Selling a VC-backed Business with Jes Bickhart, Founder of Spectacle

All right, I'm here with Jess, the former founder of Manow, who recently got acquired for seven figures. Jess, how you doing today?

I'm well, Andrew. Thanks for having me on.

Yeah. So again, huge congrats on on the acquisition. But for those that may not know you, do you want to do a brief introduction of yourself? Yeah.

So from Philadelphia originally, Go Go Birds. Moved down to Los Angeles for film school, went through a bachelor's program at Will Mary Rock University, studied production, worked for about a decade in film and development production homing Champion movies primarily, now a lot of TV. And then in 2018 there was a little bit before that, probably 2017, there was a lot of chatter about Disney potentially starting their own streaming service to compete with Netflix. And then all the other studios were starting conversations as well. I thought it'd be a good opportunity to take my background from intelligent development and create aggregation platform B2C primarily, at least in the beginning, to aggregate those channels and create a market for people to find and discover new content. So my background in film intelligent kind of inspired the company and the product for me now.

Nice. How do. When did you like, what was the moment like when you decided to start this business? Was there like a day you were like this is a huge market opportunity. Let's go after this like a, I'm.

A, I'm a seasoned entrepreneur who has failed so many times and so like but that didn't. I built a lot of startups with, with college friends. I think I applied like eight or nine times to YC with various ideas over the years and it's just I, I, I.

So I assume you just can I, I. So if I, if I understand you correctly I might be able to relate. Did you just kind of get the idea and just start running with it?

Exactly. There was not a who trapped and thought that went into it. It was more of this is a consumer pain point that I seeing be potentially a long term problem for people is too many applications to subscribe to too much content. How do I actually find stuff? You know, something apart from search? You know, discovery is such a big problem and still is a big problem. You know, as we can get into later. The problem with all these aggregators is business model and that's the big thing. Tough nut to crack. And yeah there was no, there was no alcohol that went into this design to start building, you know, see if people.

That's such good advice. I always say just like you don't need that extra feature. You don't need just ship whatever you have and the market has feedback that you just have to hear. It's just, it's always funny that the. How naive entrepreneurs can be. And that's just. You gotta get.

So yeah, like, I love design, like, I love beautiful design, UX ui. I love that. I love that process of working talented designers. But at the same time, like our first version, Carved Data was like just a web, like a website. And we just needed to prove that we could do what we were saying to do, which was creating deep links that could connect to the content on the platform and start the autoplay sequence. As opposed to just like saying, oh, this is on this channel and good luck going to find it, you know. So we needed to prove that we could develop a deep link model that worked. And that that was like the very first question out of every VC's now too. It's, you know, where, where are you with the technology? Yeah, they didn't even like when we were read our pre cgram, it was very much like, does the technology work? And then you could easily just pull up the website and show them that it worked. It wasn't pretty ahead of me, but at least the technology worked. We didn't have much traction at all back then. It's like 2018. But at least we could show them like, oh yeah, like link to Netflix, link to things like Crunchyroll and a couple other platforms that were exploding back then. Now obviously it's very different ecosystem.

Nice. Let's take a little step back. Tell me, what problem did Minnow solve? I know you mentioned aggregators. Um, but just so I can wrap my head around it in terms of.

Yeah, yeah. So you sit down at the couch after a long day, you crack a beer and you just kind of open up Netflix and start scrolling. You open up Hulu, start scrolling Disney starts scrolling. And you know, it's like there's no playlist, you know, unlike Spotify or Apple music, you open it up and you know what you're going to listen to right away and you get great recognition right away. With film and tv, the sampling time of music is like three to four seconds. You're like, I kind of like this. Or not tilt TV. Like you have to watch like 20 minutes something, figure out if you like it. You do that two times and you're done for the night. Like you're not going to keep watching something.

So.

So Samling doesn't work the same way in film TV that does use it. And so the content discovery became the problem. That hair on fire problem that we really wanted to solve. And a part of solving that is building a robust recommendation algorithm. And you know, everyone has their own internal. But no one did it horizontally across all of them. And that's what we tried to solve for.

