Startup Acquisition Stories with Kevin McArdle, CEO of SureSwift Capital

Foreign.

I am super excited for this one. I'm here with the man, the myth, the legend, Kevin McGardle, the founder of Sureswift Capital. I don't really think he needs an introduction, but by far one of my favorite private equity firms in the space. Or holding company. Whenever you. How would you describe Searchlift, Kevin?

Yeah, so we prefer the term holding company. And I like to steal from one of my friends. Brent, be sure put in his annual letter something that resonates with us too. He says calling us a private equity firm is like calling an ostrich a bird. While factually correct, it doesn't really fit the spirit of the word. So technically, we're a private equity firm, but most of what people know about pe, which is buy load with debt, strip out expenses, and then flip to the next size buyer, we don't do any of that. Um, we don't plan to liquidate our funds. So, yeah, I just prefer software holding company.

Nice. So how many companies have you acquired up to this point?

46 over the last seven years.

How are you as of recording? How are you holding up? That's insane.

So I've got a great team. Like, there have been points where the wheels kind of felt like they were coming off the car because we either acquired too fast or we didn't hire fast enough or, you know, made some mistakes in acquiring, and then that. That doesn't feel good. And actually, so we. We started very small. Our size of check has risen over the last seven years, and we're currently operating, I think, 30 businesses. So we've sold some of the smaller ones. We've sold some ones that didn't work out. And most importantly, we started to divest. Right now we're squarely focused on bootstrapped B2B SaaS. And early days. We. You weren't at Chico State for the education. You were there. It's not like whatever. Whatever grade you were getting in your US History class was even less relevant than for most people because you knew you were already on the right path. Right. Did you ever consider just like, dropping out completely? Cause what's the point? Or then you don't get invited to the party.

No, because I needed the financial aid to pay rent, so. So that was my whole plan. Going in was like, all right, I got five years to figure this out. Or actually, it started with four years. But then I started a company called Business Apps. Was like a do yourself, no COD app builder. That started to really take off my senior year. And so I went a fifth year and the irony is I took a minor in entrepreneurship, didn't go to any of the classes. And I remember I would show up to some of the classes just to play around with the teachers and be like, hey guys, I just want to let you know, again, I'm not going to be able to attend. I have a business that I am currently working on. But have fun learning how to run a business. And the teacher love Professor. The teacher loved it. He was like, that's what. So Chico State does have a pretty good entrepreneurial department and I, I'm forever grateful for them. But anyway, story for, for another time. But my, my next question would just be, you know, you look at, I, I, how many deals you look at like a month?

Yeah, we actually, you must not be. Well, let me back up hundreds. And we actually document it for our investors. Like, just, they think they like the notion of like, okay. And it's like five months. So in, you know, recording in February, we just put out a letter for everyone that says in January we looked at X number of deals and let's. It was probably 153 or something like that. The, you know, the only ones that made it through the first filter were these 30. And we're down to like actual investigation on these five and may have a chance of going to a letter of intent. So we actually publish all that for our investors.

So how do you evaluate those startups? Like, what's kind of like your sweet spot in terms of like what gets it over the finish line?

Yeah. So from like top of funnel down, you know, it's gotta be SaaS, it's gotta be profitable. We like writing checks between 1 and 10 million dollars. So those are three pretty quick filters if you're too small or too big. You know, we still get inbound interest from people trying to sell like digital marketing agencies. And I love that you can see it's super healthy. Nothing wrong with running an awesome digital marketing agency. It's just not something we would buy. And so then you start looking at more of the details of like, okay, what, what niche is it in? Is it something we understand is the, you know, we're pretty tech stack agnostic, which other people have criticized me, is like, oh no, you should niche into just one thing so you can hire all the developers for that thing. And while I understand that strategy that would have limited the number of things we could buy. And then you're kind of tied to a stack, which I don't really want to be tied to a stack. We're industry Agnostic. Then you just get into the sort business fundamentals like, is it a market we like and that we can understand and is it something that we think can continue to grow? Is there a team that's there? And that's not a yes or no criteria. It's just like, what value do we place on this thing? If it's a solo founder with no team and no plan, and if they're gone, the business is hosed, well, that's a problem. But if it's somebody, a founder who's built up a team and they're ready to step out, then that adds value to the business. Yeah, just the usual. I mean, beyond that, there's not a lot of secrets or, you know, special sauce. Andrew. It's just like, is it a healthy business that we want to own forever? And you know, that's the typical questions that Microacquire guides people on.

Yeah, that's usually like, I hate the question of like, my SaaS business is making 50k a month. What is it worth? And there's so much variability into that. Like, like what are your customer count? Like quality of customers churn market quality of team, quality code.

Like my answer to that would be it's somewhere between zero and $5 million.

It's like I always say, my, my answer that is like, that's kind of like asking what's, how much does a car cost? Like, is it a Ferrari? Is it a, you know, or is.

It on blocks in the front yard?

Yeah, like there's so much variability. So that's a great answer, I guess. Moving to another question I'd love to ask you is what's your favorite acquisition that you've done at sureswift? And then I want to know also your favorite micro acquirer acquisition, if you're willing to share that as well.

Yeah, well, I'll share both, but I don't like the word favorite. And it's, you know, like you got.

A lot of kids, so you can't pick a favorite.

Yeah, I also, I was trying to think of a different example because I actually have children and I don't like comparing businesses that I own to my children because there's like a. I love my children way more than any of our businesses. But yeah, it's hard to. It's hard to pick a favorite because there's things to like about all of them. Two, two that are, are cool stories. Let me put it that way. We own two sister companies. One is called MailParser, one is called Docparser, and We. They were created by the same founder. His name's Moritz Dausinger. And we tell the full story on our blog if people want to learn more about it. But part of what I love about those businesses, it's been a really successful acquisition. Like, that's, you know, it's hard to love a business where you're losing money or it's a failure. And we've had some of those, too. So it's been a big success story. We bought them separately, so we bought Mailpurser first, and Doc Parser existed, and Moritz was working on that, and I tried to wrap both into the same deal, and Moritz was like, no, no, I'm not selling DocParser because it's going to be worth more someday. And so we worked into the contract, like, first writer refusal agreement, where, like, if he'd wanted to sell Doc Parser, he was obligated to at least let us know. But the cool part of the story is, like, we. We became friends. We stayed in touch. We had been operating MailParser for, I think, like a year and a half, and Maritz and I were just talking on the phone, and it was sort of like he. He said, he's like, kevin, I think we both know how this ends. Like, you're going to want to acquire Doc Parser because it's. It's going to be just as successful as Mel Parser. And he's like, I'm going to want to sell it to you because the first transaction was a home run for everybody. But he's like, the longer I held onto it, the more Val it's going to get. And, like, so, you know, kind of, what do we do? And I'll skip to the end of the story. We worked out a deal that was, like, really good for both parties. He left really happy. He's on to now his third, actually, his third project that I know about. He's got other startups, the predated Mail Parser. We're super happy we've been able to create jobs for now, like, 15 people. And it started with, like, you know, two and a half. And so just a home run all around. And my favorite part, I just saw Moritz in October in Mexico City, and we were just, like, laughing and sharing a beer and, like, he's become a friend. And so, like, from every angle, it's just a wonderful deal. Do you know what I mean? Especially the personal connection and just about every other business that we have. There's something missing from the story that I just told you. Not, like We've done a lot of really good deals where we're tight with the founders and everybody's happy, but not quite to that degree of, like, awesomeness stacking on top of itself.

Nice.

From a. And so that was long before Microacquire ever existed. Except for maybe in your head.

I've. I've heard that. I've actually read that story. And when I read it, I was like, that is badass.

Have you. Yeah. Cool. I'm glad you saw it, because I.

Follow him on Twitter as well.

Yeah, well, you. You missed out on founder summit. You would have been sitting at a table with us having a beer, but you had to. You had to bail at the last minute, remember? Yeah, that was why we were together.

Yeah. I would have given you Covid.

Yeah.

Okay.

I forgot why. I figured it was something like.

Yeah, I was. I was, like, exposed, and I didn't want to risk being in quarantine in a week for, I think it's two weeks or something like that, but.

Yeah.

Yeah.

Well, there's a risk you would have flown down there. Like, we tested everybody, and if you were positive, you could vent. So next time, you and me in Moritz can all sit down and have tell business stories. But back to your question.

Team quality code.

Like, my answer to that would be, it's somewhere between zero and $5 million.

I always say my answer to that is, like, that's kind like asking, what's. How much does a car cost? Like, is it a Ferrari? Is it a. You know, or is it on blocks.

In the front yard?

Yeah, like, there's so much variability. So that's a great answer, I guess. Moving to another question I'd love to ask you is, what's your favorite acquisition that you've done at sureswift? And then I want to know also your favorite microacquire acquisition, if you're willing to share that as well.

Yeah, well, I'll share both, but I don't like, like, the word favorite. And it's, you know, like, you got.

A lot of kids, so you can't pick a favorite.

