Broker vs. Marketplace: What works for you when buying or selling an Online Business

What's up, everybody? Thanks so much for taking the time to join us today. Super excited for this webinar. We're going to be talking about the differences between brokers and marketplaces and go over the options you have when you're looking to sell your business and talk about how Acquire is different at the same time. With me today, I have a fellow colleague, Ranier. How you doing?

What's up, everyone? How you guys doing? I'm doing good.

Ranier's closed a ton of deals, so he brings a ton of experience experience, I think this is going to be a really good webinar. Renier, you want to go ahead and just get started? What do you think?

Sure, let's do it. Let's kick it off. All right.

Like I just said, this is the broker versus marketplace webinar. What works for you when buying or selling an online marketplace, plus how Acquire.com's marketplace differs. And for those of you that may not know me, my name is Andrew Gazdecki. I am the founder and CEO at Acquire.com. Previously to Acquire.com, I built and sold a couple different companies. The most notable company, a company called Business Apps. I grew that to about $10 million in recurring revenue before being acquired by a private equity firm. And just going through that process, the difficulties of selling your business, not knowing, uh, the steps that you need to take, how to prepare in advance, how to even get ahold of great buyers. I figured it'd be great to really build something that helps founders, and Acquire.com was born from that idea. And Acquire.com It's been in business about 5 years. We facilitated over $1 billion in acquisitions and we're growing every single day. Tons of activity on both the buy side and the sell side. Every day we get to do what we love to do, which is help founders get acquired. Ranier, you want to introduce yourself real quick?

Sure. What's up, everyone? My name is Ranier. I'm an M&A advisor here at Acquire.com. I've been making deals for over 12 years now. Acquisitions, capital markets, investment sales. I've been at a few different brokerages. So in terms of knowing what the ins and outs are of a national brokerage, international brokerage, and a lot of even boutique brokerages, I know how they work. And so I'm happy to give a little bit of my experience of the difference between the different models today.

So in more detail, what we're going to cover today, we're going to go over the M&A ecosystem. There's a lot of different players from advisors to investment banks to marketplaces, and we're going to talk about how all that fits together and really what the pros and cons are. And after that, we're going to talk about more specifically what is a broker, the business model, the cost, the process, the trade-offs. Then we'll move into marketplaces, how platform-based selling works. Again, the pros and the cons. Then we'll talk about our marketplace versus other marketplaces and what makes us different. And then where acquire fits. And lastly, we'll talk about evaluating your options because again, as a founder, you do have a lot of different options when going to sell your business. And at the end, if you have any questions, feel free to type them into chat. We'd be happy to answer those at the end. And with that, I'll hand it over to you, Ranier.

Perfect. So here's a little overview of the M&A ecosystem. So most founders don't realize that there's different options. So choosing the wrong one can cost you time, money, and even the deal. So on one side of the spectrum, you've got a pure marketplace, an online marketplace. On the other side, you've got a full-service broker. Traditional brokerage. And in the middle, you've got the acquire model. It's a hybrid where you get the features and benefits and the best of both worlds. So just to give you a quick little rundown, pure marketplace, just to give you a, a quick rundown, self-service listing environment, broad buyer access, minimal, uh, handholding, and it works best for straightforward smaller deals. And again, going to the other side of the spectrum, high-touch relationship-driven Traditional broker process, typically longer process, higher commissions. And again, to bring it to the middle, the Acquire model, you've got the best of both worlds where you got the platform reach, access to 500,000+ buyers in our proprietary database. You've got our Guided by Acquire eligible sellers, access to our M&A experts, legal team, due diligence support, and our fees, a smaller listing fee than a traditional broker. But we provide as much value from the best of an online marketplace and as well as the features and benefits of the traditional brokerage. Anything to add there, Andrew?

No, I'll go into it in a little bit, but I think just pointing out just the, the main pros of both. With the marketplace model, you gain access to just such a large buyer network. And then with a full-service brokerage or an investment bank or an advisory, you really get that full hands-on support. And one of the things we do at Acquire is we combine both of those. So we have the largest network of online buyers in the world, and we provide that, or we combine that with the best support, the best advisory, because I think both are important. But again, both come with pros and cons, and we'll go into that in a little bit more detail.

