bug that could take the original owner two minutes to fix, but a new owner two weeks. So being available for a period of time can really increase buyer interest and also lead to more offers as well. So be flexible, but also be firm on what your expectations are in an acquisition and what you want to get out of an acquisition. So understanding the benefits of being flexible, but also if you're looking for a clean break, understand that your valuation might be lower. But if that's really where you are in life and you just want to move on from the business, those outcomes are also possible too. But it's good to talk talk about these types of outcomes early in the acquisition process. So you don't get too far down the line and, and then a surprise, you don't, you're not interested in staying on or something like that. Because again, like I said previously, surprises do unfortunately kill a lot of acquisitions. And then moving on to the third one, what kinds of deals might get you there? So are you open to creative deal structures? What I mean by this is typically the best acquisition structure is all cash at close short transition period, obviously fair valuation. But as your as your valuation increases or to increase the buyer pool of your business so you can attract more buyers, which leads to more offers, which allows you to really negotiate on terms and price is, are you open to creative deal structures? And what I mean by this is are you open to selling the business where 80% of the initial payment is cash and then the other 20% is seller finance, which is essentially a loan from you to the new owner of the business to be paid back either monthly, quarterly for a period of one year, two years, sometimes five years, depending on the size of the acquisition. Are you open to an earn out or a blend of both or any other different components? And these different components really are put in place by a buyer to again de risk the acquisition for themselves. So if an issue comes up, you're available to help. And so these are other things to think about is if you simply state to buyers that you're open to creative deal structures. This is your preference though. But you are open to seller financing, you are open to some earn out and rest assured, any sort of offer that you get on acquire.com. we do review letter of intent. So if you get an offer with a really confusing earnout or a combination of everything above, we'll review that with you and give you our advice on if this is a reasonable offer. Because sometimes an earn out can be unobtainable or whatever the situation may be. So we'll give you feedback and you can rest assured we're in your corner to make sure that you do get the best offer. And then finally, how can you convince buyers to offer the deal you want? So this one's pretty simple. So being easy to work with, no surprises there, being honest, being prepared, being realistic on asking price, being responsive, and then just ask. I think that's a big part of acquisitions is if you are speaking with a buyer, you've done your preparation, there's clear interest, you're getting along well with the potential buyer, they're asking good questions. It doesn't hurt at all to just say like, hey, where are you on, you know, potentially submitting an offer? How are you potentially valuing my business? Just pushing them towards, you know, an offer by just asking can also be the difference between you selling your business and not selling your business. Sometimes you just have to ask. But the items above is, I think, more important because you gotta be easy to work with. You gotta be honest about your numbers because anything that you're not honest about will come up in due diligence and then the acquisition won't go through because again, surprises do kill sale. Acquisitions then also being prepared, you're showing a level of preparation and seriousness and being motivated to sell your business because again, putting on the buyer hat. A buyer is going to dive in your p. L, they're going to read your entire confidential information memorandum, they're going to go through all of your numbers, and that takes a lot of their time. And so just understanding that as a buyer, you don't want to go and you know, maybe I'll use an analogy here, but test drive, you know, a car and you know, go and have a mechanic look at it and get a third party, you know, to help with due diligence, whatever it may be, and then find out that you're not, you know, serious about selling the business. It's, it's just not going to work. And so being prepared is one of the best ways to show that you are serious about selling the business. You provide all the documentation in advance for a reason. And that really allows you to again, create as much buyer interest as possible. And then next would just be being realistic on asking Price, I'd say probably the number one reason that most startups don't sell is asking price is just too high, it's out of market expectations. And again, the whole process of an acquisition is closing the gap on information of your business with a buyer, also valuation expectations. And then the last one I put is just being responsive. And I want to touch on this one a little bit, because when you are actively speaking with buyers, you need to get on a call with them, you need to build a relationship with them, you need to follow up with them, you need to sell your business. You're in sales. When you're going and selling your business and looking to have it acquired, there are cases where buyers just say, this business is so amazing, and here's your offer. But for most businesses, you really do have to be responsive. You have to answer questions quickly. You have to show that when you go through due diligence, you have all your ducks in a row and that there won't be any delays or surprises. And every time a buyer messages you or has a question or schedules a call, be prepared for those, because those are all moments where you can give buyers a good impression about not only your business, but yourself, because they're buying