That's amazing. I have spent many nights scrolling through Netflix still and turning to my wife and being like, there's nothing to watch. That's it's a weird sort of like psychological thing and you're going through like a hundred things. You're like, I don't like it, I don't like it, I don't like it. So I, I, I, I don't watch too much tv, but, but I, I, yeah, no. And then also switching over to Hulu. What does Hulu got? I don't know.

So that, okay, 40 minutes goes by, you still haven't found anything. And then it's already like 10, 10, 30.

That's kind of where I don't watch a lot of TV and just kind of like, all right, so I'm fatigued. So okay, I get the problem. And, and now this. To me, this is like a meaty big problem because you're working with Netflix and Hulu. How did, what did you go to market look like in terms of getting this in the hands of customers or.

Yeah, good question. So number one was making sure the technology worked and then number two was building out. So unlike what I would recommend for most entrepreneurs, it's like just build a chip first version. We had a competitor, a very successful competitor that did that. They built just for mobile and they did really well on mobile. But people don't really watch content on mobile while form content on mobile. And so like if you're on a couch, you're not going to be watching Netflix on the same, especially if you have on the phone, if you have a massive not appeal. So but they did it, they got, they acquired users that way really well. So what we wanted to do for RGTM early on was let's develop for everything. So like let's develop for iOS and Android, let's develop for CTV, so Apple TV, Android TV. And it was let's develop for Roku, let's develop for web and then let's develop for tablets, like Unsubbatch for tablets. So anywhere where you're watching your content, you'll also be able just to pull up your playlist or whatever, you know, the algorithm, who you are or where you're trying to watch. And that's a very expensive technological way to launch a product.

Yeah.

So I6 figures out to do that?

Yeah, I. I was listening to all those platforms and my prior business, we had native iOS Android, and then we had a web application to build the mobile app. And it was a headache. It was such a headache. You know, keep submitting apps like Apple, spinning the app to Google. So.

Yeah, and it's. It's just like such the wrong way to go about launching a startup these days. I get that. But we also wanted to do it in a way where everyone could experience that joyful moment of, like, surfacing content that you knew you wanted to watch on whatever platform you wanted to watch it. And so there's a lot of friction if you find that Netflix movie that you want to watch on your phone, and then now all of a sudden you have to go and like search with your TV remote on your TV to watch it. So that was too much of a disconnect there. We really wanted it to just deeply click, watch down Netflix and take you to the Netflix app. Or watch down Hulu. Take you to the Hulu app and watch it.

Right.

So we wanted that magical moment to happen. And I think that's why we had success, is because we did spend the time. It took us probably about a year, develop the deep link protocol, the back end work, and then developing all of those different front ends.

Nice. So how did you. So tell me about the distribution channel. How did you get this in the hands of users?

I'd say there's probably two distribution channels that worked for us on the B2C side. One was organic social, and the other was PR. Because we developed on a big channel, we felt that it was probably worth it to spend on pr. So I'll speak to that first. A lot of. I mean, this is. There's a lot of, like, controversy on whether you should pay a PR firm for launching or not. You know, we didn't really want to be on TechCrunch. We wanted to be on a more mainstream periodical. And we got our first press break from Mashable, and then we got a follow up from Fast Company and those two pieces. And we worked with the PR firm, Rogers and Cowan in Los Angeles. They're right down the street. They're amazing. Had a really good relationship with Roger and Cowan. I think it was good rates, and they pitched like crazy. And our Mashable piece and our Fast Company pieces did really, really great for that organic reach right out of the gate. And because we had spent so long developing the tech and because we were everywhere, it was, once people signed up, they downloaded on multiple applications and they were using on multiple applications. And we could see that live. And like everything, you know, you peak your downloads right away and then you plateau. But the peak was so high, like on launch day. We broke into Apple's top 200 apps on the launch day and we never until we sold. So it was pretty great. I fluctuate a lot on that list, but it was so great just to have that organic reach right out of the gate. I guess that's more of a paid reach, but it was still, it was great. And then the other thing that no channel that really worked for us was Instagram. We like to pride ourselves and say we built one of the fastest growing film and TV meme accounts on Instagram. And at its peak, we had over 600,000 followers, including Big celebrities. And we're promoting new movies on platforms, old movies on platforms, things that are coming, things that are going, creating this great dialogue of comments in the comment section. And at our peak, when we were like, I had a team of three guys just managing that one Instagram in San Antonio. And at our peak, we probably were getting about 3 to 400 downloads per day completely organically, just because we were talking about movies. And then people would be like, oh, this is a cool account. Go to the link, you see that they like aggregate. And so you download app, a chart app. So that was a really great channel for us. We tried everything else too. You know, paid, paid search, paid social, paid search. SEO wasn't really big for us because there are a couple of aggregators that do all SEO, like some competitors. And so they, you know, they've kind of taken that off the table. We didn't want SEO, but everything else, we really did really well.