Cool. So in this next slide, what is a business broker? So by definition, a business broker is an intermediary who manages the entire sale process on your behalf, from valuation to marketing to buyer outreach, negotiation, getting to the finish line at closing. Typically, this is a much higher commission and paid at close. So the process there in terms of pros, you've got full service, hands-off process for the seller, negotiation, deal structuring, pre-qualified buyer relationships because these brokers have their own Rolodex. Typically siloed. There's different brokers at each company and they have their own network with each person. And this typically works for these higher complex, high-value deals, and they handle the legal due diligence. But on the downside, it's much higher fees. Typically 10 to 15% of these deals in terms of total deal consideration. Doesn't matter if it's an earnout, different types of structures, you're paying 10 to 15% of the deal consideration. There's oftentimes a monthly retainer as well as a, a listing retainer fees upfront. There's a limited buyer pool because each broker is siloed with their own separate Rolodexes. And there's a longer timeline, much like 12 to 18 months is a typical deal process with a traditional broker. And it's inconsistent in terms of the broker experience because some brokers may have several years in the business. Dozens of deals that they've completed, and some brokers are just getting started with maybe a limited amount of deals that they've seen and transacted with.

I would point out mostly around the inconsistent quality across brokers, because as you know, there's some really great brokers that are very knowledgeable in your industry. They know all the buyers, and then there's going to be a lot that have no experience in the industry and haven't done any familiar deals in that market. So I think if you're looking at a business broker, one of the most important things is going to be really finding someone who has specifically done deals in industry, whether that's SaaS or agencies or e-commerce. Even going deeper than that, if you're SaaS and it's a developer tool, they know that space, they know the buyers in that space. To me, that, that's what's going to be the difference between everything when looking at business brokers.

That's right. And if I could just add one last thing as well.

Yeah.

I've, I've seen clients come to us and they say, hey, I tried to list at this other brokerage. They mostly do laundromats, car wash, brick and mortar, and they try to sell our SaaS business or online type of business. You want to make sure that your, whoever you work with specializes in your specific business model because a brick and mortar business versus let's say a SaaS or e-commerce or an agency, That's totally different. And so you want to make sure whoever you're working with is a specialist there.

100% agree. So moving on to what is an online business marketplace? By definition, an online marketplace is a platform where buyers and sellers can connect to buy and sell digital businesses. And the way it works is it's typically pretty simple. You create a listing, buyers can browse, they can sign NDAs, reach out to you directly. And then the big part here is that's where the negotiations happen and the responsibility is almost always going to fall on the seller. And the big downside of this part is you may get access to a large pool of buyers. There may be a transparent process in place. It may be even cheaper than a broker, but most founders have never sold a business before. And given this is going to be one of the largest and most important transactions in your life, that can be a really big downside. So typically no advisory. You're entirely on your own. You're going to create your listing when buyers reach out. You're going to need to figure out how do you negotiate the best terms? Are you getting a fair deal? Can you trust this buyer as you move into due diligence, really wondering on your own if you're doing everything correctly and if there's any ways this deal could fall apart? Other things too that are potential downsides in online marketplaces is pricing errors. They can be very common where a founder will overprice. Their business and they will go to market and because they overpriced, they won't get any interest. And they'll be back at square one wondering why the transaction hasn't moved forward. But the biggest benefit of an online business marketplace by far is going to be the size of the buyer network. You're going to have wide access to pretty much every buyer in the world that's going to be interested in acquiring businesses. It could be private equity firms, strategic buyers, individual buyers, executives at tech companies. It could be roll-up firms. The list is extremely large, and that's going to be the biggest pro to using a marketplace. But again, you're going to be on your own to really figure out who's the buyers you should be focusing on. And when it comes to closing the deal, you're entirely on your own. Ranier, anything you want to add to this slide?

No, I think that was fully covered.