the business from you. Now, moving on to buyer red flags. So you really want to think like a buyer when you go to market. So, and here's some clear red flags. Number one is you can't answer their questions. So as a buyer, they're immediately going to be thinking, do if you don't understand your business, how am I going to understand your business? So definitely understand that the questions that buyers ask, you want to ask them clear or you want to answer them clear and concisely. So the buyer really feels confident that you know your business inside and out. And again, that really does speed up due diligence. And then also what I was alluding to before is you don't answer questions promptly. So as a buyer now I'm thinking, okay, is this person serious? Is this person one foot in, one foot out? Are they really looking to sell this business? Am I going to have to chase this person down for information so I can get to a formal offer? So be responsive. Answer questions within minutes if possible, ideally within an hour. There's a stat in sales where if a lead comes in and you don't respond to that lead within the first hour, every single hour that goes by, the chances of that lead converting goes down. And so when you're selling your business, you want to think about it like a sales process. So be prompt, be punctual, answer questions quickly if you're able to, and also be sure on your goals. So if you're not sure about your goals leading to what I was just saying is, buyers immediately start thinking, okay, if I'm going to invest all this time necessary to really figure out if this is an acquisition opportunity worth pursuing, I don't want to go through all that if I'm not confident that the owner of the business is on the same page as me. Like, you have your goals outlined, you're serious about selling the business. When a buyer feels that you're serious about selling the business, you're aligned on price, you're aligned on the preparation that most buyers expect, then they're going to view that this is a serious acquisition opportunity and buyer interest is definitely going to go up. And then moving on to the next one, you can't articulate the opportunities. So if you can't articulate the opportunity, it's going to be really hard for a buyer to understand the opportunity. So you want to get really crystal clear on how are you presenting this opportunity. Is it a business that's growing? Is it a business that you're no longer interested in? Is it a business that's extremely profitable? Really being able to articulate that opportunity and really understand what gets buyers excited. And one tidbit I'd add on this is every buyer has a different, I wouldn't say every buyer, but many different buyers have different reasons for buying the business. One might be a buyer that's a financial buyer, and they're looking for stable cash flow, profitable businesses. Other buyers are looking for growth opportunity businesses, ones that they can take and potentially grow. There's a number of different reasons. Or you built a novel piece of technology and they'd like to add that into their existing company as a strategic acquisition. And so understanding you know, what is what is opportunity. And then if you can narrow in on understanding what is the most attractive part of your business to buyers, and the best way to find that out is just ask, be like, what about my business attracts you the most to this opportunity? And that's where you really want to focus on. And then lastly, your data room is inaccurate or untidy. So again, this really starts having a buyer think, is this person going to be a headache to work with? Again, really leading back to you want to appear serious about selling your business. Otherwise, buyers just aren't going to lean in and spend the time to really understand your business, because they have to understand your business and they have to speak with you multiple times. Then they have to figure out what is an offer that they're going to present to you. So there's a lot of work that buyers do when looking to buy businesses. And the more, the easier you can make it through preparation, the higher chances you are to maximize your exit. So right at the bottom, clear as day preparedness maximizes your exit. Not being prepared wastes everyone's time and makes you appear unprofessional. And that's not, what's the word perception that you want to give buyers, especially when you're in an acquisition process now. So rounding this out to the basics. So this is kind of a simplified view of really how to think about taking your business to market. So first and foremost, repair your financials. Make sure you have a clean P, L profit and loss statement that really breaks out your financials, your revenue expenses in a 24 to 36 month P& L that's broken out by month. And then start building out your data room where you're putting in information about your business, about how does marketing work? How does sales work? What marketing channels or customer acquisition channels have performed well, what hasn't performed well? Ironically, you know, a lot of buyers are okay hearing what hasn't worked because that could be a potential growth opportunity for them if they're an expert in conversion rate optimization or search engine optimization or just sales or mark, whatever it may be. So don't be afraid to say things like, hey, we tried this, it didn't work because that also gives buyers a good direction to head or maybe not to head as well. And it also leads into you being truthful about the business. So you don't want to make everything seem absolutely perfect because if you go into due diligence and then they find something that's not as perfect as you maybe portrayed it, that's going to lead to some issues during the acquisition process. And then when you start listing on acquire.com make sure to really, you know, fill out your listing in your profile, you know, upload your financial metrics, have a nice picture of yourself. These little, these little items really do help because they build trust with buyers and they