Yeah, I also. I was trying to think of a different example because I actually have children, and I don't like comparing businesses that I own to my children because there's like a. I love my children way more than any of our businesses. But, yeah, it's hard to. It's hard to pick a favorite because there's things to like about all of them.

Two.

Two that are our cool stories. Let me put it that way. We own two sister companies. One is called MailParser, one is called Doc Parser and we, they were created by the same founder, his name is Mar Dowsinger. And we tell the full story on our blog if people want to learn more about it. But part of what I love about those businesses is it's been a really successful acquisition. Like that's, you know, it's hard to love a business where you're losing money or it's a failure. And we've had some of those too. So it's been a big success story. We bought them separately, so we bought Mailpurser first and Docpurser existed and Moritz was working on that and I tried to wrap both into the same deal and Moritz was like, no, no, I'm not selling Doc Parser because it's going to be worth more someday. And so we into the contract like a first rate refusal agreement where like if he'd wanted to sell Doc Parser, he was obligated to at least let us know. But the cool part of the story is like we, we became friends, we stayed in touch. We had been operating Mailparser for I think like a year and a half and Maritz and I were just talking on the phone and it was sort of like he, he said, he's like, Kevin, I think we both know how this ends. Like, you're going to want to acquire Doc Parser because it's, it's going to be just as successful as Mel Parser. And he's like, I'm going to want to sell it to you because the first transaction was a home run for everybody. But he's like, the long held onto it, the more valuable it's going to get. And like, so, you know, kind of what do we do? And I'll skip to the end of the story. We worked out a deal that was like really good for both parties. He left really happy. He's on to now his third, actually his third project that I know about. He's got other startups that predated Mailparser. We're super happy we've been able to create jobs for now like 15 people. And it started with like, you know, two and a half and so just a home run all around. And my favorite part, I just saw Moritz in October in Mexico City and we were just like laughing and sharing a beer and he's become a friend. And so from every angle, it's just a wonderful deal. Do you know what I mean? Especially the personal connection and just about every other business that we have, there's Something missing from the story that I just told you. We've done a lot of really good deals where we're tight with the founders and everybody's happy, but not quite to that degree of awesomeness stacking on top of itself.

Nice.

And so that was long before. Before Micro Require ever existed. Except for maybe in your head.

I've. I've heard that. I've actually read that story. And when I read it, I was like, that is badass.

Have you. Yeah. Cool. I'm glad you saw it.

Cause I follow him on Twitter as well.

Yeah, well, and you. You missed out on founder summit. You would have been sitting at a table with us having a beer, but you had to. You had to bail at the last minute, remember? Yeah, that was why we were together.

Yeah. I would have given you Covid. Uh, yeah. Okay.

I forgot why. I figured it was something like that.

Yeah, I was. I was, like, exposed, and I didn't want to risk being in quarantine in a week for, I think it's two weeks or something like that. Uh, but, yeah.

Yeah, well, there's a risk you would have flown down there. Like, we tested everybody, and if you were positive, you could vent. So next time, you and me in Moritz can all sit down and have tell, uh, business stories. But back to your question. Uh, again, not my favorite. There's three deals that have at least been listed on Microacquire that we have acquired. And I say three that have been listed because one of them, we actually felt pretty good that we were going to get a deal done. And, well, I'll just tell you, this one's Meet Edgar. So I don't know if you know Laura Roeder. We just announced that we acquired Meet Edgar a few weeks ago, and I've known Laura for four years, and we were kind of in discussion. She reached out to me directly when she was thinking about selling the business. We were talking, doing our diligence, et cetera, and she's like, look, Kevin, I think this has a good chance of us doing a deal, but I have to list it on Microacquired just to see if somebody will, you know, come out of the woodwork and overpay, give me a strategic multiple, whatever. And I was like, I totally understand that. Good luck, you know, and we'll continue talking. And it ended up we. I don't. I think I know she had interest in offers for Michael Acquire, because, like, who doesn't when you list a healthy business? But we ended up doing the deal together, and that's Another one that I'm super excited about, really very highly of Laura but I don't count that as like we didn't find it on Micro Requirements. So I'm not, I'm going to set that one aside. The one that we found on Microacquire, that is my favorite lead dyno and I don't know if you ever like talked to those guys, but it was the reason why I like that business. Not just because it's a super healthy business. And you know, the founders are great people. They went through two processes that fell apart. And I think this is part of when you and I talked in the early days of Microcar. I loved that it was focused on founders and helping founders find and these three guys, Brett, Mike and Carson were business partners for I think like seven years. They decided to sell the their own that I won't get into and they had two prospective buyers that had written them letters of intent and the deal went sour. And I can't remember the details or the reasons why. We talk about this again a little bit in the blog, but it's kind of their business, not ours. And they found us. Well, we found the business through Microacquire. We start having a conversation and you could just feel the like stress come out of their shoulders once we got a little bit into the process and Mike who was leading for the three of them, he's a CEO, once, once we got to a level of trust where we'd had enough conversations he kind of believe were telling him we like the business and you kind of broke through that surface Y layer stuff. We're just talking about the real details. He told us that he had been burned twice and it wasn't through their fault. It's not like the buyers found something in diligence that spooked them. It was just bad buyers. Like is that you say it and he's just like I feel so much more comfortable. Like we've been bitten twice and everybody's spooked that this is going to be a third strike. And I don't know if we can handle that as a founding team. So what I like about it is yes, we've got a great business, we've got a great team that came with it. The founders are happy, but the fact that they went through that turmoil and we provided a safe landing spot for their business and it's a stressful deal to sell a business. Like there's no stress free event where you're selling a business but minimize the stress as much as possible. And just let them know, like, look, we got you. We're not those other people. This is going to be a simple, straightforward, honest transaction. Let's get down to this. And that's, that's, that's why that's our. My favorite from micro require so far.

Nice. I and compliments you also. Nice shirt. I'm wearing your swag as well.

Yeah.

How do I pull it up? There we go. There we go. I mean I've just, I've heard so much just good feedback from buyers and in terms of shortswift and that's, you know, genuine feedback in terms of, you know, Chris on our team. I've interviewed Selena. Everyone is just fantastic over there. So that doesn't surprise me at all.

Yeah. And I got one of the nicest emails ever was somebody telling us he's not going to sell his business to us. And he was like, this has been the greatest experience. I've learned a lot. You've been really good to me and my partner. We've decided, I think they decided not to sell, but they may be selling to somebody else. But it was just such a, it was not about me as a compliment to the team. And they were. Because that's what we care about. That's what we try for, for. You know what I mean?

Yeah.

It's like you getting a email from somebody's like, the micro acquire experience was perfect. And you know, at the end I sold my business. But I care about the founder experience. And I know I just told you we look at 150 deals and we might close one. So 149 people are going to have some sort of a Sureswift experience that doesn't result in selling their business to us. And I care about all those 149 people too. I want them to have a good experience with us. And so, yeah, I'm happy to hear you get that feedback too because we, we, we work hard at a lot.

About it, I guess, you know, moving on to, you know, ways to help founders. Any, like, helpful tips for founders, you know, looking to sell their business this year? Like yellow flags or just things to prepare for, like if they were looking to go to market, like if you had to just give, I'm sure you could give like 20 tips. But if you had to pick like maybe the top, like three, you know, what would you tell a founder aside from having a great business? We all know that one.

Yeah, have a great business is the easiest way to sell business. So I like the simple answer is like, be honest and straightforward. And that, and what that means depends on what stage you are. So like, I tell founders all the time, it's okay to initiate a conversation or talk to somebody like me who buys businesses, even if you don't intend to sell your business for two years or even if you think you may never sell, right? And at the end of the day, like, every business gets sold, right? Or every, every founder leaves their business, whether they sell it or they get put in the ground. So it's okay to have a plan, even if you don't want to exercise that plan for five years. Because I see people at conferences or online or whatever, and it's always this, like, well, I'm not ready to sell my business, but how does it work? Explain to me this or that or like, what happens to the team? You know, we get a lot of the same common questions, and I'm just like, that's fine like you, but you don't need the preamble of, of we're not ready to sell, but it's okay to just like, ask the question, explore. And so in that, in that stage, being open and honest and forthright is just like, look, I don't have a whole bunch of diligence stuff like, we're not going to get into a conversation about like, what's my MRR and my churn or whatever. Like, just set expectations. Like, I just want to understand how your process works. And I'm not, I'm not looking to sell right now, but I want to be more informed for a year from. And then if you are like a little bit more serious to where you might want to list on Micro Acquire, you know, you got to be honest and straightforward, like, have your stuff in a pile, you know, like, have yourself organized. Your, your website, Andrew, tells everybody the questions that they should expect from buyers. It's not a secret. And if you don't have the answers to those questions, like, just wait or get, get those answers written down. Like the, the, the transactions where the founder is ready make everything so much. And it makes me more confident that if they know how to come into this conversation, they probably are doing a good job of planning. So that's kind of that middle stage where you, maybe you're just kind of testing the waters, looking for valuation, but I can't give, like you said, I can't give you some sort of information. And me giving you evaluation is not a commitment to buy and you're not committing to sell. It's just a phase in your journey as an entrepreneur. But Then when you are ready to sell, be prepared for the full inspection of your business. And don't hide anything, because we're probably going to find it. And at some point, you're going to have to let somebody else look at the code to make sure it's not crumbling. And, like, you just got to be prepared for that. And, you know, hiding things or misleading just erodes trust, and it might just mean, like, we walk away. So that's kind of just like, my advice would be be honest and transparent, but understand what stage of the process you're at to know what level of transparency.