So touching on our marketplace versus other marketplaces, not all marketplaces are the same. What makes Squire different? So again, other marketplaces, you're generally going to go through a process of listing and hoping buyers find you organically. Uh, it's entirely self-serve, and this is where things can really fall apart if you've never sold a business before. They're typically really good for smaller deals, so if it's you know, say under $50,000, I think an online marketplace is really the way to go. But as you get into the six-figure and seven-figure transactions, you really do want that support because the most important part of everything that we're doing here is making sure that the deal closes. So some things we do at Acquire is we optimize listings, we help with offer negotiation. We have 50,000 registered buyers across 85 countries. Uh, we do cover the escrow fee under the Guided Buy Acquire program, but the big ones is absolutely going to be the dedicated advisor, uh, to help with negotiations, to help with preparation, to help with valuations, to help with closing. And all of this is in place to really help ensure that founders are successful when they go to sell your business, because it's really draining as a founder when you say list on a marketplace, you get a lot of interest from buyers. A bunch reach out, sign NDAs, you feel like things are going well, but then something falls apart at a certain point and you're really not sure what happened. Was it the business? Was it the pricing? Was the lack of preparation? Was it how the initial calls went? There can be so many different things that happen during an acquisition that you really want that live feedback from an expert who's been there and done that. Going back to the main feedback I have on just general business brokers, you always want to work with a business broker that has experience selling the specific type of business that you have, who's really been there and done that. And the exact same goes for online marketplaces where you really want to be with a company that has experience specifically selling the type of business you're looking to sell and will help you along the way to help you avoid really costly mistakes. And really just touching on specifically what we do at Acquire, this is all, all the things that we do at Acquire without you having to pay a single dollar. So a lot of other firms and marketplaces will charge you upfront from a listing fee to retainer, and we'll go through your evaluation entirely free. We'll give you a free listing score where we go through your listing, give you feedback on what to improve. We'll put together deal docs. We have a letter of intent builder and asset purchase agreement builder, which can really bring the cost down of the acquisition depending on the size. And these tools are extremely important when the deal size is, say, around the six-figure mark, because legal bills can quickly add up. We help put together a data room. We include escrow entirely free. And again, 24/7 support, real people, advisors who have been there like Ranier, closed tons of different deals at different sizes in different areas and different businesses. And I think that's the main, main difference here is just the amount of work that Acquire does upfront before you have to pay a cent. And we do this because we really want to align ourselves and make sure that We as a company are only successful if the founders that we're working with are successful. Meaning if none of the founders we work with ultimately sell their business, we're not successful at all. And in some other business models and other, uh, firms and marketplaces, you'll see just so much of the cost put up front where they win either if the business is successful in sales or if it doesn't. And we really wanted to flip all that on its head by providing as much value up front as possible. And doing all the things upfront as possible that we believe are extremely important to help founders successfully sell their business. Ranir, anything you want to add on this one?

Yeah, that was great. I think just to emphasize, we're on the same team. We're incentivized to make sure you get the best price, best terms, and the smoothest transaction experience possible. And we give you all of this value to make sure that you achieve that while you have to run the business going through this process. So we try to make it as easy as simple as possible to make sure we get to the finish line together.

Yeah, I completely agree. Simple is huge as well because acquisitions, they can be complex, as I know you've seen. So we're always trying to think of ways to take things off founders' plates, streamline the process. And that really ties into this next slide about, you know, the acquire.com team. We're, we're built different and, you know, we build something different where It's not just a marketplace, it's a platform built by founders for founders. And we really are combining the best of both worlds, whether you're looking at online marketplaces or a specific business broker M&A firm. Uh, we give you the platform scale. So the true reach of a global marketplace with hundreds of thousands of buyers registered, uh, some details on the platform scale, 500,000 registered. Uh, we have a general newsletter that goes out to 450,000 individual buyers. And then we also create a targeted buyer list where we go more specific to buyers specifically interested in the type of business you're selling, whether that's e-commerce or SaaS or an agency. Uh, we optimize our listings to really maximize the exposure as much, as much as we can. Uh, we also do personal buyer outreach by our team. Again, really aligning everything that we possibly can in terms of what makes this successful, and that's helping founders sell their business. And typically the expectation can be 30 to 50 NDAs within the first week, and then many more after that as well. And then we combine all the platform scale with expert advisory and customer service support. So dedicated M&A expert advising you every step of the way through the deal, all the way to close, offer analysis, LOI broadcast, deal structuring. And to touch on these points, offer analysis can be just going over the deal with you. I remember when I sold my first business, I had no idea if I was receiving a fair deal or what the terms meant. And, you know, I had a friend that worked in investment banking, and I would reach out to him for feedback. And that was a huge help. But again, just not feeling alone during the process is going to be so critical. And other things we'll do is we broadcast LOIs, which means we'll go and notify other buyers for you, letting them know you received an offer, which makes the process a little more competitive, helping structure the best deal possible. Everything from due diligence templates to data room management, including escrow in the entire acquisition process, just giving you the simplest, most seamless process you possibly can when going to sell your business. But again, the, the key thing that we try to provide at Acquire is we want founders to be successful working with us. We want them to successfully sell their business. And so we've taken everything about this industry and we've combined it together to truly build the best solution we possibly can. Uh, R, anything you want to add on this one?