let buyers know that this is who you are, this is your business, and you've outlined enough information for them to get at least an initial spark of interest to sign an NDA and then enter your data room. And then also understanding like, what is your ideal outcome? What do you want to get from an acquisition? And really being able to articulate to buyers. So again, their Expectations may be here and yours are here, but the more that you can communicate where you are in terms of valuation transition, whatever it may be, that leads to an ideal outcome articulate to the buyers. So if that doesn't meet what they're thinking in terms of what a good deal structure may be, you can move on quickly from that buyer. And then lastly, be personal and responsive. I keep saying this, but a big part about getting acquired really is sales. You have to follow up buyers multiple times, you have to share with them additional information multiple times. You really have to treat this like a sales process where every buyer that has signed an NDA with you is a potential lead. And I always like to say treat every buyer like they're the buyer until they have said they are not. There's another sales stat where it takes about seven follow ups to finally get a response from someone. So at times I have seen acquisitions where a buyer will not respond to a potential seller and after the fifth response they come in and they're the final buyer at the end of the day. So if you list on acquire.com and a buyer doesn't respond to you immediately, keep following up, keep sending additional information, keep sharing good news about your business. We have a number of different tactics that help with this, but with buyers that are responding to you, make sure to respond quickly. They have questions, make sure to answer them as quickly as possible because again, it shows that you're serious and that you're going to be easy to work with, especially as you move into due diligence and some of the more, more nuanced items. So moving on to how do we help@acquire.com so putting this in three buckets, again, we improve listings. So we help create a beautiful profile on our marketplace. We help you connect your financial metrics, we help you understand what a reasonable valuation is and how that's going to affect the buyer interest that you receive. On our marketplace we have profit and loss statements available for you to if you don't have a controller, if you don't have a cpa. Also common questions that buyers ask. And then we also help you get pre financed as you take your business to market, which also helps expand the buyer pool. And I think if you're hearing all this, there's a theme here which is the, the number one thing you want to do when selling a business is creating as much buyer interest as possible. And the more you can expand the buyer pool with simple things like preparation, being responsive, getting your business pre financed, following up with buyers, they all add up to increasing the amount of buyers that are going to be interested in your business. And then we coach you on all this stuff. So some of this might sound like hieroglyphics to people. I hope I'm explaining this well, but we coach founders on this. And there was a time when I had no idea what any of this stuff was. Such as, what are the common buyer questions I should be answering before I go to market? What are the due diligence items I should be answering? What is a living Q and A living Q and A for those that don't know, is basically a document where you put every buyer's questions in one document and then you share that with all buyers so you don't have to keep repeating yourself. But it also is a great way to to follow up and share additional information to buyers as it comes in from others. And then a transition guide. What does that look like? How do you make a clear outline of if you acquire this business, what's going to happen next? How do we make this really, really successful? And also a deal schedule. How do you control the process? How do you move buyers along towards formal offers? And then just understanding that we're available to help at every step of the way. So if buyers issue an offer, we are there to help you review that offer. We're available for pretty much everything from start to finish. Then number three, and this is probably what we do better than any other company in the world. But we market your listing to over 300,000 potential buyers. And so that is done across our newsletter, social media posts. We also do something called targeted buyer campaigns. And this is where we take the buyer data that we have on all of our registered buyers where we know their specific acquisition criteria. For example, if you're selling a business that's a SaaS business doing more than a million in revenue, we pull data on all buyers that are interested in that type of specific business and then we let them know about the opportunity. So really just matchmaking with tens, hundreds of thousands of buyers, utilizing data that we have@acquire.com which all then really attributes to maximizing and driving the most buyer interest as possible. Because again, if you have one buyer, you have no buyers. The name of the game is attracting as much buyer interest as possible. Other things we do as well is we help you with your listings. So we review your pinot, we review your transition guide, we help you complete your profile, we help you complete your listing. And we also will give you what's called a listing scorecard, where we'll Rate your business health, your business's metrics, your business's profile, and then your level of preparation before you go to market. And we'll give you detailed improvement items for you to take and then improve your business's health, improve your business's metrics, improve your business's profile, improve and then improve your level of preparation, which again all leads to a better outcome when you're selling your business. And this is really what buyers want from you is they want to understand expectations, financial versus strategic. Understanding