Are You Selling an Asset or Selling a Job?

Inevitably going to go online. And this was back in about 2017 or so, the idea came about. So from there, just looked at, you know, looking at building a learning management system and trying to make it as smooth as possible for. For training to be done online, essentially.

Nice. I love that. How did you get the first customers?

So also through. Through a friend, through networking. Um, so his name is Matthew Henschel. He actually referred our customer to us and I went to go meet them. And funny enough, so when you go meet them, it was a zoom call because they were from the uk. I'm from South Africa at a zoom call. So that was the first customer that we had. And then the same person, he's also in the edtech space, he also referred another customer. So the first two customers just purely came from a referral, essentially.

Nice. And then with your first customers, was it like a completed product? Was it an MVP that they were signing up for? Are they thrilled with it? Was there a lot of buzz at.

The HR teams, Training teams, they can upload their material to our platform, they can distribute the training to employees. There's quite extensive analytics built into the platform, content creation, user management, course management, and quite a few integrations. So in a nutshell, we're just helping streamline corporate training, centralizing all the information, such as SOPs, different training videos, et cetera, to help training teams, onboard new staff and keep continuous education going at organizations.

Nice. I like that. Where'd you get the idea for this? Did you work at a large company before and you saw it was really unorganized or have used like another element? Like, I don't think this is a product. A lot of entrepreneurs go like, I'm super excited to build a corporate sop. Lms. I.

The journey started with a friend, Keaton Saunders. He actually asked me to go 5050 into a small tutoring business. We weren't the tutors, but we both studied engineering, so I studied civil engineering. And at the time we thought, hey, you know, it's a little bit of extra pocket money. We basically took a commission from distributing tutors and finding clients for them. It was quite a lot of manual work, a lot of phone calls and things like that. I just realized it wasn't really that scalable. But I really was passionate about education in particular and, you know, helping people grow their knowledge. And the idea came about where I kind of realized that the uc, the university tuition was. Was quite expensive. And a lot of that went to things like maintenance of the buildings, you know, paying for water, electricity fields, rental Et cetera, but, you know, a smaller portion towards the actual material. So I thought, well, if, if the material's online, I felt like we were never. It forced people to go online and it was just in the right position at the right time to have that solution. And a lot of inbound traffic started coming in from that point. So from that perspective, product market fit kind of just came to me instead of the other way around. Everything was very scrappy in the beginning, so over time it really developed. And eventually where I started to find the right customer profile, I started to build for that customer profile, started to market for that customer profile, and that was corporate training. So in the beginning it was just sprappy, and then it started to consolidate over time.

Nice. That's awesome. So tell me, why did you want to sell the business? It was, you know, things were going well. Product market fit. What did that decision look like?

Yeah, thanks for going great. I had a team of employees eventually, so it was just myself in 2020, grew by, on average, one per year. And when we were acquired, we had five employees. And I really just wanted to prioritize health in the process. So obviously a lot of work as a Solar founder, Bootstrap founder. Reason. The reason for the sale was to give myself a bit more time to focus on my health, essentially. So at the end of 2023, I unfortunately had a pulmonary embolism. It's basically like a clot to the lung. And so I was in the hospital under critical condition for seven days. And it was just a bit of a wake up call in terms of priorities. Um, so I really wanted to focus on my, my mental health, my physical health. And a part of doing that would be to, you know, start to let go of a few responsibilities.

That makes a ton of sense. Um, what was your knowledge around acquisitions? Did you have any expectations going in? Um, like, how did you think you would sell the business versus, like, did you go and reach out to acquirer and you thought it would be a really long process, really short process. Um, then what were your. What was it really like?

Uh, before listing, I used to listen to your podcast. That's why it's such a privilege to, to now be on one.

All right.