No, I think that was great.

Hand it over to you.

Perfect. So then you're probably asking now which path is right for you. So if you're looking for a full-service broker, consider it if you want zero involvement, you want to hand it off completely, your business is $5 million plus with verified financials, your timeline is flexible— 6 months, 12 months, 18 months, possibly beyond. You've got a complex deal that's going to consist of earnouts, IP, legal nuances, all of that, and you're comfortable paying that 10 to 15% for that white glove service. And then if I can just skip over to the other side of the spectrum of a full service or self-service marketplace, consider that if you've sold businesses before, you've done deals, you've done deals before, you know the process, you have all these different templates. It's going to be a simple deal, clean books, sub-$100K asking price. Speed matters more than the support, and you want maximum exposure with these big buyer pools. You're comfortable handling the buyer communications, the DD yourself, all while you're running the business, going through this process. Now, again, in the middle, if you're considering the best of both worlds here at Acquire, you've got the marketplace with 24/7 support.. You want an expert advisor, CS team in your corner, not a solo do-it-yourself process. You want access to our database of 500,000+ verified buyers without paying these much higher broker fees. You want support from LOI to APA to escrow to close all the way to the finish line. And your deal doesn't need that $5 million+ 10 to 15% white glove pricing, but you're getting the best of both worlds. Andrew, would anything to add there?

No, I think, I think that's all great. One thing you said that really stood out to me was, you know, selling your business is a full-time job and a lot of founders already have the most demanding full-time job just running the business. So it's another huge thing to consider is do you have the time to manage a process where you need to learn what negotiation is and what do you have to do to prepare and always second-guessing if you're doing things correctly. If you want to really maximize the chances that you successfully sell your business, I would highly recommend, you know, really working with a team where you feel supported and you feel like you're going to get the help that you most likely will need as you go down this journey.

Awesome. So then next is our advisory spotlight. So if you're a SaaS or an agency with $100K+ ARR, profitable, The sellers that do qualify, we have our Guided by Acquire Done With You advisory layer, and it's not just the listing. We'll be there every step of the way. Before the launch, we'll help you with your due diligence checklist, P&L statements, intro video. We'll handle the pre-launch listing vetting, quality checks, launch day marketing blasts, targeted outreach, and then post-launch. Will help you in terms of the buyer inquiries, the negotiations, the timelines, monitoring the communications while we're handling all the different feedback with buyer conversations, doing a check on the different buyers that are reaching out to you, giving you our feedback on how different buyers have performed. We'll evaluate the offers with you. We'll explain different types of offer types, different offer structures, and importantly, in my opinion, is creating that competitive bidding environment to make sure that you get the best price, best terms, and smoothest transaction because you want to have multiple buyers making sure they give you their best offer in a timely manner. And with our Guided by Acquire program, it's typically done in a 12-week timeline. So from prep to launch to negotiating and close typically gets done in 12 weeks, sometimes faster. Sometimes a little bit longer depending how complex the deal is, but we're with you every step of the way. And again, if you're a SaaS or an agency with $100K+ ARR and profitable, you can qualify, potentially qualify for our Guided by Acquire program. Anything to add there, Andrew?

No, I think you crushed it. I love what you said about the multiple offers because as you know, that's like our main goal at Acquire is every business that we're working with We always aim to get multiple offers because that's how you get the best valuation and the best terms and just have the most leverage as you go into due diligence.

And then to go into more of our Guided by Acquire seller success program, every step of the way from evaluating buyers, due diligence, fielding offers, escrow and close to asset transfer, we're with you every step of the way. Explaining how the process works, making sure the momentum keeps moving forward, making sure there's a competitive bidding environment, and even helping with potentially backup buyers. Because Andrew Gazdecki, you and I know sometimes the first buyer doesn't win the deal and get to the finish line. Something's— sometimes something happens, the deal falls out, and we help you keep that relationship with backup buyers or other buyers just in case anything goes wrong to make sure you get to the finish line, whether it's with the first buyer or a backup buyer. While getting you that best price, best terms, best process. And how we do that is we attract the best buyers to compete on your deal, making sure your listing is optimized, making sure it's in front of the most amount of qualified buyers, getting you the best deal structured and securing that offer while also educating and explaining how it works, how the process works, what type of offer structures there are, what different language there is in terms of the offer structure, whether it's an earnout or a holdback, et cetera, because you're going to have access to our entire team of M&A experts, legal, CS, 24/7. We're with you every step of the way to make sure you have that process in a timely fashion, make sure you have a good process. And so we're there with you. We're incentivized with you on the same team. And we'll provide all this value to make sure you have a good experience with your acquisition. Andrew, anything else to add there?