that most of our buyers are financial buyers. And what that means is a financial buyer is typically a private equity firm and a strategic buyer is usually a company that sees synergy with your product or a large public company that sees this product being able to be sold into a new market or help enter a new market. But buyers want to see credibility, fit and opportunity. They want to see data and facts over emotions and hypotheticals. This one is big, especially when it comes to preparing with a valuation. If you just take your revenue number and times it by 10, no buyer is going to take that seriously. I have, I've heard it over and over and over and I used to think it too. I used to think, yeah, just take your revenue number, multiply it by 10 and you're definitely going to get that. But when we're in a market today where public, public SaaS companies are trading at less than six times forward annual recurring revenue, you're not going to be getting a multiple higher than a publicly traded SaaS doing hundreds of millions of revenue, growing at least double digits, if not triple digits, year over year with net negative churn. So this is best in class and so you want to look at comps in the market as well. And then also don't waste your time or educate buyers on, you know, parts of your business where it's really obvious to you but not obvious to them. So you again, making buyers lives easier is the best thing you can do. And that's really how I think about preparation, is you're closing the information gap. You're making it easy for buyers to get excited about your business by providing as much information upfront because they may not want to get a call, get on a call with you initially. Think of it almost like a movie trailer where they want to see just kind of the high level overview pieces of the business and then they want to meet you. So you want to create that spark of interest with buyers. So they're interested in meeting with you and then really talking about potentially buying your business. And then you Want to be professional, easy to work with and organize. I think everyone in business likes to work with people like this. But every response, every detail that you put into your preparation really adds up in a buyer's mind in terms of are you going to be easy to work with through due diligence, are you able to provide necessary information? I need as a buyer to make an assessment on whether this is a good acquisition opportunity for myself. So again, understanding you know, how a buyer thinks and what they expect of you can put you way ahead of other startup founders that are in the market today that aren't thinking like buyers and are more thinking, you know, this is what I want, which isn't real. And then really kind of, this is what buyers expectations are and how to really match those and close the gap. So quick takeaways, prepare well and you'll sell well. So responding quickly, with precision, you want to appear professional. I can't stress that enough. Show you're serious, you want to respond fast. Give confidence to buyers. Be confident in yourself too, in terms of you built a great business and you've done your preparation and you're ready to speak with buyers and you understand the acquisition process. The more that you can really show buyers that you were serious about selling your business and you put the time in and effort to really go through the due diligence checklist, you filled out your profile entirely, you've taken our acquisition course, you're ready to get acquired. The more that you can really go through all these items and it doesn't take a lot of time, but it is a difference between again, not selling your business or selling your business at a lower price, or maximizing your acquisition, having multiple offers from buyers, which dramatically increases the chances of you having a successful outcome. And then just going over some case studies too. So@acquire.com we have helped thousands of startups sell, but these are some case studies that I like to share in terms of what are the outcomes that you could potentially reach on acquire.com so we helped a business called Kissmetric sell. They were on our marketplace for about a month. They had 40ndas and they sold for all cash. Another company called Growth Bar, they were on the marketplace working with our team. So this is our M and A advisory team where we help you every single step of the way. And they were on the marketplace for two months. They had 45 NDAs signed with buyers and another all cash acquisition and then another business called MyWorks, they were on the marketplace for four months. This acquisition was a bit larger, but 40 NDAs signed, all cash, seller, no earn out. And so you can see as the valuation goes up, the complexity of the deal structure can go up as well. But this was sold to a fantastic private equity group. Conch is another great business. Was on the marketplace for about three months, got 102ndas, majority of cash. I closed with a 15% two month holdback. And this was sold to an individual buyer and then also Flockler. This was on the Marketplace for about 6 months. 37 NDAs, majority cash on close with a 1012 month holdback. Sold to also a really stellar private equity firm. So from here I'd love, if you're interested in selling your business, we'd love to speak with you. So you can start by creating your listing and we'll help prepare the exit for you. So go to acquire.com, click sign up as a seller, fill out your profile, and we'll route you to the appropriate person on our team to help most with your acquisition. So thank you everybody for attending. I, I hope this was helpful. How did I do, everybody? Can I get just, just thoughts and then maybe we can open it up for Q and A. All right. All right. I'm loving the energy, everybody. Okay, so let's move over to Q and A. There's been some really, really great questions asked. Okay, so if you have questions, feel free to put them in the question. Where can I find a reliable due diligence checklist? Acquired a com. We have one readily available