Yeah, press is one of those things. My, my previous startup was also press heavy. And it's just such a great way to build like brand credibility quickly, especially if you hit the right audiences. And I remember Mashable, we were featured in Mashable once. Also Fast company. So it can be a really, really effective strategy, but you have to have a good story. I think that's where a lot of founders, you know, kind of break down in terms of, you know, good PR strategy. Like you were solving a problem that, you know, is mass market, where even I can relate to it, even my wife could relate to it. You know, my son could relate to it. I already sound old enough, but you get my. Yeah, you know, it's a good. You gotta have a good story. And you did. So that's. That was very smart of you. And I love also the Instagram account where you're, you're, you're indirectly talking about your product. You're just really connecting with customers of your product. And it's kind of a, you know, create value. Create value. And that value can just be entertaining. Like, you're just making people laugh. You're just capturing their attention.

We rarely talk about the app, even in stories. Like, like, whenever we would do a new feature, like, whenever we publish a new feature on the apps, we would always highlight it in stories, but they typically did so poorly compared to the memes and everything else that we're doing that we're like, it's not worth it. Like, people will find us because we are posting three, four times a day on Instagram and doing stories every day and live streaming and, you know, just talking about. My whole team loved movies. That was like a prerequisite of working at minup. You know, you really have to be a cinephile.

Nice. I love it. Yeah, the meme accounts, I think that's, that's, that's a great, great move because it's such an easy way to, you know, especially after, you know, really broad audience because, again, people love to laugh, everyone loves movies. And if you're able to kind of tap into that and then, you know, attach your product to it, you're just creating so much brand awareness.

Totally great, totally agree. And memes, like, I don't know if it works for everybody's brand, but memes typically get, like, the most engagement as far as, like, Facebook's algorithm goes. Like, if you get the more shares you get, the more likely you're going to be featured on that. So for Page, so creating content that is inherently shareable, not necessarily the most likes or comments, but like, creating content that people share with their friends on those, on the social platforms is so valuable to that algorithm. And memes, for some reason, people love sharing memes. So we grew really fast. I mean, I think we went from, you know, zero to 600,000 in, like two and a half years, so.

Oh, wow.

And that, that was algorithmically, you know, for, like, for a while you go, you know, 100, 100. But then, like, when you're at the 600 level, like, you're fluctuating thousands of people every day and unfollows.

That's incredible. Yeah. I mean, no, I always say no one remembers a boring brand. And have fun with your marketing. Don't be boring because no one remembers. Here's my ebook. Making customers laugh and feel some sort of emotion can really drive brand affinity.

At that point we were only begin to see. I just wanted to develop a relationship with our customers and and that was such a great channel for just communicating with where they were. A lot of people still turn to Instagram, Facebook and Twitter for extra for content recommendations, you know, and so what are their friends talking about? What are their friends excited? And so we built native like sharing features on the app so that if you found a movie that you really like, you just share it from our app to Instagram and it would deep link to that content on our page. And so it was just like we tried to tie the two very tightly together and as often as we could and it worked. Great strategy for us.

Very nice. But so now I'm wondering what made you decide to sell the company.