I really like the comment you had about backup buyers because as you know, we've had many situations where for one reason or another, the first buyer can't move forward. And because the cap relations good with the other interested buyers, the deal was able to successfully close. It's just a reminder of just how important even the smallest details can be in an acquisition. For example, if you sign an LOI with one buyer, completely ignore every other interested buyer, and something happens, you don't really have anywhere to go from there. Instead, you know, we'll, we'll handle things in a way where we let buyers know where if there's, you know, something happens with this first buyer here, we'll let them know and give them another opportunity. And just like those little details can literally be the difference between a deal closing and not closing. I've seen you do it so many different times. It's a great point there.

Awesome. So there are two ways to sell on Acquire, and both give you access to our database of 500,000+ buyers located internationally. So the general marketplace, it's self-serve, any business type, all price ranges. What that comes with is you can list and manage your own listing. You've got 24/7 support, light advisor support. Buyers find you through our marketplace, through the search and the newsletter. You respond to the buyers, vet them, negotiate, and you'll have full access to all of our deal tools, all the value that we showed in our previous slides, all the different templates, process, education videos. And it's good for experienced sellers who know the process, who've maybe done a deal before, multiple deals before., and there's no minimum. Again, it's self-serve, any business type, any price range, SaaS, e-com, content websites, agency, you name it. Our general marketplace is there for you. And if you qualify for our other program, the Guided by Acquire program, it's advisory-led primarily for SaaS and agencies with $100K+ ARR profitable businesses. And what that comes with is dedicated M&A advisor assigned to your deal from day one. You've got our targeted newsletter to 50,000 to 80,000 qualified buyers on day 1 of the launch. Personal buyer outreaches. We'll find the buyers. We're not just waiting for them. We're there contacting our proprietary list as well as our 500,000+ list of our platform. Buyer scoring, vetting scripts, offer analysis. Again, we'll walk you through each offer, different deal structures. We'll explain every step of the way to you so you know what you're getting into. And again, the LOI and APA review, make sure all the transaction documents are good to go. We'll cover the escrow fee. And typically with our guide to buy-acquire program, we've seen 400% plus more interest versus no guidance. And so again, if you qualify for a guide to buy-acquire program, we'll take it to the next step and help you get, again, best price, best terms, smoothest transaction. But either way, we're here to help you. 24/7 access to our team and support. And Andrew, anything else you'd like to add there?

That was great. I think the only thing I'd point out is, you know, a lot of times with, you know, additional fees, working with someone who's really been there, done that, it almost pays for itself through the additional price you'll capture for your business or just successfully selling your business at all. Uh, you know, you just listed out like 20 different things that we do when we're helping founders and all of it together, you know, adds up and makes the sale process successful. Uh, that was great. All right. So moving on to who we help at Acquire, we work with all legitimate digital online businesses. Our sweet spot is definitely going to be SaaS, software as a service. A strong fit would be between $100,000 to $10 million in recurring revenue. Profitable or near profitable, and sticky product, documented operations. And the reason we say profitable so much is mainly a lot of the buyers that we're looking— that we're working with are looking to acquire profitable businesses. So if you have a SaaS business and it's near profitable or if it's not profitable, my best recommendation is to work on profitability because your— the chances of being successful in selling your business just go up dramatically. When the business is profitable and your valuation increases as well. We also work with agencies over $100,000 in recurring revenue, recurring retainer revenue. These businesses do really, really well when working with us. We have thousands of different buyers interested in agencies today looking for things like documented SOPs, clear contracts, team in place, post-sale. These are all things that our buyers are looking for, and our job at Acquire is to communicate that to the founders that we work with. So based on the size and the profitability, uh, the items in terms of preparation, such as documented, uh, processes. All that is very, very important. Um, we also help with e-commerce, other marketplaces, other platforms, other newsletters, mobile apps, AI dev tools, affiliate and content sites. Our buyer network is, is so large that we, uh, look to help any type of online business where we can connect the buyers we work with, with founders that have built these amazing businesses. Um, so if you're working on selling potential SaaS or an agency, definitely reach out. We'd love to, to take a look, tell you what the business could potentially sell for. Um, but also e-commerce founders, marketplace founders, newsletter, mobile apps, dev tools, affiliate content sites. And just by the numbers, again, 500,000 buyers on the acquire.com platform today. We facilitated over a billion in transactions to date. We've done over 2,000 successful acquisitions with comes out to around 1 to 3 acquisitions per day. Uh, around a 60 to 90-day average day from list to close is, uh, what you can expect when you go to sell your business. Every seller is identity verified before the listing goes live. Uh, financial metrics can be connected directly, uh, to really give a true view into the financial health of the business. And everything is NDA-gated across access, which means you're only talking with Uh, serious sellers. And if you are a founder, um, buyers do have to sign an NDA to view any of your content or acquisition materials. And the Guided by Acquire team is available for deals over $100,000 in annual recurring revenue. So again, all legitimate digital businesses, welcome. We're happy to help. Our goal as a company is to help as many founders get acquired as we possibly can. 500,000 registered buyers and no retainer, free tools and 24/7 support. We only win when you win. Really, the Acquire business is built around ensuring that founders are successful. And if we do that really, really well, then we'll be successful as a company. And if you're still not sure if Acquire is right for you, definitely feel free to reach out. We can help you understand what your business could potentially sell for. Uh, we do free valuations all the time. We get back to you really, really quickly and zero upfront costs. The only cost is 68%. Depending on the size of your business and only if we're successful in helping you sell your company. Hope you enjoyed that. We'll move over to Q&A and Ranir, thanks again for going through all that. That was great.