Yeah, I like that. I think, you know, I. I did a lot of those things correctly when I sold business apps, the company we were previously talking about, and then incorrectly, before I sold it. Like, one weird thing that I think a lot of founders do, and I did it too, is where you do this dance of like, we're not for sale at all. But, but, but I'm curious, but it's so much easier. And then once I started, you know, building relationships with people in advance like you just mentioned, and saying, look, I'm going to sell this business at one point in time, I want to keep you updated. And I would update buyers almost like, you know, like, you would update investors. Like, keep them, like, hey, we were just featured in this, you know, blog, or we just announced this new product launcher. Here's, you know, kind of how the business is trending. And I would do it, you know, quarterly. And then when the contract time came to sell, it was. It just cut out a lot of the, you know, like, are you serious? You waste my time. Like, you know, so I think a lot of founders, like, don't understand. Like, it's okay to just say I'm looking to sell my business. Like, do you want to have a conversation around that?

Yeah.

Rather than doing this weird dance, hoping to get some crazy multiple.

Well, and I also want to, like, make clear it's also okay to say I want to understand the process so that when I am ready to sell this, I know I understand it better because I'm not ready right now. You know, like, I'm happy to talk to founders all the time just about, like, where are you? Like, what's working, what's not? Can we help? Do I know somebody else who can help? Like, I'm not saying I only want to talk to people when they're ready to sell, but just know which stage you're at and be honest with the person on the other side of the conversation about where you're at. And then that just sets the tone for like, okay, now I know what conversation we're having.

Yeah, I agree with you. I was referring more towards like we would get inbound requests from like strategic. And when I think back I'm like, I should have handled that. Like, yeah, we're open to a conversation. But it was always like a guarded like if you say that like, like you're open to selling it, like devalues you when it really does kind of the opposite sometimes.

That's a good point. I like to think of it as like, everything's for sale and we're on the other end of this. Andrew. So like people, we get inbound interest for our portfolio company, right. Really frequently. And my answer is always like, well, we're not planning to sell it, but everything has a price. So like, you know, we, that's, that's me coming into the conversation. Like, I love this business. I'm not looking to sell it. Sometimes we'll just tell people outright, like, here, here's our current revenue. If it's less than a 10x multiple on the revenue, then we're not interested. And that makes it like, here's, you know, my number. And you know, I know you got a due diligence, like, can you get to that number or not? But I'm saying, like, if that's out of the ballpark for what we're talking about, then let's just not, you know, waste each other's time. There's a way to handle it with. And I'm being like super direct in this conversation. I might like massage it a little bit with the actual conversation. But yeah, it's totally okay to say like, let's have a conversation.

Yeah, I agree with that. And I guess, you know, a follow on to the point I was making was just the lack of education in terms of like how to position your business to be a traffic because, you know, you look at a lot of businesses and when you're talking to a corp dev team or something like that, they are also looking at a lot of businesses and getting inbound requests. And so if you do this weird dance where you're like really held off, at least this is just my experience, it tends to push off the buyer because they can't tell if you're serious or if you're waste just wasting their time. So I always just like going back to your first point is just being honest. Like, where are you at your stage? What are you looking for? Is it advice you're looking to sell your business, you're looking to just kind of, you know, test the waters, like, where is my valuation at? So that's, that's really good advice and I guess any, any. Anything else you'd add to that.

Yeah, I, Part of what I love about Microacquire is that, you know, it's tended for founders to help them be successful. And I think at some point of growth or stage of a business, it's part of your obligation as the founder, whatever title you want to give, to start thinking about whether you have investors, you've got a co founder, you've got a team, or what. Even just for yourself personally, this is part of the evolution of being an entrepreneur. You need to understand what it's like to sell a business even if you're not in the market right now. So it's going beyond what you're saying. Andrew, what I wanted to add is like, it's good to educate yourself. And I'm almost like you're obligated to educate yourself so that you're ready for that evolution of the business because unfortunately, sometimes it comes quicker than we're ready. And we've seen a lot of situations where people, people are sort of forced to sell their business for one reason or another. And if you haven't at least thought about these things, haven't had a couple of conversations, haven't like, documented the things you're going to document, going to sell at a discount.

Yeah, I think, you know, I, I think back of my, my younger days and I used to just think, you know, getting acquired was like GoDaddy showing up with a check, being like, hey, welcome to GoDaddy. Like we're, we're going to acquire you. But yeah, just understanding, just like, you know, the more you know about like an acquisition process, the higher your chances of successfully closing a deal. So I totally agree with you on that. So, moving on to just like the final questions. So we've had a crazy year in terms of, you know, M and A activity, 2022. It's hard to predict the future. Any sort of like, thoughts on maybe what's next for SureSwift? What next for the industry, Upcoming industry trends? What's something that maybe you'd make a bet on? Could be a growth goal for sureswift, it could be the market. Just any sort of unique industry insight that you might expect to play out this year?

Yeah, that's a tough question. I'm not a gambler, so I don't like me. So the, the, the simplest Question to answer because I know the most about it is like, what's in store for sure. Swift and I, you know, it's been seven years and we've done a whole lot of things wrong and there's a whole lot of things we can still improve upon. That said, like, I'm so confident in our team, our process where we sit in the market. I, I, I'm like, we are just going to not be distracted. I feel like we are one of the best, if not the best company in the world to acquire bootstrap B2B SaaS businesses between 1 and $10 million in value, full stop. Let's just do more of that, better at that. And by more, it doesn't necessarily have to be more deals, but there's like more of the right deals is all I want to think about. And every, like I said, every once in a while something comes in that looks shiny and different and cool and would be a wonderful business to own. And I'm like, nope, no distraction. So I think that's what you'll see from us is like nothing super, you know, different or you know, other people might say not that interesting. We're just going to keep being, being awesome at what we're already good at. As far as the market, I mean, you're better to answer that question, just have a different lens and you see it from so many different angles, like founders, you know, buyers and investment vehicles and things like that. I'll tell you, I'll tell you something I worry about and I would like to get your perspective, turn questions around. Part of the greatness of Microacquire is it's brought, it's made process here for founders, it's made deal flow easier for prospective buyers and that creates a super healthy market. My concern is that I know there are bad actors in this just in the world, but in, in, in the buying and selling of, and I worry not for the health of microcar, but like, I don't know, I don't know how to phrase it, Andrew, but like, I worry that that's there's going to be bumps in the road here as, as our industry continues to evolve. And I'm super bullish like long term, but I worry about like short term that not everybody knows that there's, there's bad actors and not everybody has felt the sting of like doing a bad deal. Sort of like I was listening to somebody talking about just investing in general and we've been on the longest bull run of, of your and my lifetimes right and literally have heard investors say, I don't really know what a downturn looks like because I haven't lived through. And we've, you know, we've had 08 and all this, but like, in general, everything's up and to the right. And I worry that in our space nobody's seen like a big failure. Not enough people have seen failure that everybody thinks this is. Maybe that's what I. The simple way to put it, your marketplace, you know, people like us, others documenting, here's how I did it, here's the success. You buy a great business, you do the right things, that business should continue to grow and not there's not enough. It almost makes it look. And I worry that too many people are going to step into this with either their own money or other people's money, thinking it's easy and get hit by a train. Is that something that you see or worry about or am I just like.

I mean, you could also say, you know, anyone who starts a startup is an idiot because the success rate is, you know, 10%. You know, if, if anything, I would say I'd go back to some of your previous points where you acquired companies and it didn't work out. You know, sometimes, you know, so if you're worried about people buying a company and not working out, you know, that's part of the process of like, I've failed so many times to be successful at stuff that I do. And I think that's a part of the reason that you're successful. So, I mean, yeah, I think people are getting a little fast and loose, but I don't think it's a concerning problem to the point where it's like, hey, just buy Bitcoin. Like, just buy Bitcoin, you know. You know, you can make that sort of argument against any sort of investment, whether it's starting a new business, whether it's buying cryptocurrencies, whether it's buying an NFT or something like that, angel investing. So, yeah, I mean, I think just the more education that we create where we educate, you know, both buyers and sellers on, you know, how to properly do an acquisition, like, what is your plan post acquisition? I think that's how the market will mature and then really will grow and bring more opportunities to founders looking. Because what I think is going to happen is for the past two years we've just had, let's call it 100 PE firms that would be willing to buy sub. It's called 20 Million Businesses. And I think with the right tooling and the right guidance and even through advisory services that we provide within micro requirement. So you can hire an M and a advisor, you can hire a due diligence expert, you can hire someone for valuations, you can hire an attorney. And I think the more that we equip people to essentially create their own private equity firms with all the tools that people kind of like yourself had to put together over, you would have.