Covid happened and you would think the opposite happened when people are at home watching how exactly places the surface. But very quickly we were VC backed. We needed to keep raising money in order to maintain this free service and platform that we're providing people. So it very quickly became apparent that we needed to pivot into a B2B strategy, something that we could actually make money from. We didn't have 100 million users, we couldn't monetize via ads. And that also was kind of getting a little shady. Facebook was getting a lot of flack during that time for monetizing on user data. So we pivoted to a 2B strategy where we saw an opportunity with a company like Nielsen at Cantor to create a streaming big data opportunity for investment companies to learn what people were streaming, what people were subscribing to and unsubscribing to specifically that metric that is so valuable to people, especially here in the financial services industry and want to know whether Netflix is going to have a good or bad quarter according to analyst expectations. So we had this robust data set of people telling us what they were subscribing to and what they were unsubscribing to and why. And if we could build a B2B platform that enable us to kind of of extrapolate all that information and learn whether you know, is the analyst going to is Netflix going to be analyst expectations this quarter or not? There were like 10 to 15% swings every quarter in stock prices of like Comcast, Netflix, Apple, Amazon, you know, specifically. All these analysts were just very interested to know how the streaming businesses were doing. This is like 2011 or 10 and 11, that sort of thing. And so it was just like a really good time to be pivoting to a B2B. We were able luckily to raise our last round of funding in order to make that pivot. I think a lot of our cap table was interested in seeing us succeed. I mean there was a lot of competition in the innovation space back then but people thought that there was still an opportunity for there to be a winner take all mentality. And so we were encouraged to make the pivot. We had the pivot and Andrew shot myself at the foot. Like I realized very quickly that the more we turned into like a BB SaaS product where you could subs, you're like hedge fund or investment company could subscribe to our data. The more people that pay to subscribe to this alpha, the less alpha it's actually providing in the marketplace. Your data becomes priced in to model. And so we, we made a decision. I don't have any financial services background at the time, I didn't. So what made the divot seem like a great idea? You know, our SaaS products selling for like high five figures a year. So it's like a really good business and you're getting sales, obviously it's great but the more sales you have, the less valuable the data set is. So the less value the less you can't keep increasing the price of the product. And so it very quickly became apparent to me what we had built was like a tool of a company, not a full company itself. So we hadn't quite cracked that business model. And I think for founders understanding holistically.

And being able to step back from.

Your day to day and be like have I built a product that someday could be fully profitable, not something that's tied to this spigot of money, VC venture coming in, propping us up. But can I see this becoming a profitable venture is a question that everyone should ask. And at that time when we asked it, the answer was no. And so we knew then that after a successful pivot to a new business model that it was time to start looking for buyers.

I love that, that reflection in terms of, because it's just, it's startups, you know, like not everyone is going to be a billion dollar company. Statistically you have a 0.1% chance. And I think, I think even you know, just to you know, kind of maybe segue, you know, the worst thing, one of the, one of my least favorite things to see is when entrepreneurs get stuck in companies where it's very clear that you know, this isn't going to be, you know, a multi billion dol or you know, whatever may be the situation is clearly showing. You know, you built a really great business. It's probably in your best interest to sell and then just take another swing at something. So just that. That reflection in terms of understanding. I had a similar company. It was. It was a crypto company, and we. We built a protocol to make. Do you want to hear the story?

Yes.

All right. So it was my second startup. I mean, I started like 10, but like. Like, I count like three as real ones. But what we built was a protocol to speed up times on the Ethereum blockchain. And if you haven't noticed or if you're into crypto, it's still slow. So we chipped away at it. But we got to a point, no.

By the way, it's like, if you're still into crypto, it's October 6, 2023. It's like, that's probably good for everyone. Like, are you still into crypto?

Yeah. So we. And then. Well, what happened? We. We also got hit with what I call a superbug. So superbug is when something just so insane happens to what you're building. And it's just. Usually Mark Andreessen has, like, a really great post on superbugs, if anyone wants to check that out. But essentially what happened was 2018, the SEC comes out with guidelines saying that what we're building, the first application was going to be essentially like a decentralized coinbase. And so we kind of had to come, you know, let's call it like a sort of meeting of the minds as a team. I just said, hey, how much do you guys like crypto? You want to go to jail over this? And so we put in a proactive call to the SEC and said. Because what happened was they deemed everything on the Ethereum blockchain as security. So we were essentially working to build an unregulated securities exchange. Very legal federal crime. And so. But when we started, they were commodities, so that you're allowed to trade commodities and securities. So once that happened, you know, we quickly found out that we're not in the technology business. We're in the regulatory compliance business. And the capital to take the business to market would be, we estimate, around like, 10 million and then two years, because we'd have to get a broker, dealer license, money transmitter license. We were just like, no, we don't like crypto that much. So what we did was we positioned the company to sell, and we took the technology and then ended up selling it to a strategic buyer, someone who had the regulatory compliance. But we could have been like we'll just keep charging through and we'll keep. And the company would have just died, you know. Yeah, yeah.