that we've created based on all the buyer questions that we see and most common ones. So we've basically taken that down to the most common ones that, that we see. So, acquired a comm. What's the ideal length of prep time I should allocate in advance for putting my business up for sale? That's a good question. You know, the way I think about it, I had a mentor told me during my first acquisition and he put it like this. He said, okay, so because I was kind of complaining at the time about how much time we were putting into the data room and due diligence was getting a little tense and he, he gave me a piece of advice. He just said, Andrew, so at this time, just think about what you're getting paid per hour to sell your business. So in terms of prep time, I would say as much as it takes, the more preparation you put in, you're going to reap those rewards later. So do not take preparation lightly. Don't give it 25% or 50%. Give it 110% because that's really how you're going to stand out with buyers and again, really show that perception that this is a serious acquisition opportunity and you've done your homework and you're really looking to maximize your exit valuation. So it can be the difference between hundreds of thousands of dollars and sometimes millions of dollars. So the ideal length of time, you could knock it out in, you know, two, three days. But I would put, you know, at least, you know, a week where you work on it, re review it and then submit it over to our team. And we're happy to also give feedback on these items as well, too. If you're not sure if you know this is good or if this is bad, we're here to help again, every step of the way. Next question. My time is limited to running my business, but I want to sell. How much time should I reasonably set aside going through the process of selling my business? That's a great question. So ideally, if you're looking to sell your business and continue to run the business at the same time, you're essentially picking up a second job. And I ha. I went through this where I sold my first business and my second business without really any sort of guidance. And so I had to balance kind of both of those things. So I would say, you know, definitely expect to add, you know, 20, 30 additional hours of work per week when you're selling your business at a minimum. But that's just how acquisitions go. Like, if you expect acquisitions to be a process of, here's an offer, here's the business you're really missing out on. Again, increasing the amount that you could sell for, because you want to create a process where the preparation is the start, and the preparation is what creates the amount of buyer interest you need to receive multiple offers. And you receive, when you receive multiple offers, you're able to negotiate the valuation up, but also the terms too. When I was going through an acquisition, I negotiated on the terms, and so terms I negotiated was short transition. We had a lot of capital on hand, so I asked them to buy the capital. So, long story short is it's, it's definitely going to take time, but the more time you put into it, the more you're going to be able to maximize that, that outcome that you finally get. Now, moving on to the next question. So what do I put in a data room and what's the best way to organize it? So we actually have a templated data room. It can be really simple, it can be really complex. I recommend as a start, just create A Google Drive folder. Just create a folder for sales, marketing, operations, product, obviously financials. And we have this already set up for you if you just want a copy of it. And then just start putting in just market materials, sales playbooks, any sops you have for operations. Product roadmap. Obviously you can hold back sensitive information if your product roadmap is super innovative. But under just giving buyers as much information as possible always helps. Now moving on to the next question. I have a new venture already launched and I want to negotiate for a short transition as possible for the business I'm selling. What do I need to bring to the negotiating table to achieve that outcome? So if you have a business and you just, you're looking to sell it, move on, and you're not looking to stick around for even a month or two, let alone, you know, 12 months, just articulate that clearly to buyers. I think it will be reflected in the valuation. Meaning the more that you can de risk the acquisition for a buyer, the higher your valuation is always going to be. So if you're just looking to sell the business, you may be giving yourself a 10% discount on the valuation, but just tell buyers that. But at a bare minimum, I would expect that you will be needed for, you know, at least a month or two to transfer all the assets over, make sure the business is stable in the hands of the new business owner. So prepare for that and also just do it because you'll, you'll get a higher valuation as well. So that short period of, you know, one, two, three months of work is going to be, you know, the highest paid three months of your life. So I highly recommend at least trying to dedicate a month at the minute. Bare minimum. Three months is pretty standard. And then typically beyond that, depending on the size of your acquisition, once we get into the millions, you can expect some sort of consulting agreement or sometimes you stay on for longer. So it depends on the size. But I highly recommend transitions and being open to them with buyers because you de risk the acquisition for them. Next question. Is it enough to just have my financial prepared? Do I really need a whole SIM and data room? It's up to you. If you want my honest answer. No, it's not enough. You, you need to provide. The more information you can provide buyers about your business, the more confidence you're going to have in this being a great acquisition opportunity. And then just considering the time it takes to, you know, fill out a sim, a confidential information memorandum, and the time it takes to set up a data room, it is highly Worth your time. It