Flown down there like, we tested everybody. And if you were positive, you could vent. So next time, you, you and me and Moritz can all sit down and have tell business stories. But back to your question again, not my favorite. There's three deals that have at least been listed on microacquire that we have acquired. And I say three that have been listed because one of them, we actually felt pretty good that we were going to get a deal, you know, a.

Period of seven years. I think we can reduce that risk. But yeah, I mean, there's, there's always a bad angel investment. There's always a startup that fails. There's always an acquisition that goes south. There's done. And.

Well, I'll just tell you, this one's. Meet Edgar. I don't know if you know Laura Roeder. We just announced, announced that we acquired Meet Edgar a few weeks ago. And I've known Laura for four years, and we were kind of, I think.

It was a founder of Cisco that said one out of three acquisitions that they would do would fail. So even at the top, you know.

In discussion, she reached out to me directly when she was thinking about selling the business. We were talking, doing our diligence, et cetera, and she's like, look, Kevin, I think, I think this has a good chance of us.

So just a disclaimer for people listening to this. Acquisitions are hard. You know, they're, they're not easy. Number one, you need the capital. Two, you need to know what you're doing in terms of if you don't have any experience in SaaS and you're acquiring a bunch of SaaS, companies, like, it's going to be a big learning curve, but you are kind of skipping over, you know, the product market fit stage. So I always work doing a deal.

But I have to list it on micro acquired just to see if somebody will, you know, know, come out of the woodwork and overpay, give me a strategic multiple, whatever. I was like, I totally understand that. Good luck, you know, and we'll continue talking. And it ended up we. I don't, I think I know she had interest in offers for Michael Acquire. Because like who doesn't when you list a healthy business. But we ended up doing the deal together and that's another one man.

Start small. Like, hopefully like if someone acquires a company, it doesn't work out. It's on the smaller end. But candid opinion. No, I, I don't, I don't see it being an issue issue. I think, I think the bigger issue is probably just founders selling their companies for too cheap and using advisory services that charge too much. What's your take on that?

That was one of the. When you first told me about MicroCard, that was the killer feature for me. After you kind of laid out the vision of what you were trying to build, I was like, I don't want to be a broker in five. But especially in, in our space with like SaaS and online, they charge heft and I'm not sure they deliver. And I know lots of brokers in this space have done business with lots of brokers. They're good people. It's a reasonable business model. But your business model puts so much power and that I'm super excited about really very highly of Laura. But I don't count that as like we didn't find it on Microacquire. So I'm not, I'm going to set that one aside. The one that we found on Micro Acquire, that is my favorite lead dyno. And I don't know if you ever like talked to those guys, but it was the reason why I like that business. Not just because it's a super healthy business and the founders are great people. They went through two processes that fell apart. And I think this is part of when you and I talked in the early days of Microcar. I loved that it was focused on founders and helping founders find. And these three guys, Brett, Mike and Carson were business partners for I think like seven years. They decided to sell the business for their own that I won't get into. And they, they had two prospective buyers that had written them letters of intent and the deal went sour. And I can't remember the details or the reasons why. We talk about this again a little bit in the blog, but it's kind of their business, not ours. And they found us. Well, we found the business through Microacquire. We start having a conversation and you could just feel the like control in the hands of founders at a way lower price and be free. Right. Like the true. You can still list and sell a business that microacquire for free versus was a huge percentage. Yeah. So stress come out of their shoulders. Once we got a little bit into the process and Mike, who was leading for the three of them, he's a CEO. Once, once we got to a level of trust where we'd had enough conversations, he kind of believed what we were telling him. We like the business and you know, kind of broke through that surfacey layer stuff. We're just talking about the real details.

Yeah.

He told us that he had been burned twice and it wasn't through their fault. It's not like the buyers found something in diligence that spooked him. It was just bad buyers. Like is that you say it? And he's just like, I feel so much more comfortable. Like we've been, we've been bitten twice and everybody's spooked that this is going to be a third strike. And I don't know if we can handle that as a founding team. So what I like about it is yes, we've got a great business, we've got a great team that came with it. The founders are happy, but the fact that they went through that turmoil and we provided a safe landing spot for their business and a as it's a stressful deal to sell a business. Like there's no stress free event where you're selling a business, but minimize the stress as much as possible and just let them know like, look, we got you. We're not those other people. This is going to be a simple, straightforward, honest transaction. Let's, let's get down to this. And that's, that's, that's why that's our my favorite for micro require so far.

Nice I and compliments you also. Nice shirt. I'm wearing your swag as well.

So. Yeah.

How do I pull it up? There we go. There we go. I mean I've just, I've heard so much just good feedback from buyers and in terms of shortswift and that's, you know, genuine feedback in terms of, you know, Chris on our team, I've interfaced Selena. Everyone is just fantastic over there. So that doesn't surprise me at all.

Yeah. And I got one of the nicest emails ever with somebody telling us he's not going to sell his business to us. And he was like, like this has been the greatest experience. I've learned a lot. You've been really good to me and my partner. We've decided, I think they decided not to sell, but they may be selling to somebody else. But it was just such a, it was not about me as a compliment to the team and they were. Because that's what we care about, that's what we try for. You know what I mean?

Yeah.

It's like you getting a email from somebody's like the micro acquire experience was perfect. And you know, at the end I sold my business that I do think that is a will continue big trend that we see. And back to your earlier point, like I guess it's, there's inherently risk and we all know this. I just hate seeing people like fail when they weren't going into it. Eyes wide open and. But it's not, that's not my problem to solve. And I think you're right. Like if you're educating people and trying to help people along the path of like here's the things to do to I care about the founder experience and I know I just told you we look at 150 deals and we might close one. So 149 people are going to have some sort of a sureswip experience that doesn't result in selling their business to us. And I care about all those 149 people too. I want them to have a good experience with us. And so yeah, I'm happy to hear you get that feedback too because we, we work hard to lower your chances of failure or at least understand the risk that you're seeing. Like that's all, that's all you can do a lot about it, I guess.

You know, moving on to, you know, ways to help founders. Any like helpful tips for founders, you know, looking to sell their business this year? Like yellow flags or just things to prepare for. Like if they were looking to go to market. Like if you had to just give, I'm sure you.

And all I can do is like tell people here's my experience, here's some things to look out for, here's some ways I've failed. Like try not to do those things. You know, go invent all new ways to fail. But know that failure is part of the deal when you're, you know, running a business. So yeah, I like, I like your, I like your lens on it. It's just like that's, that's could give.

Like 20 tips but if you had to pick like maybe the top like three, you know, what would you tell founder aside from having a great business? We all know that one.

Yeah, have a great business is the easiest way to sell a great business. So I like the simple answer is like be, be honest and straightforward. And that, and what that means depends on what stage you are. So like I tell founders all the time it's okay to initiate a conversation or talk to somebody like me who buys businesses even if you don't intend to sell your business for two years or even if you think you may never sell, right? And at the end of the day like every business gets sold, right? Or every, every founder leaves their business whether they sell it or they get put in the ground. So it's okay to have a plan even if you don't want to exercise that plan for five years. Because I see people at conferences or online or whatever and it's always this like, well I'm not ready to sell my business, but how does it work? Explain to me this or that or like what happens to the team? Team. You know, we get a lot of the same common questions and I'm just like, that's fine like you, but you don't need the preamble of we're not ready to sell, but it's okay to just like ask the question, explore. And so in that, in that stage, being open and honest and forthright is just like, look, I don't have a whole bunch of diligence stuff like we're not going to get into a conversation about like what's my MRR and my churn or whatever. Like just set expectations like Jen or talk to somebody like me who buys businesses. Even if you don't intend to sell your business for two years or even if you think you may never sell you right Then at the end of the day like every business gets sold, right? Or every, every founder leaves their business whether they sell it or they get put in the ground. So it's okay to have a plan even if you don't want to exercise that plan for five years. Because I see people at conferences or online or whatever. I just want to understand how your process work. And I'm not, I'm not looking to sell right now, but I want to be more informed for a year from. And then if you are like a little bit more serious to where you might want to list on Micro Acquire, you know, you got to be honest and straightforward like have your, your stuff in a pile, you know, like have your self organized your, your website. Andrew tells everybody the questions that they should expect from buyers. It's not a secret. And it's always this like, well I'm not ready to sell my business, but how does it work? Explain to me this or that or like that's the deal with startups.

Like you can't just high, a high risk.

A high risk deal.

Yeah, you know there's, there's no. I mean this would be a funner longer.

And if you don't have the answers to those questions, like just wait or get, get those answers written down down like the, the what happens to the team? You know, we get a lot of the same common questions and I'm just like, that's fine like you, but you don't need the preamble. The transactions where the founder is ready make everything so much. And it makes me more confident of we're not ready to sell, but it's okay to just like ask the question, explore. And so in that, in that stage, being open and honest and forthright is just like, look, I don't have a whole bunch of diligence stuff like we're not station.

I'm just like how to, how to de Risk acquisitions or how to de risk even that if they know how.