Glad you told that story Will be there will come full circle with the buyer of Minnow. They are a licensed dealer. They, they have this, they've gone through all that leg work that you're talking about and they usually are great buyers for fintech tools. Like, I would, I would say that what you built in the crypto space was great tool that your buyer was able to repurpose for their own benefit and their own kind of roadmap there. Similarly, with what we were building, someone saw what we were building in the community and the data set that we had and said, oh, that's valuable. Let's bring that and plug it into our own product suite and just absorb it. And I think, you know, you've been through that journey. You know, I never had a conversation about becoming like a broker dealer and dealing with licenses, like hitting minimums with clearinghouses and stuff like that. We didn't. There wasn't even a discussion about that.

Oh, it's, it's, it's wild. You got to have like a chief compliance officer. The, the funny joke amongst everyone I've talked to that are broker dealers. They're. Oh, the SEC is my co founder. Basically every email, every transaction has to report it half in run. It's, it's no joke. And so we just. And, and I was young too. I was, I'm, I'm 34. I was 30 when I was running this company. So like learning that stuff. I was like, this isn't for me. And it was a very technical project. But tell me about the acquisition. I want to hear like, you know, how you find a buyer. How did, like how did the.

When you know, when you know you want to sell and you kind of just, just put on your sales hat. And I'm sure everyone listening to this podcast, everyone listens to your podcast like they, they are on sales in some capacity and you, you just scour the marketplace. And so I found you guys as like a marketplace to be super helpful to. I can put my data room together in a way that's very clear to someone that is in the market to buy a startup. And so just listing everything else out on acquire.com was really helpful for us to organize our thoughts in our data room. And then in addition, addition to the acquire.com listing, we also built out like a Dropbox, like a private Dropbox folder. And I just hit LinkedIn and we're finding business Development execs, senior business development execs at companies that may be interested in our data set and in our product suite. So, you know, you come up with like a long list and then you just start cold emailing people saying, hey, this would live really well in what you're building. And here's a deck that I built custom for your company and how you could integrate all the stuff that we've built. And that takes a lot of work. Like you have to build a deck for every single pitch. But I think of like 15 custom decks that we made for every pitch. I wrote this down. We had six in person meetings with large companies, everyone from like Fortune 500 to some of the largest nonprofits in the world that could benefit from the technology that we built. So six in person meetings translated into three real diligence meetings where they would bring in their chief financial officer, they would bring in their chief counsel, and they would look at our deck, they'd look at our tech, they'd open up our hood, rummage around. And out of those three real proper diligence meetings, we got one charge sheet that we ended up closing. So that was kind of our process. And the attire from moment we realized we want to sell to sell was around 13.

Nice, nice job. I mean one, one thing I love about that is just in terms of the strategy, in terms of, you know, proactive reach out to buyers and having like specific decks. Because yeah, when you approach a strategic buyer, you definitely want to have like, you know, a pitch that's like, this is specifically for like, this fits in like a puzzle piece. And I'm going to tell you why. Like you build the business case for, you know, the head of business development, then I'm sure it moves up to the CFO and then eventually the CEO. So well done on that. Man, that's awesome.