And I try to learn as much as I could from, you know, the talks that you gave the founders and, you know, tips and things like that. So it was just the preparation process from around the, the beginning of. Yeah, I would say mid, mid last year. So mid 2024, there was some prep work that went into it. Um, then to list on acquire. I mean expectations were. I didn't really have expectations because it was my first time, but I had a lot more excitement around the fact that there was a marketplace. I had Kai, which is amazing by the way, and he helped me through this entire process and basically hand holding. So things that I just didn't even think of. It was very proactive and I found aquire being really, really proactive with sharing resources, you know, sharing presentations, slides of a roadmap of the journey, which removed a lot of uncertainty in the process. You know, by week three, you should expect this, etc. Etc. You should start contacting buyers. These, these are the type of things you should expect. So it alleviated a lot of the uncertainty.

That's awesome. Do you remember how many buyers reached out or signed NDAs with you?

There were, I think they were about 40 or 50 different NDAs that were signed that, that initiated the, you know, the process where you reveal more information to them. So it was about 40 to 50.

Nice. And then how many buyer calls did you set up out of that? So just a handful, was it a couple?

Yeah. Yeah. So we, I listed hadn't a letter of intent in two weeks, so I only had about.

Oh wow, 10.

No, it was probably around eight. Eight to 10 calls from, from listings. So got the LOI around two weeks after listing. So it happened. That was what was actually more of a surprise to me. I didn't expect it to be that quick, but it was.

That's awesome. Do you remember, you know, the types of terms that you got in that original offer? I assume you didn't accept the original offer. Was it an offer down the road that you formally accepted?

Yeah. So it's, I mean when we, when we. I, I can't disclose figures or things like that, but essentially when we, when we actually did the final agreement, it, it wasn't far off the letter of intent. There wasn't a reduction in value that, that was positive. You know, we stuck to the value. The terms were mutually beneficial to, to myself and to the acquirers. And yeah, it wasn't. You know, I think we were both had a good relationship in our communications and we, we stuck to what we originally agreed upon in principle.

That's awesome. Tell me more about how the acquired team helped you. How did, how did Kai. How was working with him? What did. Was there any kind of moments where he really surprised you or would just bring up things that maybe you hadn't thought about for the acquisition process?

For sure. I think especially in the early stages of, you know, helping me with the listing itself. So reviewing the listing, you know, is my evaluation far off? Is it close to what, what it should be listed as? Helping with the right figure was amazing with the. The wording in the actual listing, you know, what. How it should be structured, really just assisting with getting the, you know, the slide decks together, the resources together. It was a very, very consultative process, which I really enjoy with Kai, and then moving into sort of the process of talking to buyers, having that weekly call of just communicating, chatting through situations, what's going to be best for the company, what's going to be best for me, and then ultimately the buyer as well, you know, so it was really a great having a partner in the process. That was amazing. I don't have a business partner. I'm solo. I'm a solo founder. So, you know, when selling, having someone with experience and having done it before was incredibly valuable.

Awesome. Tell me about, you know, you signed LOI and then you move into due diligence. How. How was that process as opposed to your expectations? Was it a really smooth process with the buyer that you sold your business to? Was it much more bumpy and longer than you expected? Tell me about that.

It was a. A smooth process from the perspective of, you know, getting the LOI done. Going into the negotiation phases, I had a complicated sort of deal in that I had three different entities in the mix, so that. That really made it complex. So from LOI, through due diligence, that took much longer than I thought it would. So that. That took a lot longer, but it was a very complicated deal at the end of the day.

Gotcha. We're glad you. You survived through due diligence. Was there any hiccups at all during the process or maybe things that you wish you knew before you went into the acquisition journey?

I think so. When you say going into the acquisition journey, do you mean before even contacting Acquire, or is this post otherwise?

It can be either. Maybe you wish, you know, you knew due diligence would require certain things, or maybe you wish you were more familiar with certain deal terms or something like that. You mentioned three entities. Maybe wish you only had one or something like that. It could be anything.