Yeah, happy to be here.

Right on. So let's do, let's grab some questions from the audience. I'll kick over the first one to you.

Cool.

How do I know whether I need hands-on support Or if I can manage the sale myself.

That's a good one. Again, it really depends on your personal experience. If you've done deals before, you know, whether it's one deal or several deals, you already know the process. But if you haven't, that's when you're going to need some help because again, these transactions, you know, that's a difference of tens of thousands of dollars of trying to do it yourself. Not, not just the dollar amount, but the time. If you go through this process and you don't do a deal successfully because you haven't been through the process, it's very demoralizing whenever a deal falls out, or if you're talking with buyers that aren't serious, that aren't qualified. There's just a lot of value with working with someone that's done the deals. I, an analogy that I think of, it's, it's like playing chess. It's like every game is different, just like every deal is different. And let's say you're a first-time buyer or a first-time seller, or let's say you've only done one deal maybe a long time ago, and let's say the buyer is very experienced. There's going to be a lot, there's going to be a lot of friction because again, there's tens of thousands, hundreds of thousands of dollars on the line of working with someone that can provide the value to make sure that they've seen it all. We know where the pitfalls are. We know how buyers negotiate. We know what the typical deal structures are. There's just a lot of value in working with someone that's seen it before, done it before. And so my recommendation, if it's a big enough deal and there's lot of money on the line and you're busy and there's a lot of time that you can save, work with someone that's done it before, that does it all the time. And that's, that's my recommendation. What about you, Andrew?

That was great. I don't know if I would add anything to that. I think, again, the goal is to be successful when you sell your business and you want to do everything you can to maximize those odds. And obviously working with someone, um, they can point out the pitfalls, which can seem really obvious to us and really common. But when you've never gone through the process, you know, just avoiding really anything can, you know, be the difference between not selling or selling at all. All right. Next question. What parts of selling a business are the hardest to handle without an advisor? I'll take this one just to kind of piggyback off the last question. But kind of all of it. I think all of it combined from the preparation like what docs do you prepare? What format do buyers want to see financials in? What are common mistakes that you should be avoiding as a founder? What are some valuation mistakes? And then as you get into negotiations, you know, how do you negotiate the best terms, the best valuation? How do you move through due diligence? Common reasons that deals fall apart. There's a lot. There's quite a bit. That's why You know, people make careers around selling businesses, uh, because there's just so much to the process. And if you make any, you know, little or big mistakes, they can all, uh, you know, derail the deal and make it unsuccessful. And I think the best way to think about this is, you know, you can absolutely sell your business without an advisor or, you know, investment bank or business broker, or even a marketplace. Like you could 100%. Do it. But, you know, if the goal is to really maximize the odds that you successfully sell your business and your goal is to also maximize your outcome, meaning the amount at which you sell for, it's just a no-brainer. There's really, there's more downside to not working with an advisor than to work with an advisor. And the downside being you get a terrible deal, you agree to terms that you don't fully understand., you know, you sell your business for a low valuation, whatever it may be, uh, you will maximize, uh, your odds of success, um, by working with an advisor. All right, Ranier, next question for you. How do I know if my valuation is realistic before taking my business to market?