I mean like, I've never been through it before. I didn't know if there was a proper way to do it, but we had to doing it that way. You know, we got a lot of no's, but we had like a 30% close rate, 40% close rate to just as a first meeting, you know, like an in person, not even just like a zoom person coming out of COVID And so that was, that was great. And being in person was great. Just kind of explain things. You can, you can feel their tone of voice, whether they like certain elements or they dislike certain elements. And that was really helpful because then you can always do a pitch as you go on the fly. And I mean, we did a 50% close rate from meeting to actual diligence and, like, follow up, two or three follow ups. And so it was an efficient process. It takes a long time, which I don't think I was expecting. And while this process is going, you still need to fund operations, you know, like, you can't just stop paying your AWS bill, you know. So, you know, we ended up keeping the company afloat until we found a buyer, and then we identified what elements of the company that they were most interested in and we ended up doing it like an asset sale to the company.

You just, you brought up. Go ahead. Oh, sorry, Go ahead.

No, no, go for it.

I was going to say you brought up a really, really, really, just great point in terms of, like, when you're speaking to buyers, understanding what they're interested in. Just like in sales, you know, one buyer is going to look at, you know, financials, one's going to look at a specific part of the tech, one' be interested in the team, but just understanding, like, what's super important to them and just honing in on that and just keep honing in on that and just keep honing in on that. Like, that is so key. And sometimes you just ask, you just be like, what part about the business do you like the most? Is it. Are you a financial buyer, strategic buyer? Do you see this integrating? You see this as like, you know, a standalone product? Like, just understanding, like, how they would see this position in their business can, again, really help you, like, strengthen, like, that business case and like, like, also, in my opinion, during negotiations, because, you know, what, what, you know, hot buttons, like, really press to get the buyer to take action.

Yeah. And then the one, like, insight that I found kind of intriguing, I did not coin this. Someone else said this, and this is appropriate for, like, fundraising as well. Like, if the person you're talking to is looking for a reason to say yes, then we're probably out. Like, if they're looking for a read, they're like, tell me why I should buy this again, like, but what is it? Like, if they're looking for a reason to say yes, they're done, they're out. Just kind of end the meeting, Go get yourself a coffee. If they're looking for a reason to say no, it means they're already in. Like, they made a decision and they're like, all right, like, de risk this for me more like, when I buy you, like, what's, what's going to happen? Like, they're looking for a reason to say no. And so they're, they've already said yes. So you just need to get over that. Go along like you're, you're already there, you're 99%.

Yeah, I say that all the time. Like a big part of selling your business is de risking it for the buyer and sometimes you have to like, like hand it like spoon feed it. Like, hey, these, this is, this is the stuff that, you know, could go wrong. This is what transition looks like. This is how we can integrate. This is the timeline, this is the product, you know, all that stuff to just de risk the business for them so they don't have to assume. Because if they assume these things without speaking with you, you know, they're going to find a way to say no. So being able to, you know, rebuttal any sort of objections like that, that's, that's a good, good, good quote. I like that.

Yeah, I, I mean, I just, I found it to be very true even in fundraising, you know, like, I'm sure it's true at sales. We didn't, this wasn't like a sales heavy business. Sweetheart. Got up. But, but yeah, I mean, do you guys want to hear a little about like the legalities? I'm not going to get into too many specifics obviously, but like, yeah, about like post signing a turn sheet. I feel like there's not much context out there for entrepreneurs that like get to that stage or know what to do after that stage.

Yeah, sure.

Acquire.com. i mean I'd love to know also what acquire.com does at that point. But we, we didn't sell through acquire sold directly to the buyer. So it's probably a little different as services you provide.

Yeah, tell me.

But so we, so when we had this slide term sheet, we, you know, our, our engineers joined forces with their engineers and we started integrating all into sets and you know, kind of changing the credit cards on the aws, that sort of thing once the purchase agreement was signed. But we went back and forth with council to make sure that the purchase agreement was done. The acquiring company didn't want. There was probably 25 names on our cap table at the point of sale and the acquired company didn't want 25 new names on their cap table. And so we rolled everybody up into like an SPV LLC and they acquired that one llc. So it's just like a super clean way to kind of do that transfer of assets. And then from the buyer standpoint it's great because they have one line item on the cap table with a certain equity position, they own all the assets. As far as financing, like taxes go, you know, we sold to a hold company. It's like it's a private equity firm. So they have multiple entities. One more entity wasn't an issue for them and it was just a super clean way to do it. It did take some time, but yeah. Oh, I forgot to mention we had to convert the safe notes too because we only raised money on safes. So you know, we, we converted the safes. You share that worksheet with all of your investors, say you're safe, that this amount converts at this amount. You will now own the this many membership shares with the llc. You know, and then that's kind of how it goes. You share all that math with them. They share with their council. Everyone sh offline. You get signatures from the majority deals done. It's a lot more. It probably took us three months just to do the actual transaction. But when it was done done. It's really great from a buyer standpoint because it's just again one line.

