How to Sell Your Startup in 2025: M&A Strategies from Acquire Live

This is the exit playbook. And this is, you know, how everyone wins in acquisitions. And this is a big reason why I started this company. I think acquisitions is a great way to become an entrepreneur, to get into a business that you may not have otherwise started on your own, or if you have a great business, to unlock liquidity and obtain some freedom to move on to something new. So to kick things off, for those of you that don't know me, my name is Andrew Gazdecki. I been an entrepreneur my whole career. I've had one job for about a year that was about it. Other than that, early on, I just knew that building companies was something I really wanted to do. And so before acquire.com, i built a company called Business Apps in college. It was a drag and drop mobile app builder for small businesses. So I built a company around that. I saw the iPhone come out. No one knew how to develop mobile apps at the time. So I saw there was do it yourself website builders. I figured there should be do it yourself mobile app builders. So that company, I bootstrapped that to about 10 million in recurring revenue, is acquired by a private equity firm. That was one of the big moments for me in terms of really realizing that as entrepreneurs, we're not necessarily taught how to sell companies. It's kind of a mysterious black box. How many of you feel like you're very versed in acquisitions? Like, you know, like the back of your hand? Okay, there's a few of you. And that's the thing with acquisitions. When you think of, you know, books about entrepreneurship, there's hundreds of books on financing, marketing, sales, etc. And there's like, two books on acquisitions. So that was a big thing that I wanted to change with acquirers. Just educate entrepreneurs through the process. Because even going through the experience myself, from simple things like finding the buyer, it took years, and it's a headache. So I thought, you know, there has to be an easier way. And that's how acquire.com was born. Another part of my story, too. I don't. Has anybody heard of bank to the Future by chance? Anybody into cryptocurrencies? Who's into cryptocurrencies? As another question. Okay, all right, there's a few. This story is kind of interesting. So after Business Apps was acquired, I decided to start a crypto exchange for some reason. Don't ask me why. It turned out to be a terrible idea. I'll tell you the story. So we were developing a company that was essentially helping facilitate securities, which is a big. No, no, we didn't know it at the time. It was built on the Ethereum blockchain before cryptocurrencies were, were really deemed securities. So as we were building this, we thought it was going to be essentially a commodities trading platform. And then our largest competitor actually got fined by the sec. And I remember we had a moment where I said, oh shit, like, do we like cryptocurrencies that much? Do we want to go to jail over this? So we were just building software. We didn't know what this was going to be used for. The answer to that question was no. And so, long story short, we never launched the platform, flipped the company to essentially be a white label platform. The idea was we don't have the regulatory licenses to properly launch this. And so we were looking for a partner that could take our software, launch what we were trying to do, and then we'd potentially sell the business to them. And that's what we were able to do. Bank to the future had the proper regulatory licenses and that's who we sold the company to. But I think the story there is when I was building the company, it just, it didn't go as planned. You know, obviously I wanted it to be something completely different than what it ended up being, but there's moments where I just want to hit the eject button. I just wanted to find a buyer quickly. And we were lucky to find a buyer. So that's another example of where I just, I wish something like acquire.com existed. And so this, a big part of this company also is, you know, me, you know, scratching my own itch and building something that I wish I had through building these two companies here. So I'm going to be diving into just some good strategies. I hope you all just have takeaways, whether you're a buyer or seller, whether you're looking to acquire a startup, maybe you're looking to sell your business over the next year, whatever it may be. This is going to be just a high level overview of how I like to think of acquisitions. Because@acquire.com we try to break things down into a process that's just easy for everybody to understand. So this is the original process that I put together when I originally launched the company, when it was called Microacquire. Does anyone remember those days when it was called Microacquire? Okay, all right, who got the vintage socks that we had in the back? People pick those up. All right. We should have brought more of them. So this is an easy way to think of how we like to break down acquisitions. So first, obviously, you need to create buyer interest. That's going to be one of the most important things that you do during a process. On average, when we see people selling with acquire.com, you can expect 50 to 100 plus NDAs signed by buyers. This also comes in really, really quickly. And then after that, you know, you're going to want to put together a deal data room. Who knows what a data room is? Okay. All right, so we're going over some basics here. It's essentially a folder that outlines processes of your business, contains materials that you're going to want to buy or to review. So you essentially put that together, and then you're going to create a sales process timeline. This is where we're getting maybe a little bit more advanced. Who knows what a deal schedule is? Okay, all right, I know you do, Kai. Yeah, so we'll put that together. And then from there, you're managing acquisition conversations. And I think one of the most surprising things when a founder goes through this is just how important each of these steps can be and how critical it is in terms of the timeline. I think it's also important to have expectations set with both buyers and sellers in terms of what does this process look like. So this is a typical timeline that we see on acquire.com sometimes we see kind of, what's the fastest deal that you've seen? 14 days. Okay. What's the longest? Who's done an acquisition under 14 days? Tomer. Okay, does anyone have an acquisition story? Over a year. Over a year. Wow. Okay. So you know, this by no means is set in stone. It's not. It's basically a guide in terms of the averages that we see. But right off the bat, you're going to see preparation. That's where we're working with founders to prepare things like a confidential information memorandum. We're going to recast financials, then we're going to move to sale ready. That's where we're essentially going to go over how the conversations with buyers could go and how they should really approach those different calls. And then from there, day three to day 30, that's going to be conversations with buyers. That's where, you know, the sellers are getting to know different buyers, buyers, vice versa. Why are you looking to sell the business negotiations, day 30 to 60? Who's been a part of negotiations where maybe it went longer than this? Tomer. What's like the longest period of negotiations you've been in? I'm guessing days, probably about a month, two months. Okay. All right, so with negotiations, this is where deal structure is really going to be important. Is it all cash? Is there going to be an earn out? Is there some financing involved? Is there financing involved? These are, you know, questions you definitely want to ask when you're in negotiations. And then a 60 to 120, that's, you know, due diligence. That's who's gone through due diligence. Raise your hand if you thought it was a ton of fun. Yeah, probably Brian. Yeah, me and Brian went through due diligence at Business House. Good times. So that's where, you know, you're doing all that fun stuff. It's a necessary component of acquisitions. And then once you're through that, you know, you successfully acquired a business or you've been acquired. I love this quote here at the bottom. You can't, you can't make a good deal with a bad person. I think there's just a ton of truth in that. A lot of sellers I work with, right off the bat, I'll say, you know, how is your relationship with a buyer that you know, is interested, how are things going with them? And then also vice versa when we're talking to different buyers, like, how is the fit with the seller? You know, I think acquisitions, there's a huge component of trust, and if it's just not there, I think it's an uphill battle with acquisitions. So Warren Buffett, super smart guy. These are some example questions that we typically will run sellers through just to prepare. These are questions that I think come up on almost every acquisition call, at least a few of them or a handful of them. I've seen founders stumble over these questions, which is completely fine. But obviously in acquisitions, being prepared is so, so, so important. Kai, do you care if I continue to ask you questions right here? How would you. How important is preparation, in your opinion, to acquisitions?

