Look For This When Acquiring Startups, It Could Triple the Resale

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I'm here with Tomer, who recently had Seamless acquired. See Tomer. How you doing today?

I'm doing good. I'm doing good.

This is going to be a different podcast than we usually do, given that you acquired seamless on acquire.com and then.

Had it sold exactly a little bit less than three times, but something like that. Yeah.

That is incredible. Where do you want to start? Do you want us? My first question is, you know, how'd you buy it? How'd you find it? What made you want to acquire Seamless?

Yeah, so to answer that, I have to go back a little bit. I had a company a year and a half ago called ChatGPT. Plagiarism. It was one of the first tools that can detect plagiarism stemming from AI. So I kind of already came from that ed tech background. After I sold that company, um, while I was in the process of it, I met a lot of cool people who were, instead of starting startups from scratch, were acquiring them and growing them exponentially. So I kind of always had that in the back of my mind that this is something really cool that I could maybe do. As some time went on, I did a few other startups and I at one moment just decided to finally go for it and acquire a startup by myself, to kind of skip out on that phase of like, finding product market fit and just acquiring something that already has that. So Seamless for Science really caught my eye on Acquired because it was also an edtech tool, so something I was really familiar with. I knew the customers, I knew who the process. I. I knew how kind of how it worked. And it. It just seemed like a really great deal. There was a lot of different things I liked about it, and I just decided to really go for it. And I only did six days of due diligence because it was such a competitive listing. And then I just went for it and bought it.

Right on. I like that. Tell me, what did Seamus do? You know, background with the problem solve.

Yeah.

And EdTech customers.

So. Yeah. So Seamless for Science is a tool that can generate literature reviews using AI. That's kind of a great way to summarize it. A lot of my users were from overseas, particularly in Asia. It was designed to help students that are more in stem, science, technology, engineering, and math. And there were a lot of students from that part of the world in Asia that weren't that English wasn't their first language. So imagine being a STEM student with English being your first language. It's already challenging enough and then imagine not really being able to understand everything. So it really helped them out.

Gotcha. Okay, so you see the business on acquire.com you check it out. What stood out about Seamless to make you want to acquire? Was it there's no growth strategy stood up. Was it maybe one channel marking? Was it missing certain features? Like what, what, what made you say, like, hey, I can grow this business pretty quickly and it could be right.

So the, the biggest thing that really made me like that business, if I could just sum it up in, in one reason. There's a lot of different kind of minor reasons, but the major reason was that it had 20,000 free users and the app shut down a couple, for a couple days with the previous founders due to some technical issues. And they just got inundated with emails saying, I need this right now. Like, and the users were super active. So even though it wasn't making the most MRR in the world, I really saw that as something valuable. For me personally, I think a company that isn't making so much money, but its users are super active and if it shuts down for one day, people are freaking out. To me, that's more exciting than something that's making maybe a lot of MRR but the users aren't super active. Maybe they paid for it and forgot. So that really turned me onto the business.

Got it. Okay, so super strong product market fit a lot of happy free users. Did you do anything with the free users? Did you increase prices? Did you convert them into paid or was?

Yeah, so what, what I saw, like, I, I wanted. So first of all, Seamless for Science wasn't written, it wasn't coded in a, in a framework that I'm familiar with. So I knew a lot of this would have to be without adding any new features. And throughout the whole process from buying it to selling it, I didn't really add any new features. I changed the landing page a little bit. But besides from that, I saw that there were so many free users and just doing like simple math in my head, I knew that if I had forced them to pay, a certain percentage of them would convert to being paying users. Even if that's 1% of 20,000, if 1% of those people convert right away, that's a ton of MRR that's just added. So that's what I ended up doing. And over a couple days I added like two and a half thousand dollars of MRR with basically doing zero work, not coding any new features, not even changing the landing page, nothing at all. And Right away just got all that mrr. From then it was just increasing the conversion rate by adding some cool like landing page copywriting, adding some social validation, some social proofing, some reviews, all things that Seamless for Science didn't have. And that's really like there's a lot of deals on Acquire like this that are just super interesting. If you can just add these small tweaks, you can really get a lot of new revenue without really doing any, I don't want to say not hard work, but not making any big changes to the product.

Nice. I like this. Tell me about some other common areas of growth you see with maybe other businesses on Acquire. What are other common scenarios? Is it pricing, is it marketing channels, Is it lack of features? What do you think? Like, let me ask you this, if you were to look at other businesses on Acquirer, how would you narrow down to what you're going to buy next?