Yeah, I've seen that before. I mean typically, you know, acquisition that flows through part.com. so we'll, we streamline all the legal docs and so from loi to asset purchase agreement and then we have an integration with escrow but for larger deals, let's call it, you know, seven figures and above, we have third party attorneys that will loop in to work as the escrow agent. Work through like if you have a messy cap table or if there's employee contracts that need to be reassigned. Like the legality part around that is so like reps and warranties. I'm sure you had a lot of fun with that. You know, I, I remember doing reps and warranties when I sold my first company and I just said talk to me like I'm fine five and it just felt like I had to like write down everything I've done wrong in my life. Like one, oh, one time this customer complained. One time this happened. You know.

So now it is as tragic t to summarize complex legal docs which is so nice.

It's like, yeah, I don't have to.

Say I send this to a lawyer. I can just be like chatgpt. Talk to me like I'm two like just spell this out for me. What's the issue?

Yeah, yeah, I mean that's, I feel, I feel like that's already here. But as, as the deal gets bigger, you know, it's really be. It can be. There's just, there's so many moving Parts, there's so many stakeholders, and you want to make sure that it's done correctly. So looping in, you know, professional legal help, especially on the higher end, can really, you know, make or break a deal. Because also on the other end, you know, we see deals, you know, unfortunately fall through from time to time at like the 11th hour. And so having someone just kind of, you know, bring everything together, especially for the buyer, knowing that, you know, this deal is, let's just call, you know, proper due diligence has been done, legality issues have been cleared. That's crucial to making an acquisition go through, because without it, any, any moment a buyer can pull out. And a big reason buyers pull out is, you know, they start to see something that, you know, doesn't add up or there's just something that just seems like it's going to be too much of a headache. So getting in front of that is probably my best advice. And if you are selling for, you know, seven figures or above, definitely lo in legal counsel as quickly as possible.

And if it's, I mean, even better, they don't necessarily represent you. But even if the acquiring company has counsel in house, so you can save on a lot of that speculative work, like you said, stuff that does fall through, you're not left on the hook. Or even better, if you can just put that in loi where like, the acquirer company is doing their deals, that'd be an ideal situation for us. The other company, the acquirer company had legal counsel in house. And so it was, you know, it was a straightforward process until we had to bring in our attorney companies. But they drafted all of the language. And so we just hit contract, which probably saved me 90% of our legal bill for the transaction.

Nice. What was your legal bill? I can ask. You can just say like ballpark or you can say no comment.

So we were replied at Wilson C. Well, this is just a contract review. So it wasn't like they didn't draft any legal form. So it was a good situational.

Nice. I had.

I'll say it was only. It was only five figures as opposed to what could have been, you know, very, very high figure. Five figures, low, six figures for sure.

Yeah. Mine was 100, like 70,000. But we hired like Pillsbury and they did they. Yeah, it was over a thousand hour. And they told me one time, and this is a funny, dumb tidbit, I sold. This is a company I sold. I was 29. So they told me, like, every time you email us, we have to bill you for 15 minutes and it was a Friday night and I just was on my phone and I just replied back in four emails like, bang. Thank you for letting me know just because I thought it was funny, but it ended up costing me like a grand to do that. But, but wrapping this up, this. Jess, this story has been awesome. I, I guess if you had, you know, going through all this, like, you know, I, I love just the story of what you build and how you, you were able to weave this into, you know, a successful acquisition. If you had to give just three pieces of advice to founders, you know, looking to get acquired there. Well, what do you think those would be?