To come into this conversation, they probably are doing a good job of planning.

So that's kind of that launching a startup, you know, there's, there's so much education out there, middle stage where you.

Yeah, maybe you're just kind of testing the water, just looking for valuation, but I can't give like you said.

And I think that's where it really starts is learning from other people's failures and mistakes. And I think the more that people share those publicly, the more they can help other people not make those same mistakes. Because a lot of the mistakes, I.

Can'T give you evaluation without some sort of information. And me giving you evaluation is not a commitment to buy. I couldn't get into a conversation about like what's my MRR and my churn or whatever. Like just set expectations like, and you're not committing to sell. It's just a phase in your journey as an entrepreneur. But then when you are ready to sell, I just want to understand how your process works. And I'm not, I'm not looking to sell right now, but I want to be more informed for your mistakes that.

I see with startups or, you know, know, acquisitions. I haven't really heard too many in terms of acquisitions aside from, you know, code being off.

And then if you are like a little bit more serious to where you might want to list on micro acquire, you know, you gotta be. Be prepared for the full inspection of your business and don't hide anything because we're probably gonna find it and at some point you're gonna have to let somebody else look at the code to make sure it's not crumbling. And like you asked and Straightforward like have your stuff in a pile, you know, like have your self organized whole.

Had to rebuild, you know, the code base, stuff like that. But you know, that stuff being shared like the common pitfalls of an acquisition, you know, people can learn, just gotta.

Be prepared for that. And you know, hiding things or misleading just erodes trust. Your, your website, Andrew, tells everybody the questions that they should expect from buyers. It's not a secret. It might just mean like we walk away. So that's kind of just like my advice would be be honest and transfer transparent but understand what stage of the process you're at to know what level of transparency.

Yeah, I like that. I think.

And if you don't have the answers to those questions, like just wait or get, get those answers written down like.

The, the, you know, I, I did a lot of those things correctly when.

I saw the transactions where the founder is ready make everything so much and it makes me more confident that if they know how to come into this conversation they probably are doing a good job of playing anyone.

So that's kind of that old business apps, the company we were previously talking about and then incorrect from that and then avoid those mistakes. But yeah, with any sort of investment or any sort of, you know, entrepreneurial endeavor, there's a very, very high risk of failure. It's literally you have, you know, at.

Middle stage where you maybe you're just kind of testing the waters, looking for valuation, but I can't give like you.

Said exactly before I sold it. Like one weird thing that I think a lot of founders do, and I did it too is where you do this dance of like we're not for sale at all.

Ye.

But, but I'm curious, but it's so much easier. And then once I started, I can't.

Give you evaluation without some sort of information. And me giving you evaluation is not a commitment to buy and you're not committing to sell. It's just a phase in your journey as an entrepreneur. But then when you are ready to.

Sell a 10% chance of success starting a business, I would argue your success, your chances of success when acquiring a business is probably higher because you're skipping over, you know, know some of the hardest parts.

Be prepared for the full inspection of your business and don't hide anything because we're probably going to find, you know.

Building relationships with people in advance like you just mentioned and saying look, I'm, I'm going to sell this like finding customers and product market fit and then you might be using like you might budget 50k and I have friends who, you know, go up to like 150k and they still aren't there. Business at one point in time I want to keep you updated and I would update buyers almost like.

And at some point you're going to have to let somebody else look at the code to make sure it's not crumbling and like you.

So probably, probably, like we could probably talk about that for a while. But I get what you're saying in terms of, you know, as the buyer pool increases, not all of them are going to be, you know, as sophisticated and as experienced as yourself. And so at Microquire, what we're trying to do, you know, like you would update investors, like keep them like, hey, we were just featured in. There's built tools that help with things like, like you have a due diligence team, like other people don't.

Like what gotta be prepared for that. And you know, hiding things or misleading just erodes trust and it might just mean like we walk away. So that's kind of just like my advice would be be honest and transparent but understand what stage of the process you're at to know what level of transparency.

Yeah, I like that. I think if there was tools for due diligence or what if there was, you know, tools that basically automated, you know, the legal documents, document creation or you know, allowed you to, you know, find an advisor to help with, you know, the whole process like when you need it. Just to point out any yellow flags you might, you know, I, I did a lot of those things correctly when I'll be catching. So yeah, awesome.

I think it's a huge service to the whole industry.

Bold business apps, the company we were previously talking about and then increment is this, you know, blog or we just announced this new product launch or here's, you know, kind of how the business is trending. And I would do it, you know, quarterly. And then when the time came to sell it was it just cut out a lot of the, you know, like, are you serious? You wasting my time. Like, you know, so I think a lot of founders like don't understand. Like it's okay to just say I'm looking to sell my business.

And you're like, if the chances of failure of a startup are 90%, the chances of failure for an acquisition up.

Before I sold it. Like one weird thing that I think a lot of founders do, and I did it too is where you do this dance of like we're not for sale at all.

Position should be way lower or chances of success Be way higher depending on. But. But it's never going to grow. The thing about an acquisition is like, you still have the, like just life and business is unpredictable and risk.

Like, do you want to have a conversation around that?

Yeah.

Rather than doing this weird dance, hoping to get some crazy.

But in terms of like, wrong price, tech blowing up on you, team issues that you didn't know about.

Multiple.

Well, and I also want to like, make clear it's also okay to say I want to understand the process so that when I am ready to sell, I know I understand it better because I'm not ready. Right. Legal issues, you know, the contract things. There's. There's a but I'm curious.

But it's so much easier. And then once I started, you know, building relationships with people in advance like you just mentioned, and so saying, look, I'm. I'm gonna sell this relatively.

It's not a short list, but there's a list. It's a countable list of things that are the predictable things that go wrong in a business of, you know, a certain size and, you know, people like you business.

At one point in time, I want to keep you updated and I would update buyers almost like people like me.

Can share to the world and others. Like, here's our take on that list of things and here's what we look.

At in our, you know, like, you would update investors, like, keeping like, hey, we were just featured in now, you.

Know, like, I'm happy to talk to founders all the time just about like, where are you? Like, what's working, what's not? Can we help? Do I know somebody else who can help? Like, I'm not saying I only want to talk to people when they're ready to sell, but just know which stage you're at and be honest with the person on the other side of the conversation about where you're at. And then that just sets the tone for like, okay, now I know what conversation we're having.

Yeah, I agree with you. I was.

Here's what we care about in terms of the transition process. Here's the things that we've done wrong so you can learn in this, you.

Know, blog or we just announced this new product launch or here's, you know, kind of how it is it is.

Versus, like a startup is like, the universe is so big for, like, things that you could start. You don't even know where to consider the risks. Right. Because it depends on the market and the pricing and the customers, and it's just infinite than the number of Risks that you're facing starting a company, other businesses trending.

And I would do it, you know, quarterly. And then when the time came to sell, it was. It just cut out a lot of the, you know, like, are you serious? You wasting my time? Like any.

But an acquisition is a more straightforward things that are. People can get educated, take the time.

So I think a lot of founders, like, don't understand, like, it's okay to just say, I'm looking to sell my.

Business, do it to lower.

Yeah, no, I completely agree. And I think it'll be interesting to see how, you know, the next. Um, this is probably like, way this referring more towards, like, we would get inbound requests from, like, strategic. And when I think back, I'm like, I should have handled that. Like, yeah, we're open to a conversation, but it was always like a guarded. Like, if you say that, like, you're open to selling, it, like, devalues you when it really does kind of the opposite sometimes.

That's a good point. I like this.

I don't even want to talk about this because it'll. It'll take us down a rabbit hole. But, like, are we gonna, like, do you want to have a conversation around that?

Yeah.

Rather than doing this weird dance, hoping to get some crazy multiple.

Well, and I also want to, like, make clear it's also okay to say I want to understand the process so that when I am ready to sell, I know I understand it better because I'm not ready. Right.

In a bubble, like, you know, like, if we see an economic downturn, how is that going to affect acquisitions? Um, so that'll be interesting. But we'll. Maybe we'll say we'll save that one for. I don't want to. I want to. I don't want to think of it.

As like, everything's for sale and we're on the other end of this, Andrew. So, like, people. We get inbound interest for our portfolio company. Right. Really frequently. And my answer is always like, well, we're not playing. You sell it, but everything has a price. So, like, you know, we. That's. That's me coming into the conversation. Like, I love this business. I'm not looking to sell it. Sometimes we'll just tell people after, right? Like, here. Here's our current revenue. If it's less than a 10x multiple.

On the revenue, an opinion on air, where. Where I think we're at. But I. I will tell you.

I would give you now, you know, like, I'm happy to talk to founders all the Time just about like, where are you? Like, what's working, what's not? Can we help? Do I know somebody else who can help? Like, I'm not saying I only want to talk to people when they're ready to sell, but just know which stage you're at and be honest with the person on the other side of the conversation about, then we're not interested. And that makes it like, here's you know, my number and where you're at. And then that just sets the tone for like, okay, now I know what conversation we're having.

Yeah, I agree with you.