Yeah, valuation is, is a common question, and that's a great question. When it comes to valuations, it's really a combination of a science and an art. At the end of the day, the valuation of your business is what a buyer is willing to pay for it. So you can get a comparison, you can look at comps, comparison of different deals that have sold that are similar to yours. You can look at evaluation by a financial methodology, replacement cost methodology. There's different ways to value your business, But the key here is working with someone that knows where the market is at. They have a good pulse on where the market is at, what buyers are looking for, what multiples buyers are paying for today, what type of deal structures are closing today, what type of— really, it's just increasing your probability of close. At the end of the day, you want your valuation to increase your probability of close, get you the best financial outcome, whether Cash upfront is important to you, or the overall deal consideration is more important to you. You just need to know what is your goal. If you want ca— more cash upfront, or you'd rather have a higher dollar amount, you're open to staying longer, you're open to creative deal structures. Again, it's a combination of a science and an art. And the good thing with us is we've seen all different types of deal structures. We know what buyers are looking for, what's selling today. And really just getting a realistic valuation because it's really not worth your time and energy to list something that's not going to sell. Or even worse, someone telling you to list at this number because they saw some news headline of this crazy multiple. At the end of the day, you want to make sure you increase your probability of sale to get you the best outcome.

That was great. I agree. I think the one thing I would, I would, you know, double down on is, you know, really talking with people who have done deals in that specific market segment recently. Because like you said, there's headlines, there's different reports, but you know, what is that really based off? Is it of actual deals closing or is it just, you know, some formula or something like that? So the closer you can get to— because you can get your valuation based on transactions that are really happening, I think the better. All right, next question. I'll take this one. What do buyers care about that founders often underestimate? Hmm. I think the first thing that comes to mind on this would be preparation. You know, as founders, the last thing you're thinking about is how clean is your P&L? What should you have in your data room? You know, what are common questions I know buyers are going to ask? You know, how can I prepare these materials in advance? It doesn't seem that important. But as buyers who are looking to acquire businesses where they're looking at sometimes a dozen businesses per day, not having these materials put together can be completely devastating. It's a reflection into how they may perceive the business. Is it organized or unorganized? Is this an acquisition I should be taking seriously? Because I'm not sure the founder is taking the process seriously. So I think that would probably be the main one for me. And when you're— anything you would add to that?

Yeah. At the end of the day, we'll prepare you for all these things. We know exactly what buyers are looking for, what they're going to ask you, what kind of finance, what they're looking for in your financials, how they're going to ask questions about your financials. If there's different dips or something that happened in the past, we'll prepare you for all of this. And again, there's a lot of things that most people will just not think about, but we've seen it all. So at the end of the day, we're going to prepare you for all of this.

Okay, here's some quick ones. Does your system allow integration with Xero accounting software? Yes, it does. What percentage of your buyers are US-based? And if you could advise, what percentage is in the UK? Off the top of my head, I believe around 50% is in the United States. So the, the majority of our buyers are in the United States. Other 50% are going to be international. In terms of the percentage in the UK, off the top of my hat, off the top of my head, I'm going to say 10, 12%. Can you advertise the business's offers invited instead of listing a price? Under certain conditions, generally we always recommend it's best to go out to market with a specific price in mind. There have been situations where we'll have something called open offers. But generally, we want to put a price on the business. It creates less confusion with buyers and will ultimately be a better process. But under certain circumstances, we can do otherwise. All right. That was like rapid fire. I'll get this next one to you, Rene.

Cool.

What should I have ready before I start talking to potential buyers?

What should you have ready? First, you should be committed to the sales process, and from there you should have all your financials documented, make sure it's clean, SOPs in place, all the documentation of your business, how it works. Make sure you've rehearsed and you completely understand what the buyer is going to ask. They're going to ask you, why did you start the business? How do you get new customers? What happened here in this dip in your financials? If you were the buyer, what would you focus on? Just make sure that you're fully committed to the process, you know, and rehearse all the questions that the buyer is going to ask you and be able to put yourself in the buyer's shoes. What are they looking for? Is my multiple, my asking price realistic in today's market? What is important to me in terms of cash upfront versus deal structure, overall consideration of price? You just want to make sure all of your ducks are in a row. And this is not to just make more work for you, but it's really to help you get the best price and best terms. So just make sure you're fully committed to the process, have your ducks in a row. That's my advice for that question. Anything to add there?