Right. So after this experience I had with Seamless for Science, I feel like I've really zeroed in on my buy box, meaning companies that I really want to buy based on their certain criteria. It's really easy to say I want to buy something that has great marketing, makes a lot of money, like everyone wants that. I think a really good strategy is to instead look for companies that have a specific thing wrong with them that you can improve on and narrow down your criteria that way. So for me, my background is in sales, so I would love to buy a company that has maybe a lot of inbound leads that are potential enterprise customers where I can get on a call with them and then sell them on the service. Another thing I realized is and kind of the micro, the micro part of acquire kind of smaller companies that are maybe making single, single digit thousand MRRs between, you know, 1,000 and 10,000. It's a lot easier to double MRR when you're in that lower range. If you're buying something that's making $40,000 a month, it's really hard to double that. Mr. Because these are companies that are probably already doing marketing, have already optimized their conversion funnel and all these sort of different things. But if you're buying something that's making two or three thousand dollars a month, maybe they haven't even done any marketing, maybe their website's not optimized. There's a lot of these simple changes that you can do which can quickly double mrr. It's a lot easier to go from 3,000 to 6,000 than from like 30,000 to 60,000. And then once you get there, you can then turn around and sell them and for a higher valuation and make a pretty good profit.

That is super smart. I completely agree and I see that from time to time and I love seeing that. On acquired, can you tell me how long did it take you from when you bought Seamless to when you decided to sell it again?

The total process was I bought it in March of 2024 and I sold it early October 2024. So how long is that? A few months?

Yeah.

That's pretty quick. A few months? Yeah.

Nice. Tell me though.

And that was my goal, like when I bought it. Coming from EdTech, it's not something I'm super passionate about anymore. I kind of want to get out of that zone. So even when I bought it, I knew my goal from the beginning would be to just sell it. And that's why the turnaround was so quick. It wasn't something that I wanted to work on for years and years.

Nice. Tell me about your experience selling on acquire.com you've bought an application. What was it like going through the process of selling? Was it super straightforward given that you've been on the other side, which is buying?

Yeah. So it really helps out when you've been a buyer before and been someone that's also sold a company before. So you kind of see the two sides of the coin and you know what to look out for. So when you first post a listing, you're going to get inundated right away with people that are interested in buying it. And from then on it's just looking for the best deal. Sorting out people who are kind of time wasters, who just want to check out what you're doing, maybe check out under the hood, see kind of your stuff between people who are actually serious and want to buy it. So the process goes pretty smoothly. Obviously selling a company isn't like, you know, selling lemonade at a lemonade stand. There's a lot of ups and downs, but overall the experience is extremely smooth.

I love that. If you had to give three pieces of advice to maybe another founder looking to sell their startup on Acquire, what do you think those pieces of advice would be?

The first piece of advice that comes to mind is people that are actually interested ironically don't ask a lot of questions. They kind of just send out an loi. They're really anxious to get on a call with you. And then the questions come while on a live call. But people who are just sending you a bunch of messages without trying to get on a call with you and I've had people that do that for weeks and weeks generally aren't interested, even though they might seem like they are because of all the high level questions they're asking you. So that's my first piece of advice. My second piece of advice would be when you actually have a couple parties that are interested in buying always. This might seem like an obvious one, but always prioritize an all cash deal over a seller financing deal, even if the seller financing deal might be at a higher valuation. And then the third one is just to find people that really care about what you're doing. Obviously you probably care about where the app is going. You don't want someone to buy it and then kind of make a mess of things. You obviously have that emotional attachment to it because you work so hard on it and so really don't just, you know, sell to someone who's just, you know, wants to buy and you don't know much about them. Like really get to know them and find out who they are.

I love that. I agree with all of it too, especially the second part which is the terms of an acquisition. Definitely all cast or close is always better than a mix with an earn out or seller financing or whatever maybe. John, great feedback and great advice for founders. What are you up to next? What are you doing these days?

Yeah, so I launched a new tool called Conversion Agent AI. It's kind of funny because when I started all the ChatGPT plagiarism in EdTech, it's kind of when I was finishing school. And now that I'm this builder of SaaS companies now, I'm transitioning into something that kind of solves my needs in the current version of life that I'm in now. So Conversion Agent AI is a tool that can help you increase your conversion rate by embedding an AI assistant on your landing page. And when I say an AI assistant, I don't mean like an AI chatbot which you can just talk to. I personally have never had a good experience with those, but this is something you can actually talk to with your voice and it'll explain the product, the landing page, all these details and can increase your conversion rate. I'm also thinking of getting involved in some other startups as an operator about a couple people reach out to me that are interested. So I'm just kind of considering all those next options.

Awesome. Tell me where people want to learn more about you or reach out and hear more of your story. Where can they find you online?

The best place would be on Twitter. My username is Tomer Underscore Tarski.

I'll put that in the show notes. But Tomer, thanks so much for coming on the podcast. Congrats again on the acquisitions, and I'm rooting for you and whatever you do next.

Yeah, thanks for having me, Andrew.