I was give you a prediction here. Yes, we will see a downturn. We may be in the middle of it right now, middle of February 2022. And apparently that means other people, people have less cash than they thought they did. 40. I know you got a due diligence, like, can you get to that number or not? But I'm saying like, if that's out of the ballpark for what we're talking about, then let's just not, you know, waste each other's stuff time. There's a way to handle it with. And I'm being like super direct in this conversation. I might like massage it a little bit with the actual conversation, but yeah, it's totally okay to say five days ago. And that may sort of slow acquisitions or reduce prices. People are willing to pay, but it is not gonna. It is not like your activity, your market, Andrew is referring more towards like.

We would get inbound requests from like strategic. And when I think back, you're never.

Immune to the macroeconomic economic trends. But like, I think you're pretty well isolated. And my market, like, I don't really care what the, the worldwide economy does. Like, there's so there's hundreds of thousands of startups out there who want to eventually be acquired. There's still way more than enough money in this. Like, let's have a conversation.

Yeah, I agree with that. And I guess, you know, a follow on to the back. I'm like, I should have handled that. Like, yeah, we're open to a conversation. But it was always like a guarded, like if you say that like, like you're open to selling it. Like the point I was making was just the lack of education in terms of like how to position your business to be a trap. Because, you know, you look at a lot of businesses and when you're talking to a corp dev team or something like that, they are also looking at a lot of businesses and getting inbound or values you when it really does kind of the opposite sometimes.

That's a good point. I like system to go acquire those businesses. Like I, I wouldn't, I wouldn't sweat it if I'm you or if I'm me or if I'm a startup looking to get acquired in the next one to two years.

You know, I, I have like one data point that I'll, I'll share is when I launched Microcur, it was like two months.

Think of it as like, everything's for sale and we're on the other end of this, Andrew. So like people, we get inbound interest for our.

And so if you do this weird dance where you're like really held off.

At least our portfolio comes right. Really frequently. Frequently. And my answer is always like, well, we're not playing. You sell it. But everything has a price.

This is just my experience. It tends to push off the buyer because they can't tell if you're serious or if you're waste. Just wasting their time. So I always just like going back.

So like, you know, we, that's, that's me coming into the conversation. Like, I love this business. I'm not looking to sell it.

Sometimes to your first point is just being honest. Like, where are you at your stage? What are you looking for?

Sometimes we'll just tell people outright, like here, here's our current revenue. Revenue. If it's less than a 10x multiple.

On the revenue before the pandemic started. And then when the pandemic started, that's when we really started to like. And I couldn't figure it out. I was like, what's going on? And I think it was because people were trying to buy alternative assets rather than like the stock market was cratering. Even Bitcoin was cratering, which was weird because the whole point of Bitcoin was when, when the world correlated. Yeah.

Then we're not interested. And that makes it like, like, here's, you know, my number.

And so we'll just, maybe we'll revisit this on another.

Yeah, I know you gotta do diligence. Like, can you get to that number or not? But I'm saying, like, if that's out of the ballpark for what we're talking.

About, is it advice? You're looking to sell your business. You're looking to just kind of, you know, test the waters. Like, where's my valuation at? So that's, that's really good advice and I guess and let's just not, you.

Know, waste each other's time. Time. There's a way to handle it with. And I'm being like super direct in this conversation.

Any. Anything else you'd add to that?

Yeah, part of what I love about Micro Acquire is that, you know, it's tended for founders to help them be successful. And I think at some point of growth or stage of a business, it's podcast. It'd be interesting because like that, the timing like you were relatively new. Some of that takeoff station. I might like massage it a little bit with the actual conversation. But yeah, it's totally okay to say that you're describing might have just been the world figuring out that Microacquire is out there. So it'll be interesting to see with a longer lens. Like over a period of now it's been two years. In five years, 10 years, you're going to see multiple cycles, big and small. And I think that same thing is always true when the stocks tank, people want alternative assets. But it was also such a dramatic event. Part of your obligation as the founder, CEO, whatever title you want to give to start thinking about whether you, you have investors, you've got a co founder, you've got a team or what even just for yourself personally, this is part of the evolution of being an entrepreneur. You need to understand what it's like to sell a business even if you're not in the market right now. So it's going beyond what you're saying. Andrew, what I wanted to add is like it's good to the economy and so new in Microacquire's existence like you want. It's hard to educate yourself. And I'm almost like you're obligated to educate yourself so that you're ready for that, that evolution of the business. Because unfortunately sometimes it comes quicker than we're ready. And we've seen a lot of situations where people are sort of forced to sell a business for one reason or another. And if you haven't at least thought about these things, haven't had a couple of conversations, haven't like documented the things you're going to document, gonna like directly predict like, okay, this means that. You know what I mean?

Yeah, I wouldn't bet. I wouldn't bet on it. I was just saying there, what's the term correlation does not mean causation. Causation. Yeah, it was just something interesting. It could have been just, you know, I don't know, March was the month or whatever, maybe. But I just, I do remember sell at a discount. Yeah, I think, you know, I think back of my, my younger days And I used to just think, you know, getting acquired was like GoDaddy showing up with a check, being like, hey, welcome to GoDaddy. Like, we're. We're going to acquire you. Yeah, but yeah, just understanding. Just like. And I do think about it sometimes, like, huh, if the market goes down, obviously start evaluations go down, and then there's buyers with dry powder. Does that increase acquisitions, decrease acquisitions? I'm sure I could, you know, probably do an analogy with homes or something like that, but we'll have to wait and see. But I got three more questions. You know, the more you know about like an acquisition process, the higher your chances chances of successfully closing a deal. So I totally agree with you on that. So moving on to just like the final questions for you, and then I'll let you go. Does that sound cool?

Yeah. Let it rip.

All right. Favorite book?

The two that came to mind, I feel like I don't know if they're actually my favorites, but the two that came to mind are the Alchemists by Paulo Coelho. And that's not, you know, it's not a business book. It's more of a life book and one that you can read over and over again and you learn something each time. And then as a, a, as a.

Founder and CEO, we're so. We've had a crazy year in terms of, you know, M and A activity, 2022. It's hard to predict the future. Any sort of, like, thoughts on.

One of my favorite, most memorable books is Let My People Go Surfing by, I don't know the right way to pronounce the founder of Patagonia. And that's a company that just thinks a little bit differently, does things differently.

You know, maybe what's next for sure. Swift. What's next for the industry? Upcoming industry trends. Like what. What's something that maybe you'd make?

And it's the history of the company and a view inside their culture and a view inside the mind of like, a really interesting, cool founder who you could tell from the beginning it was like, yeah, we so sell clothes and gear, get bet on.

Could be a growth goal for sure. Swift. It could be the market. Just any sort of like unique industry insight that like, let's have a conversation. Yeah, I agree with that. And I guess, you know, a follow on to the point I was making was just the lack of education in terms of like, how to position your business to be a traffic because, you know, you look at a lot of businesses and when you're talking to a corp Dev team or something like that. They are also looking at a lot of businesses and getting inbound requests. And so if you do this weird dance where you're like, like really held off at least this is just my experience. It tends to push off the buyer because they can't tell if you're serious or if you're waste just wasting their time. So I always just like going back to your first point, just being honest, like where are you at your stage? What are you looking for? Is it advice? You looking to sell your business? You're looking to just kind of, you know, test the waters? Like where's my valuation at? So that's, that's really good advice. Price and I guess any, any. Anything else you'd add to that?

Yeah. Part of what I love about Microacquire is that you know, it's tended for founders to help them be successful. And I think at some point of growth or stage of a business, it's part of your obligation as the founder, CEO, whatever title you want to give to, to start thinking about whether you have investors, you've got a co founder, you've got a team or what. Even just for yourself personally, this is part of the evolution of being an entrepreneur. You need to understand, understand what it's like to sell a business. But it's about our people and the culture that this guy, Yvonne Chouinard I think is how you pronounce it, but I'm not sure. So those are the two first two.

Books that came nice. Who is an entrepreneur that you admire and respect? And it can't be Elon Musk because everyone says Elon Musk. I might expect to play out this year.

Yeah, that's a tough question. I'm not a gambler so I never would. You could ask me to list 20 and, and I, I wouldn't get to Elon Musk. Not that he's not a super smart. Even if you're not in the market right now. So it's going beyond what you're saying. Andrew. What I wanted to add is like it's good to. I don't like making sense but so the, the, the simplest question to answer cause I know the most about it is like what's in store for sure. Swift and I, you know, it's been seven years and we've done a whole lot of things wrong and there's a whole lot of things we can still improve upon. That said like I'm so confident in our team. Educate yourself and I'm almost like you're obligated obligated to educate yourself so that you're ready for that successful guy. He's just not. Wouldn't be on my top 20. Maybe that's controversial but yeah, evolution of the business because unfortunately sometimes it comes quicker than we're ready and we've seen a lot of situations where that's definitely, let's call it non conformist.

You're a contrarian.