I would say clean financials. I know we've touched on that, but without clean financials, in my opinion, I think it's just really hard to get deal momentum going. That would be the one thing I would point out. But I love being committed to the process. I think buyers can really sense that really far away. And, you know, that can also really dramatically reduce interest. So 100%. All right. Last question. What changes once buyers start showing interest if I have an advisor involved? I think the biggest thing, like one specific thing that we like to do at Acquire is let's say you receive multiple different offers, we'll reach out to each of those buyers to get a better understanding of the probability of close, meaning you can have an offer from private equity firm, strategic buyer, and let's say 2 individual buyers. And off the top of your head, you might think the PE firm and the strategic may be the highest probability of close, but we'll talk to the other buyers as well and ask what cash you have on hand, can you finance acquisition? What is your experience with acquisitions? Do you have an outline of what due diligence can look like? So we can just really get an understanding of once you sign the LOI, what's going to happen after that? What can we expect? And it may be the most obvious answer or it may not. And sometimes the, the amount in each offer can vary differently. So you don't always want to go with the highest offer. You want to go with the one that has the highest chance of closing. So we help figure out stuff like that, those little details that really makes an acquisition successful. Ranier, anything you want to add?

Yeah, just to piggyback on that, maybe one buyer hasn't closed a deal with us or hasn't closed a deal at all, but is offering a much higher price versus someone that we know has done multiple deals, has done multiple deals successfully with us, has cash on hand, We're going to give you the pros and cons of the different buyers, the different offer structures. That's all really important. There's so much details besides price. And so, you know, most people gravitate towards higher price, but there's so much details. And again, at the end of the day, probability of close is what we're focused on.

Agreed. All right. We got one more question. If a seller accepts an offer, but the deal later falls through during due diligence or before closing, does Acquire offer a structured pause and relaunch program? For example, can the founder temporarily take the business off the market, address the issues that caused the deal to fail, improve the company's performance, and then return to the marketplace with support on repositioning, valuation, and buyer outreach? Absolutely. We have, we've done this many different times. I think the first thing we'd like to do in this specific scenario is we'd like to see if there's any other interested buyers., without going back to market or, or without taking the business off market. Um, and that's typically done by accepting an offer, letting other interested buyers know that if anything happens, we'll be sure to reach out. So there's some expectation that the deal is still in play. Um, but if that's not the case, absolutely. Again, we're aligned with founder success and we'll do everything we possibly can to ensure that founders are successful working with us. Um, so we are huge on feedback. Sometimes we'll go to market and the price is too high, and we'll go back to founders and let them know that this is clear feedback from buyers. Uh, let's pause right here, implement the feedback, go back to market. Uh, if it's a, a other area of feedback, we'll absolutely implement that, because this is what you need to do during an acquisition process, um, is apply feedback quickly, uh, go back to market, reposition based on the feedback you've heard or the things that buyers love or the things buyers don't love. It's a great question. Ranier, anything you want to add on that one?

If I can just add one thing, it really comes down to your opportunity cost when you're going through this process. And let's say you sign an LOI with a buyer, you've already spent weeks, sometimes months on the process. If it falls out, and sometimes deals do fall out, that's the reality of the business. What we've done and what we help you do is we'll help make sure that you have a good communication with the backup buyers so that they could step in, take the deal from there, and then close. The good thing with having multiple buyers is that there's a sense of urgency and that if that second-place buyer finds out that the first-place buyer fell out of the deal, they can come in there, close the deal. But if there's maybe a decision to be made to maybe work on the business and maybe relist down the road, we've also done deals like that. It really comes down to What's important to you in terms of your timing versus the offers at hand. It's really just knowing your goals and priorities and we'll help you from there.

I agree. Well said. All right. Well, that concludes this month's webinar. I hope everyone enjoyed the content. Me and Ranier love talking deals and helping founders. So again, if you are looking to sell a business and you're just curious about our process or what you could potentially sell for, reach out to us at acquire.com and we'd be happy to help. Thanks for joining. Appreciate it. Thank you, guys. See you, buddy.