It's really important. It's what expedite that timeline in terms of being efficient or being a year plus.

So, yeah, so these questions right here, just understanding what is your asking price? You know, when founders are like, I'm not sure, you know, Maybe it's either 10 million or 100,000. I don't know. I think, you know, and that actually happens, you know, just you give the vibe that you're just not really serious about selling your business or you're not realistic in terms of the asking price. What is your current true annual recurring avenue if numbers don't match? It's not going to, it's not going to be good for either party. Has anyone gone through due diligence with maybe a company that you're looking to buy, and then you find out the numbers don't add up or something like that? Has anybody gone through that? Did anybody continue with that deal based on that? To the hands just went down. So the point I'm trying to make is, you know, the more you can prepare to sell your business, the more you're going to have opportunities to not have deals fall out. I'm not going to read all these, but I think you all get an understanding of basically just how important this preparation is. And the more you're prepared as you go into the sale process, the better experience it's going to be for both sides. Who here has seen this image before? This is our deal schedule at Acquire. All right. Okay. So this one, I think when we apply structure to deals, it allows things to move at a timeline that I think works great for both buyers and sellers, meaning as a seller, without structure to the acquisition process, you can have offers come in kind of at any point. And when you have an offer come in at week one and then one at week eight or something like that, you don't really give yourself an opportunity to properly negotiate those offers. And then you also don't give buyers structure to go down in terms of. This is when you're expecting to have all your initial calls done by. This is when you expect indication of interest. This is when you want formal offers in by. So having structure to your acquisition process, I think benefits both buyers and sellers and gives momentum behind deals so you can ideally secure multiple offers. Does anybody have any questions about this slide? I know it's kind of the busier slide in my presentation. I just have a quick question for you.

Why does acquire sort of renew the sale that might be underway when an LOI is under author, rather than allowing some sort of, you know, bidding opportunity to take place on the platform to get more people interested as opposed to taking it kind of off the market.

That's a. That's a really good question. Okay, so when someone accepts a letter of intent, why do we take that deal off market? The simple answer there is, for legal purposes. When you accept an loi, there's typically a clause called exclusivity. And that means the buyer who issued you the loi, they now have the legal right to exclusively work with you for a period typically between 30 to 60 days. And so we'll lock up the listing because of that term right there. You can negotiate non exclusivity, though, but the reason that most buyers will ask for exclusivity is they're putting time into the acquisition, they're going to be potentially putting in resources and they don't want to know that you're shopping the deal behind their back if they're going to be putting in that time commitment. That answer your question?

Yeah, it does. I mean ours in Avid exclusively clawed in it. And so I was hopeful to continue to get those who were somewhat interested in be more interesting because now others are interested and potentially allow it to increase the price. But yesterday you thought that I'm skinning for.

Yeah. Since there's a lot of buyers in here, I don't know how many tips I can share on the sell side. But no jokes aside, one cool feature we have on Acquirer is when you receive a letter of intent as a seller, all buyers are notified. And every buyer knows. And every seller knows is when you're in an acquisition process, when you can leverage an offer to receive other offers, that creates just so much momentum. So that's the opportunity to do it is before you accept the offer, you can go back to every buyer and say, hey, I just received an offer. Would you be able to increase your price or your terms? Or maybe they haven't submitted an offer and all you can say, are you thinking about submitting an offer? I'm thinking about, you know, accepting this offer. Kai, I'm going to keep calling on you. You're right here in front. Do you want to tell everybody who you are and what you do to acquire?

Hello, everyone, my name is Kai. I'm the lead advisor at Acquire. Some of you I've seen before. So it's good to see everyone here. What I do is I help sellers basically facilitate their deal. So questions like this, when to use a deal schedule, how to leverage competition ethically. And so to answer this question here, when you get an offer, as Andrew said, buyers get notified. There is a finite window to where the buyer is going to feel that you're dragging out the deal. And then there is a natural part.