Yeah, yeah, that is. That is the answer. Um, I think having three different entities, and they were for good reason in terms of handling international clients, you know, payment systems, trademarks, that those sort of things were necessary. Although if I had to do it again, I would keep it far more simple and just stick to one entity for the deal and not in different countries, which also complicated the deal as well at an entity in the US entity in the UK entity in South Africa. 4. Yeah. So that, that was, I will not do that again. It created a lot of legal sort of delays in terms of due diligence because it was basically three companies that needed to be assessed and it was, was two asset purchases. Those were okay, those were a lot quicker. And then the one share purchase, which, which took a lot of time because they were effectively acquiring the entire company rather than just its assets.

Gotcha. Tell me this, if you could go back in time and give yourself, or maybe another founder asked you, you know, your top three tips for, you know, getting acquired, what do you think those would be?

I'm also speaking to myself now. Should I do it again? Now that I'm thinking about it, I would say start with end in mind. So I think when I started the business I didn't really have this end goal. It was just to kind of earn an income, get out of my full time job. There wasn't an end goal. So if, if you're going to start a business, I would definitely say reverse engineer the process. I've, I'm fortunate enough to have been acquired now and I've gone through the process now I know what to plan for, you know, which documents should be paid, prepared, what in advance, what to keep tidy, keep the books tidy, keep everything neat so that you can be more attractive to a buyer. I think when you have a complicated business from a, from a legal standpoint or from just, you know, not well documented, it can take, it's a little bit less attractive from that perspective. So starting with the end in mind and preparing for it early, even if in my opinion you're not intending to sell anytime soon. But just when I've started preparing to sell, I found that I've started putting in more systems into the business to start to remove myself from the business, which is always a healthy thing for scale. So I would definitely say that. And then in terms of other tips for being acquired, I, I would definitely say think of the buyer as well in the process. So, you know, you're selling your business to them. How do you make that attractive to them? Not just from a, from a tidiness standpoint, but you know, are you handing over a burden or are you handing over like a money maker? You know, you've got to prepare for, for either or. So I've seen some, you know, acquirers speak about buying full time jobs. So you don't want to hand over a full time job to them. You want to make sure that the systems are in place so that it doesn't feel like a burden once acquired.

That. Yeah, that's great advice. 100%. I always say, you know, as your business a liability or is it an asset? Meaning when someone buys it, you know, are they going to have to fix a bunch of things or are they going to be able to understand how it works and can they run the business without being involved in the day to day? Those two businesses will get drastically different valuations and really one will sell and one just won't. So that is amazing advice. 100%. I agree with that.

Yeah. That it's a. I definitely am grateful for the amount of resources on acquire.com in terms of, you know, these are the things to expect, doing due diligence, these are the things to expect during your listing, et cetera. And it's much easier to then prepare for the sale once you know, what. What's to be expected. So thanks to you guys for that.

Right on. Well, again, huge congrats on the acquisition. I'm glad everything, you know, went smoothly, I guess. You know, what's. What's next for you, Ian?

Yeah. So I'm still going to be an advisor to the company that acquired Pluto, which I'm really excited about. It's in a really great space in the AI space. So we. What was really amazing about the acquisition. So the Inquirers and they're okay with me sharing this. So it's Pete and they essentially create AI content in. In learning. So whole reason for the acquisition was to acquire Pluto. So I'm still going to be working on an advisory role to make sure the systems integrate, et cetera, at least until the end of the year. And I'm an entrepreneur by heart, so I will be looking to start something while keeping it a little bit more simple next time around.

Right on. Well, I'm rooted for you, Ian. If people want to learn more about your story and find you online, where can they find you?

Uh, definitely reached out to me on LinkedIn. Um, so it's Ian Farie. I A N F O U R I E. You can connect me with me there, send me a direct message and yeah, would love to chat.

All right, well, hopefully I can bring you back on the podcast for another time if you ever sell another business with us.

Absolutely, absolutely. And appreciate everything.

All right, cheers, Ian.

Cool, thanks, Andrew.