Strategic Pricing - How to Sell for More Cash in Less Time w/ Rainier Nanquil and Paul Kelley

Foreign. Let's get started. Thank you all for tuning in to Acquire's another webinar. We've got a really cool topic today of strategic pricing, how to sell for more cash in less time. Let's go over today's agenda. We'll go over introductions of who we have here today, why you're here, what is strategic pricing, why price strategically and how to price strategically. So here's our awesome team@acquire.com. go over the introductions of myself and Paul. So a little bit about myself. My name is Rainier. I'm one of the in house M and A advisors here@acquire.com. you may have seen me in some of the other webinars. I have over a decade of experience in investment sales, M and A brokerage, capital markets. I've been involved in over a billion dollars in transactions previously at Empire, Empire, Flippers. Before that, Cushman and Wakefield. Before that, Marcus and Milchap. And I'll pass the mic over to my colleague Paul Kelly.

That's almost like a comedian you don't want to follow. Geez. Hey everyone, Paul Kelly, I'm the VP of M and A here at Acquire and you know, previous joining the team here, early on I had managed, we actually had an outdoor media company that was acquired and that was my first experience with, with an acquisition. Found myself in a Main street brokerage which I ended up managing for about a decade. From there, founded a firm, a boutique agency here, a boutique ebony firm here in San Francisco with a partner that's still in existence and more than happy to be here helping more founders than ever thought possible. So back to you, Renee.

Awesome. Let's get to the next slide here. All right, who we are and what we do at acquire.com, we're building the world's most founder friendly acquisition marketplace. Paul, do you want to go into a little bit of what you've seen from Main street versus what we're doing here at Acquire?

It's amazing what product and the development team has been able to put together, really taking the institutional knowledge base and building software and product around it. And so what's really amazing to me is, is, and you've heard me say this before, you know, there's a lot of raw moments when you're going through a process and the first raw moment is you get a new client and then you have a raw moment when you've packaged them up and you go to market. But there's also a pause where it's like, well, I have this great founder. This Great product. How do I get it in front of the right buyers quickly and efficiently? And it's, it's been a challenge, as I'm sure a lot of people out there listening and know that challenge firsthand. With Acquire, it's just amazing how rapidly we can get an opportunity in front of just dozens and dozens literally. Like, I mean, we've seen, you know, 75 to 100 in a week, you know, unique NDAs. So that is the power of this thing is amazing. And we're excited to continue to tell you guys all about it.

Awesome. Let's go into some of our numbers. So our impact so far. We've been in business for over four years now. Over 100 countries served over 2,200 listings that are over a billion in combined revenue, over a thousand deals sold, over half a billion dollars in closed transaction volume, and now 500,000 registered buyers on our platform. So if you were there on our last webinar, you saw that it was just over 400,000. Now we're at 500,000. We're growing very rapidly thanks to you all and thanks for all of your support out there. In today's theme, we're, we've got, if you have one buyer, you have no buyers. And this is a cool, this is a funny meme from Roger. He's our meme king over here at Acquire. Here's my offer, here's my counteroffer. $1. All right, Paul, I'll kick it off to you. What, in your words, is strategic pricing? What does it mean to you, strategic.

Pricing, really understanding your goals, your needs, and understanding the market realities. And then pricing according to those findings, really, that discovery, once you've done that, then there's quite a few different methodologies. But you know, strategic pricing in this environment usually is a very, you know, we're going to go into it in more detail in subsequent slides, but I really think strategic pricing is pricing commiserate to your goals, needs, and the market realities.

Awesome. Yeah, that's a great definition there. Our definition is pricing 5 to 10% below fair market value to maximize interest and negotiate a higher price, more cash and friendlier terms. So you might be thinking out there, listening in, like, is that counterintuitive? If you price below market, how do you expect to go back up? Well, if you think about it, you're pricing to sell. You're showing the entire market that you're motivated, you're motivated seller, you're pricing to sell. Time is of the essence. And really what that does is it attracts the biggest buyer pool possible to compete and put their best foot forward. When it comes to LOIs versus the other strategy is if you only have one buyer string you along and you've got to go multiple rounds back and forth loi counter, you got to do the whole song and dance versus if you do this strategy more times than none, you'll probably get a better outcome when it comes to more cash upfront, better deal terms, better transition and faster close in essence. Paul, anything else to add in there?

You know, it's, I, yeah, that's a great, great summary. You know, I'd say that part and parcel to, to the ability to get your opportunity in front of a lot of buyers is, is getting that, that market feedback from your opportunity in real time. Right. You have that, you can see that in a week's time you could have a hundred interviews effectively with buyers that are looking at your business, looking into your industry. That's incredibly valuable. And yeah, I mean I think that that is one thing that I, I, I, I really like to, to, to always talk to my clients about is, is you know, every one of those buyer interactions is valuable if you, if you handle it appropriately. And it's a two way street on those calls. And you know, our buyers here are awesome and they, they're willing to share this ecosystem is amazing. They're willing to share the knowledge base that they have and if you know, if it's not the right deal for, for them, you know, they're willing to share the, you know, maybe the pros and cons and then you're better suited for that next call.

Right, right. Let's jump into the next slide. Let's get into a visual of what is strategic pricing and finding the pricing sweet spot. So I really love this pricing matrix here. So if we look at the fair market value of the comparables that are trading in the market, very similar deals to yours. If you price it at fair market value, very tight in that range of what that multiple is trading at, whether it's revenue or profit or a little bit of both. If you price it at fair market value, 60% of the active buyer pool will look at your listing. They'll see your listing sign in NDA and then that usually translates to buyer, seller, introductory meetings and then that usually translates to offers. Now what we're recommending, when you go with a strategy of strategic pricing, if you go just 5% to 10% below that fair market value, you increase that buyer pool and serious buyer interest up to 80% or 92% and that's really showing again, the market that you're pricing a seller serious about selling in a timely fashion, you get the best offers up front and you close, close fairly quickly versus if you do the other strategy, which is testing the market or pricing aggressively. If you just go 5 to 10% above fair market value, look at what it does, you diminish the buyer pool down to 30% of the active buyer pool that are looking at deals and then 2%. So whenever a buyer, if you put yourself in the buyer's shoes and you see a deal that's overpriced compared to what's trading on the market, you're going to move on to the next deal. There's over a thousand plus deals on our marketplace. We know exactly where deals are trading at, where they're sitting at, what buyers are looking for. And I'm looking at the live numbers right now. So as of Today, we have 175 deals currently under offer. These are deals closing within the coming weeks here. