SaaS Acquisitions w/ Colin Keeley founder at Verne

Foreign. Thanks very much for joining me on this podcast. I'm excited to chat with you today.

Absolutely. Happy to be here.

So you recently acquired a pretty popular app off of Micro Choir and before we started recording we, we're kind of going over that and I was telling you there was about 100 people that had reached out a lot of interest in the app. Do you want to just kind of start there? Maybe just give your background how you kind of stumbled across that app and we'll kind of go through this story from start to finish.

Yeah. So abbreviated background. I've done a bunch of different startups, Stretchy Gene company, TV and movie recommendation company, like a software marketing agency, sharing economy startup. A bunch of failures basically like sticking my hand in electrical sockets and finding bad businesses. Through that I ended up in venture capital. I was working at Builders VC and spun out a couple years ago with some of those folks. So now we have formulated which is a automation agency. We have Avocado which is a audio course platform. And then we like through that process it's like we were spinning up one to two new companies a year and it's pretty hard even for people that have done it before. And I kind of discovered the holding company model or the Micro P model which is adjacent to the studio model. And it's like oh, you could just acquire product market fit and you don't have to do the zero to one phase and you could just use an established playbook and grow. So yeah, stumbled across microacquire in that process and did our first acquisition a few months ago. Probably do like three more this year is our plan.

Nice. Tell me about. So you initially came across across the listing, how did you initially reach out.

To the buyer just on microaguire just sent a message and then Brandon, who is the seller, Brandon and Patrick reached out to me. He read like every blog post I have on my website and and I have like a bit of an online presence, a bit of a Twitter following and he was like really would like to work with you. Had our first call and it went really well. I'd say we just like vibed. We both did similar companies that flamed out and we're able to like kind of bond over that. And he was more interested in finding like a really good fit and a good steward for the business cause they had worked on it for 10 plus years than optimizing sales price.

I think that's awesome and I always recommend that in terms of just having a good relationship with the seller or as a seller Even with the buyer, Just because you're not acquiring like a car, it's not just like, here's the keys, good luck post acquisition, which we'll get to. I'm sure there's some things that Brandon helped with. Was there anything you did to like, you know, stand out in terms of your questions or just your approach or I guess put another way, if you had advice for first time buyers when they're reaching out to sellers, what are some things that you'd recommend doing and not doing?

Yeah, if you just have an online history, it goes a long way. You can't really fake that. You can't fake being a good person over 10 plus years in the industry. So that I think was obvious to them before we even had the first call. Like that we were going to be good people to deal with and we weren't going to try to screw them. It is very much not like handing the keys over. Like it was a very close process where we were talking every day for a long time of just like there's 20 plus accounts and nothing actually transfers easily or some of it does. Stripe transfers easily. A lot of the rest does not.

Nice. Tell me about the. Okay, so you guys, you come to terms. Walk me through the process from there. Did you. How quickly did you submit an loi? How quickly did you move to a purchase agreement? What did that process look like?

Yeah, so we knew. I had no idea there were that many other buyers, but I knew there were a couple other offers on the table and I can't discuss actual terms, but I felt like our offer was not going to be the highest. So we moved really quickly. And kind of in a weird twist, they weren't willing to sign an exclusive loi. So we really wanted to move fast and actually wrote down all the dates so I could go through it. So first discovered on January 19th, 20th, first call, 25th, offer made over email. So we did all the diligence in like five days there and then tentative acceptance was six days later on the 31st and then we were kind of off to the races. Um, signed the LOI actually on the February 3rd, three days later. And then it was a lot of back and forth to the lawyers on terms that ended up really not changing whatsoever. And then in the middle there it was like the snowstorm in Texas and Brandon, Brandon actually just left because there was a threat of them losing power and he went to Florida. So that like kind of delayed us for a week plus, but nothing changed. Like, so it took 41 days total and really, there's only, like, I don't know, six days of real work in there. And just, like, setting up a company, getting the money wired over and everything took most of the rest of the time. And dealing with lawyers back and forth.

Nice. I like how you. So just to clarify, you confirmed on terms just verbally over email before actually putting that into a letter of intent, Correct?

Yeah, exactly. And nothing changes really from there.

Yeah, I like that because you're not, like, just shooting off a letter of intent and then you're not on the same page and you have to go back and edit that. I think that's a good tip for buyers is make sure you're on the same page before firing off, like, a legal document. Would you agree with that?

Yeah. So it's a relatively small deal. It was in the six figures, but we didn't want it all to get eaten up with legal fees on, really, either side. So using lawyers, like, as little as possible was kind of our goal. And I know a lot of people like to get people tied up with an loi and then, like, try to negotiate them down. I don't think you're going to last very long in this, like, micro P world if you build a reputation for, like, messing with people like that.