literally is the most highest ROI hourly rate activity you can possibly do as you're selling your business. So I would go as far as saying you're absolutely crazy if you go to market with just a P and L and you don't have a data room set up, because buyers will ask this, maybe your numbers are fantastic. Well, the next thing they're going to ask is, do you have a data room? Do you have more information for me to review? I'm really interested in this business, and if you have it set up in advance, you're like, here it is. Well, that accelerates the whole process of the acquisition that you're going through and gives, again, buyers confidence. Okay, next question. What red flag should I look out for as a seller? What's a sign that buyers are under prepared? Ooh, this great, great question here. Okay, so when, when you're speaking with buyers, you know, sometimes on acquire.com, you'll. You'll message a potential buyer, they don't get back to you. You know, that can be, I'd say, a yellow flag. But keep following up with them. Like, keep following up until they say no. They sign an NDA and they express interest. So keep following up with them until they say no, I'm not interested. But in terms of major red flags as a potential seller, when buyers are not upfront and honest, so kind of like the reverse of everything I just told you. So there's been situations where if you get a letter of intent and they're looking to buy your business, I always recommend having a pre loi signing call. And so the purpose of that call is to really get on the same page and understand if you sign this letter of intent, does the buyer have a plan in place? Do they have a due diligence schedule? How are they going to finance acquisition? Do they have any references they could potentially share with you if you're unsure of their ability to close this acquisition? The more transparent a buyer acts, the better. And the least transparent they ask. Or going in reverse on everything I just shared with you in terms of being responsive, being honest, really, you know, taking the time to, you know, dive into the acquisition conversations with you. If they're delaying, if they're, you know, not being able to provide clear and concise answers on how are they going to finance this? What is their level of interest? You know, the big ones is if they're financing in the background, meaning they say, oh, I have all the capital, but what they're doing is they lock you up under a letter of intent, and they're fundraising in the background, which might not be successful, and that will lead your acquisition and not close. Ask those questions up front, and if you're not confident the buyer has funds on hands, then ask them to verify their funds through acquire.com and our team will review any sort of statements they have to give you some assurances that this buyer is capable of acquiring your business. We could do a whole another webinar on this one, but I. I think the major red flags is just the opposite of everything. As a seller, if they're not responsive, if they have really vague questions, if it's pretty apparent that they don't have any experience acquiring a business and, you know, all. All those little things start to add up, I'd say those are, you know, big red flags. Next one. I'm struggling to connect metrics. Any advice on how to best show this info to a buyer? So if you're having trouble connecting your financial metrics on acquired.com, which is super easy, and it basically builds out a P and L for you, which really builds trust with buyers because they can see your financial metrics on your listing profile, which really does increase the amount of buyers that will sign an NDA to learn more about your business and view your data room. But if you're having any issues, email us supportquire.com we're happy to look into whatever the issue may be and get that resolved for you. Where can I get all the resources you shared in your presentation? We have those available within our team, so feel free to shoot us an email. We can get those over to you, but these documents are. Are typically only available for clients that we're working with, startups that we're working with to help you get acquired. So they are proprietary documents, but we're happy to get on call with you, discuss an acquisition strategy, and see if it makes sense to work with you on helping you get acquired. And then. Okay, I think I have time for one last question. Then I'm gonna go. Everybody. My business listing is actually already live and getting buyer responses. Do you suggest I pull my listing and restart the process to better repair? Yes, absolutely. If this is you right now, if you're on this webinar, if I can get one thing across, if you're listening, if you're already on acquire.com you've been on there for four months, five months, six months, whatever it may be, you're not getting any interest from buyers. There's no offers being made. Pull that listing down, reach out to the acquire team and speak with my M and A team. We will go over all these items in terms of how to set up a data room, how to really prepare for an acquisition, what are the common questions, and then we'll coach you through the entire process. So if you're not seeing any activity towards an acquisition right now, get in contact with our team and we can absolutely help you jumpstart or restart that acquisition process so it comes out with a better first impression, you can have another shot at going to market. So. All right. That was a lot. Fit it all into an hour. I hope you all enjoyed this webinar. I really do appreciate each and every one of you. I know different time zones. It's super humbling. And I hope you all have a great holiday season and we'll be doing more of these webinars. So I hope you enjoyed this one. And rooting for each and every one of you. But if you have any additional acquisition questions, feel free to email my team supportquire.com and we're here to help. All right, everybody, have a great holiday season and I hope that we can help some of you sell your businesses. Cheers.