I'm a contrarian. Thank you. That's hard. People are sort of forced to sell a business for one reason or another and if you haven't at least thought about these. Kind of feel like I admire almost all entrepreneurs. Not that, not that all are good like good humans or nice team. Our process where we sit in the market, I, I, I'm like we are just going to not be distracted. I feel like we are one of the best, if not the best company in the world to acquire bootstrapped B2B SaaS businesses between 1 and $10 million in value, full stop. Let's just do more of that, better at that and buy more. It doesn't necessarily have to be more deals, but there's things. Haven't had a couple of conversations haven't like documented the things you're going to document go to people but like just the, the guts to try something and invent something out of nothing and like create jobs for other people. I feel like I should have a, like a Mount Rushmore of like the four people that I admire most.

Michael Jordan, Tom Brady, Babe Ruth.

You're all sports. Mount Rushmore. I don't know. Sorry. I wish I had a better answer for that. So at a discount.

Yeah, I think, you know, I, I think back of my, my younger days and I used like more of the.

Right deals is all I want to think about. And every, like I said, every once in a while something comes in that looks shiny and different and cool and would be a wonderful business to own. And I'm like nope, no distraction. So I think that's what you'll see from us is like nothing super, you know, different or you know, to just.

Think, you know, getting acquired was like godaddy showing up with a check might.

Say not that interesting. We're just going to keep being awesome at what we're already good at. As far as that man, I just.

Just room for everybody. That's a good answer man.

There's room for everybody.

And on it like I'm not gonna lie, that's my answer. I'm like.

And you know like there, there's a Woman who. Just who. Who is in my hometown of Minneapolis. She runs a really amazing, like, hey, welcome to GoDaddy.

Like, like, we're gonna.

I'll give you her name. Her name's Heather Manley. Nobody's. Nobody outside of Minneapolis has probably ever heard of. She has an amazing eye. The market. I mean, you're better to answer that question. Just have a different lens and you see it from so many different angles, like founders, you know, buyers and. And investment vehicles and things like that. I'll tell you. I'll tell you something I worry about and I. I would like to get your perspective, turn questions around. Part of the greatness of Microacquire is it's brought. It's made process year for faster founders. It's made deal flow easier.

Are you. But yeah, just understanding. Just like t firm.

I got to meet her and hear her story. She's built an amazing. She's a good human. Everybody loves her. She's just started a liquor brand called Crooked Water, and that is also amazing. And she's got a third business.

You know, the more you know about, like, an acquisition process, the higher your chances of successfully closing a deal. Yeah, I totally agree with you on that. So moving on to just like, the final questions.

Business that she's starting that is in a completely different vertical. I think it's a restaurant. Yeah. I think she and her family started a restaurant. And like, that is also amazing. And so, like, she's a repeat entrepreneur. She's a good human. I don't think we celebrate her for prospective buyers, and that creates a super healthy market. My concern is that I know there are bad actors in this just in the world, in the buying and selling of. And I worry not for the health of Microcar, but, like, I don't know. I don't know how to phrase it, Andrew, but like, I worry that that's. There's going to be bumps in the road here as. As our industry continues to evolve. And I'm super bullish, like, long term, but I worry about, like, short term that not everybody knows that there's. There's bad actors. And not everybody has felt the sting of female entrepreneurs enough in this country. And so. And the reason why that, like, sparked a thought in my brain is that, like, you don't have to be rich and famous.

We're so. We've had a crazy year in terms of, you know, m and A activity 2022. It's hard to predict the future.

Any sort of, like, thoughts on the successful, admirable entrepreneur? Like I think she's pretty well off. People around here knows who like doing a bad deal sort of like I was listening to somebody talking about just investing in general and we've been on the longest bull run of you know, your and my lifetimes. Right. And. And literally who she is but I would never expect you to know who she is. Like I love people like that. It's just like doing it, you know.

Maybe what's next for sure Swift what next for the industry?

I've heard investors say I don't really know what a downturn looks like because I haven't lived through. And we've, you know we've had 08 and all this but like in general everything's up and to the right. And I worry that in our space.

Upcoming industry trends like what. What's something that maybe you'd make great business.

Not doing it for fame or glory, just doing it for the love of the work and to create jobs for people and to put something awesome out into the world. Like there's a hundred thousand of those people right now just like slugging it out. Those are the people that I and that's part of why like glorifying Elon Musk. I'm just over it. Like great company like Tesla. Cool. I wish I had one. But like can we talk about other people for a little bit? Nobody's seen like a big failure. Not enough people have seen failure that everybody thinks this is. Maybe that's what I the simple way to put it your marketplace, you know, people like us, others documenting here's a.

Bet on could be a growth goal for sure. Swift. It could be the market.

Well that's my. That's my. My beef with.

Yeah well he is he'll put you on Mars one day.

I don't want to go. That's another thing like cool science project bro. But like I'm not interested. I'm how I did it. Here's the success. You buy a great business, you do the right things. That business should continue to grow and not there's not enough. It almost makes it look. And I worry that too many people are going to step into this with.

Either their own just any sort of like unique industry insight that you might expect to play out this year.

Yeah, that's a tough question. I'm not a gambler, so I'm not going either. I'm not a planet where you can be outside.

I like Earth. I'm good. I'm good. Everyone in my neighborhood drives a Tesla. It feels like every house can't like me.

So the, the simplest question to answer because I know the most about it is like, what's his money or other people's money? Thinking it's easy and get hit by a train. Is that something that you see?

Or worry about him with a Tesla and I don't have a Tesla. But, but this has been.

What am I just like, I mean.

You could also say, you know, anyone who starts to start a conversation. Kevin. And again, I'm the huge supporter of everything that you do for founders and Idiot. Because the success rate is, you know, 10%. You know, if, if anything, I would say I'd go back to some of your previous points where you acquired companies and errors and all the education you put out to founders and it's, it literally I, I think I've told you this, but when I launched Microquiry, you were one of the first to public store for sure.

Swift and I, you know, it's been seven years and we've done a whole lot of things wrong.

We supported on Twitter and it meant a lot to me and it was just nothing work out. You know, sometimes, you know, if you're worried about people.

Authentic, man, I love what you're doing.

That was, that was two years ago.

Yeah, I can't, it feels like five.

Buying a company and not working out, you know, that's, that's part of the.

Process and there's a whole lot of things we can still improve upon. That said, like, I'm so confident in our team.

Like, I've failed so many times to, to be successful at stuff that I do and I think that's a part of the reason that you're successful. So I mean, yeah, I think people.

Are arguing our process where we sit in the market. I, I, I'm like, we are just to me, honestly, like the process that you and to me, it's amazing. I love those tweets. We put a couple in our newsletters to our, just our newsletter list and it's going to not be distracted. I feel like we are one of the best, if not the best company in the world and a little, a.

Little fast and loose. But I don't, I don't think it's.

A concerning to our investors. Like it's like once a month you're like, oh, hey, it's, we've listed this many businesses, this many exits for this much dollars. Happy Tuesday. I love that Just like and every.

Month problem to the point where it's like, hey, just buy bitcoin. Like, just buy bitcoin. You know, you know you can make that sort of argument against any sort of investment whether it's starting a new business, whether it's buying cryptocurrencies, whether it's.

Buying an to acquire bootstrapped B2B SaaS businesses between 1 and $10 million in value, full stop. It's like bang, bang, ding, getting bigger and bigger and bigger, bigger and, and, and I think you and I know like the numbers are mind blowing and it's still like it's there. There's so much room for, for you. Let's just do more of that. Better at that. And by more it doesn't necessarily have to be more deals but there's like more of the right deals is all I want to think about. And every, like I said, every once in a while something comes in that looks well to grow for us to grow startups to exist and be acquired and like it's just a, it's an exciting time man. And I, I love what you, you all are doing. You know, it's a, it's an honor to be here and talk with you and chat about it.

NFT or something like that. Angel investing. So yeah, I mean I think just the more education that we create where we educate, you know both buyers and sellers on yeah, likewise. Well Kevin, I appreciate you and definitely please tell the whole team and you know how to properly do an acquisition. Like what is your plan post acquisition. I think that's how you know the market. It will mature and then we'll really, we'll grow and tiny and different and.

Cool and would be a wonderful business to own. And I'm like nope, no distraction.

So I sure Swift they're awesome. I appreciate all of them. And I guess final question, if people want to get a hold of you for advice, maybe they're looking to sell their business. What's the best way to get.

I think that's what you'll see from us is like nothing super, you know, different or you know that two ways. So I love chatting with people on.

Twitter, you know that bring more opportunities to founders looking because what I think is going to happen is you know, for the past two years we've just had, you know, let's call it like 100 PE firms that would be willing to buy sub. You know it's called 20 million businesses and I think with the right tooling.

The right guidance, people might say not that interesting. We're just going to keep being awesome at what we're already good at as far as. So It's Kevin underscore McCardell and McArdle only has one A, not two or sorry, one C, not two.

We'll put that in the show notes. Yeah.

Or sign up for our newsletter. It's called the founder Squad. You know, hit our website, you'll get a pop up and we, we put stuff out to anybody on our the market. I mean, you're better to answer that question. Just have a different lens and you see it from so many different angles. Like list once a month. And it's usually tips, links, things we're learning, you know, from others, founders, you know, buyers and investment vehicles and things like that. I'll tell you.