Yeah, I agree. I see. You know, sometimes people will fire off an LOI too soon. You know, I think it's important to be on terms before sending it off. So. Nice move there. I guess my next question would be, okay, you got, you know, you're on the same page. You got that letter of intent signed. What happens after that? Did you use escrow.com? what was kind of the planned, you know, closing and transition? What did that look like?

Yeah, it was a little funky. So we talked about escrow. We both felt like there was enough trust there that we didn't want to do it. They wanted effectively our lawyers to be esco. Like, they would hold the signed documents as things kind of transferred over. We didn't really want to, you know, pay our lawyers to do that. So we just kind of. It was, I don't know, mostly trust and, like, starting to hand stuff over. And as soon as they handed over a few things, we wired all the money and just kind of went. So it was definitely a little bit of a leap of faith, but it worked out really well.

Nice. And then in terms of transition, how did you. So there's, I assume, multiple services that blinksail had attached to it, like aws, billing, stripe, everything. How did you document all that? Did you Just make like a list and then you kind of checked off each one as you transferred them over. Like how did you organize like that process of all the assets and accounts that you were going to be acquiring?

Yeah, we used the notion doc and they put in the login information there. And then it was like check like transition credit card to our credit card. We have access to account now check kind of like that. I probably just use Google Sheets going forward, that kind of thing.

Yeah, just simple checklists. I like that. I've actually seen the transfer doc. That's why I asked. So that's awesome. And then. Okay, so you have everything transferred over. What did you post acquisition support look like with Brandon?

So it wasn't a finite list. Things kept being added and we're like, oh, we actually have a PayPal account. We don't know where this money coming from, but here it is. And that's like five days later. And then we had to do a reconcile roughly a month later. And then trademarks also were delayed a little bit like the transferring of trademarks to us. But it was all pretty straightforward. Like is a little bit of you have some of our money, we have some of your money a month later. But it's all good now. Um, so a month out, we're about all set.

Nice. And so what are the. So that's kind of like the, the start to finish. I, you know, it all sounded like it went so smoothly, I guess. Any, any tips for like first time buyers or any like learnings from this acquisition?

I. I think it went really well for us. Find someone you could trust. Like it's hard to do a good deal with a bad person. It was really helpful for us that Brandon had gone through acquisitions before, so he definitely like walked us through it a little bit. But no, I find it on Microacquire would be my recommendation. I think it would have been really hard for us to like do our own outbound initially and find something that someone was willing to sell. And now like since I've done it, I get a lot of inbound and that's probably where our next acquisitions will come from. But microacryu is amazing to get started.

Nice. I appreciate that. Shout out, I guess. Final questions. Lots of people are interested in acquisitions these days. Where would they go to learn more? I know you have a blog, correct, or newsletter that you've started.

Yeah, so I have a blog. Just Colin Keeley dot com. I'm actually working on a course. So we, we have a course company and I think there's just a ton of interest. And this is like one of the most opaque industries as far as like sourcing a deal, walking through negotiation, closing a deal, all that stuff and how to grow it afterwards. So I'm hopefully going to launch a course in the next couple weeks here. I'm probably like halfway done with outlining it. That will go a long way, hopefully for people as well.

Nice. I remember you mentioning that. And I am on the hook for sharing that with everyone in Microquire. When that's done, what is that can include like what parts are you going to go over? Just what's kind of like the short teaser if you. If you get one on the course.

Yeah. So I've been outlining it in Rome, which has been really helpful. So why buy versus build, choosing your niche, like the whole deal process overview, sourcing, like the different marketplaces, brokers, outbound email templates, diligence negotiation, like the whole walkthrough of modeling out a business and negotiating on a price for SaaS or e commerce and then the different ways you could structure deals and finance them. And then afterwards after you close a playbook for boosting returns. And all this is kind of with the mindset of just monetizing our exhaust. So we had to do all this work anyway. And this is just opening it up and walking people through. These are the actual templates we use and this is how our deals go down.

That's awesome. Well, Colin, I appreciate you joining me on this podcast. I guess if people wanted to connect with you and learn more, where could they find you?

Yeah, I'm super active on Twitter, so find me Colin Keeley on Twitter and then if you want to read anything, Colin Kiely.com Brent and I also have a weekly podcast called Creator Stories where we basically have calls every day. And I was just like, let's make our Friday win open. So that is kind of documented our whole experience of like stumbling into this micro private equity world and everything we've learned along the way. So I think that'll be beneficial for people as well. Awesome.

Colin, thank you so much for joining me on this podcast.

Absolutely. Take care.

Cheers.