Break down the most valuable assets of the business and then kind of talk to friends that are not a part of your day to day and kind of talked about those assets in particular, like when we broke down like our Instagram account, 600,000 people, like, that's valuable to a brand. And either we're going to piecemeal this and sell it off individually or we're going to find a buyer for everything. Fortunately, we did find a buyer for everything. Everything. But all of your assets individually are worth something and probably the premium to buying everything together, unless you can find that perfect buyer. We were lucky. We found someone who wanted all everything. But if you're in a situation where you're ready to sell, you could probably find a premium for every different asset that you find. So number one, I'd say is break down those assets, determine a value for them as far as they could add a premium and then potentially go find buyers for individual assets that way. Number two is probably go in person, you know, talk to biz dev people in person. It's their job to scout acquisitions. So like, they want to do partnerships, they want to buy. Like, go talk to them.

Yeah. And they're putting their neck out on for you. So like, you know, I, there's a, there's a quote that one of my mentors said maybe, well, fuck it. It's my podcast. He said it's really hard to over a person when you've shaken their hand. I don't know how many people would agree with that, but he would always tell me that he's like, go meet him. Like, trust me, Like, I always, like, I always say it's really, it's really hard to fuck over a person that you've just met in person. Like, there's just something about sitting down together, you know, just really like getting to know the person can actually really. It's the same with enterprise sales you know, getting the trust of that person because it's, that's sometimes what they're really leaning on the most is trust.

If you're in a position where you're thinking about selling your company, you're in a really good spot. Like you made it so much further than most entrepreneurs that just have to wind down operations. You mean like if you've built something that you think is valuable enough for someone to actually pay you money or equity in order to buy that thing, congrats to you. Like go find those business development people that are excited about what you built and want to either integrate it or just learn how you built it and then brainstorm together. But yeah, number two is definitely going person and then number three is don't be afraid to, you know, spend the sweat equity or the design equity. Do custom decks for people work where you really just spell it out for em, like don't think that they're going to be business development people are not necessarily like just spell it all out for them. Understand their business goals and what they were trying to do as much as you understand and just say this asset that I own is going to fit in like you said Andrew, as a puzzle piece into what you're already, it makes so much sense. You know, it's not, you're not a snake oil salesman. Like it's a win win. We want to put bring everything cohesive.

Yeah.

One plus one that your customer.

One plus one equals three. Those are the best acquisitions.

That's right.

Right on. Well Jess, what are you up to now? That's kind of final question.

So I have a, I have a four year burnout with the acquired company so I'm working for them As a tip in I'm, I'm doing a Christmas market. If my dad, you know, we love Christmas so we're doing that as well. But nice for the acquiring company. Yeah, just having fun. But for the acquiring company, you know, they're building a AI powered trading platform platform that will rival the largest online brokers brokerages that exist today. And they are interested in our proprietary data sets, even in our user interface designs that we built for all of those platforms. We can repurpose probably 80% of that to their solutions that they're building. So Andrew, I've completely pivoted. I am away from film and TV and now to where, you know, I'm not a registered, you know, burger, but definitely bringing everything I've learned through five years of going through this startup into go to market strategies for trading platforms now. So learning every day. But that's kind of what's fun about being an entrepreneur is you get to consistently change. And, you know, I think that's. That's one of the most exciting things about my journey so far.

That's awesome. I mean, I think what I'm thinking right now is, you know, don't fall in love with your startup idea because 90% of the time it's going to change in some way, shape or form. And I love how just your, your journey started here and then you found, you know, B2B play, weaved it into a successful acquisition. So congrats again, Jess. That's. I'm rooting for you, man, and I'm looking forward to seeing what you do, you know, after your earn out.

Yeah, well, I appreciate that. And you guys sent me a T shirt that I wear proudly. So it's been a pleasure chatting with you and continue to learn. So again, thank you just for having me on.

Yeah, thanks for the chat, Jess, and best, best of luck with everything. Thanks for sharing all this. I. I really enjoyed this con conversation and just everything you shared from just build it to just ship it, then refine it, and then when things aren't, you know, going correctly, be, be open to pivoting and then just the breakdown of how you sold the business I thought was excellent. So thank you for coming on the podcast. All right, man, take it easy.