And even through advisory services that we provide within microcquire. So you can hire an M and A advisor, you can hire a due diligence expert, you can hire someone for valuations, you can hire an attorney Journey. And I think the more that we, you know, equip people to essentially create their own private equity firms with, you know, all the tools that people kind of like yourself had to put together.

Over things we want to teach people and that's the best conduit to just like get a steady, slow drip of like this is sure swift. So either of those ways.

Right on. Well, Kevin, thank you so much for your time. Appreciate you hopping on this podcast with me and I'm ready for you, man. I think it's going to be a big year for you.

Likewise. I'm excited for both of us. Tell you something I worry about and I would like to get your perspective, turn questions around. Part of the greatness.

All right, cheers.

Yeah, so Microacquire is, it's brought, it's made process here for founders. It's made deal flow easier.

You know, a period of seven years, I think we can reduce that risk. But yeah, I mean there's, there's always a bad angel investment. There's always a startup that fails. There's always an acquisition that goes south. There's always, I think it was a founder of Cisco that said one.

For prospective buyers and that creates a super healthy market.

My concern, out of three acquisitions that they would do with fail. So even at the top, you know.

CERN is that I know there are bad actors in this just in the world, in, in, in the buying.

So, so just a disclaimer for people listening to this. Acquisitions are hard. You know, they're, they're not easy. Number one, you need the capital. Two, you need to know what you're doing in terms of if you don't have any experience in SaaS and you're acquiring a bunch of SaaS companies. Like it's going to be a big learning curve but you are kind of skipping over, you know, the product market fit stage. So I always recommend start small. Like hopefully like if someone acquires a company at it doesn't work out, it's on the smaller end. But candid opinion.

No, I don't selling and I worry not for the health of microcar but like I don't know. I don't know how to phrase it Andrew but like I worry that that's there's going to be bumps in the road here as, as our industry continues to evolve and I'm super bullish like long term but I worry about like short term that not everybody knows that there's. There's bad actors and not everybody has felt the sting of like I don't.

See it being issue. I think, I think the bigger issue is probably just founders selling their companies for too cheap and using you know, advisory services that charge too much. What's your take on that?

That was one of the. When you first told me about microcard that was the killer feature for me. After you kind of laid out the vision of what you were trying to build, I was like I don't want to blame doing a bad deal. Sort of like I was listening to somebody talking about just investing in general. And we've been on the longest bull run of you know, your and my lifetimes. Right. And literally broker in five but especially in. In our space with like SaaS and online they charge have heard investors say I don't really know what a downturn looks like because I haven't lived through and we've you know we've had 08 and all this but like in general everything's up and to the right and I worry that in our space and I'm not sure they deliver and I know lots of brokers in this space have done business with lots of brokers. They're good people. It's a reasonable business model. But your business model puts so much power and control in the hands of founders at a way lower price can be free. Right. Like the true. You can still list and sell a business on micro acquire for free versus a huge percentage. Yeah. So nobody's seen like a big failure. Not enough people have seen failure that everybody thinks this is maybe that's what I the simple way to put it. Your marketplace, you know, people like us, others documenting. Here's how I did it. Here's the success. You buy a great business you do the right things, that business should continue to grow. And not that I do think that is a will continue big trend that we see. There's not enough. It almost makes it look. And I worry that too many people are going to step into this with either their own. And back to your earlier point. Like I, it's, there's inherently risk and as we all know this, I just hate seeing people money or other people's money thinking it's easy and get hit by a train. Is that something that you see or worry about or like fail when they weren't going into it? Eyes wide open and. But it's not, that's not my problem. Or am I just like, I mean.

You could also say, you know, anyone who starts a startup is an idiot because the success rate is, you know, 10%. You know, if evolve and I think.

You'Re right, like if you're educating people and trying to help people along their path of like here's the things to do to anything.

I would say I'd go back to some of your previous points where you acquired companies. It didn't work out. You know, sometimes, you know, if you're worried about people buying a company and not working out, you know, that's, that's part of the process of like I've failed so many times to, to be successful at stuff that I do and I think that's a part of the reason that you're successful. So I mean, yeah, I think people.

Are getting lower your chances of failure or at least understand the risk that you're seeing. Like that's all, that's all you can do. And all I can do is like tell people here's my experience, here's some things to look out for, here's some ways I've failed. Like try not to do those things. You know, go invent all new ways to fail. But know that failure is part of the deal when you're, you know, running.

And a little, a little fast and loose. But I don't, I don't think it's a concerning problem to the point where it's like, hey, just buy bitcoin. Like just buy bitcoin. You know, you know you can make that sort of argument against any sort of investment, whether it's starting a new business, whether it's buying cryptocurrencies, whether it's buying a business.

So yeah, I like, I like your, I like your lens on it. It's just like that's, that's, that's the deal with startups.

Like you can't just high risk.

High risk deal.

Yeah. NFT or something like that angel investor thing. So yeah, I mean I think just the more education that we create where we educate, you know both buyers and sellers on now there's, there's no, I mean this would be a funner longer conversation. I'm just like how to, how to de risk acquisitions or how to de risk even, you know how to properly do an acquisition. Like what is your plan post acquisition? I think that's how you know the market will mature and then will really will grow. And launching a startup, you know there's, there's so much education out there and I think that's where it really starts is learning from other people's failures and mistakes. And I think the more that people spring more opportunities to founders looking because what I think is going to happen is you know, for share those publicly, the more they can help other people not make those same mistakes because a lot of them is or the past two years we've just had had call it like 100 PE mistakes that I see with startups or acquisition firms that would be willing to buy sub, let's call it 20 million businesses. And I think with the right tooling and the right guidance, I haven't really heard too many in terms of acquisitions aside from code being awful, had to rebuild, build you know, the code base, stuff like that. But you know that stuff being shared like the common pitfalls of an acquisition, you know, people can learn from that and then avoid those mistakes. But yeah, with any sort of investment or any sort of, you know, and even through advisory services that we provide within Microcar. So you can hire an M and a advisor, you can hire a due diligence expert, you can hire someone for valuations, you can hire an attorney. And I think entrepreneurial endeavor, there's a very, very high risk of failure. It's literally you have you know, a 10 chance of success starting a business. I would argue your success or chances of success when acquiring a business is probably higher because you're skipping over, you know, some of the hardest parts. And the more that we, you know, equip people to essentially create their own private equity like finding customers and product market fit and then you might be using like you might budget fit firms with you know, all the tools that people kind of like yourself had to put together over 50k. And I have friends who you know go up to like 150k and they still aren't there. So probably, probably like we could probably talk about that for a While but I get what you're saying in terms of, you know, as the buyer pool increases, not all of them are going to be, you know, a period of seven years. I think we can reduce that risk. But yeah, I mean there's, there's always a bad angel investment. There's always a startup that fails. There's always an acquisition that goes south. There's as sophisticated and as experienced as yourself. And so at Microquire what we're trying to do, I think it was a founder of Cisco that said one is build tools that help with things like, like you have a due diligence team like other people don't like one out of three acquisitions that they would do with fail. So even at the top, you know, if there was tools for due diligence or what if there was you know, tools that basically automated did you know the legal document creation or you know, allowed you to, you know, find an advisor to help with, you know, the whole process like when you need it. Just to point out any yellow flags you might so just a disclaimer for people listening to this Acquisitions are hard. You may not be catching. So yeah awesome.

I think it's a huge service to the whole industry.

Now they're, they're not easy. Number one, you need the capital Two, you need to know what you're doing doing in terms of if you don't.

And you're like if the chances of failure of a startup are 90 the chances of failure for an acquisition of.

Any experience in SaaS and you're acquiring a bunch of SaaS companies like it's going to be a big learning position.

Should be way lower or chances of success be way higher depending on but.

But it's never but you are kind of skipping over you know the product market fit stage. So I always recognize think about an.

Acquisition is like you still have the like just life and business is unpredictable.

And risk man starts small like hopefully like if someone acquires but in terms.

Of like wrong price tech blowing up on you team issues that you didn't know about legal issues, you know, the contract things. There's there's a relatively, it's not a short list but there's a list, it's a countable list of things that are.

The predictable company it doesn't work out. It's on the smaller end trend. But candid opinion.

No, I, I don't things that go wrong in a business of you know, a certain size and you know, people like you.

I don't see it being an issue. I think I think the bigger issue is probably just founders selling their companies for for too cheap and using you.

Know, people like me can share to the world and others like here's our take on that list of things and here's what we look at in our.

Advisory services that that charge too much. What's your take on that Village?

Here's what we care about in terms of the transition process. Here's the things that we've done wrong so you can learn and it is, it is versus like a startup is like the universe is so big for like things that you could start. You don't even know where to consider the the risks. Right. Because it depends on the market and the pricing and the. That was one of the. When you first told me about Microcard that was the, the killer feature for me. After, after you kind of laid out the vision of what you were trying to build, I was like I don't want to customers and it's just infinite the number of risks that you're facing.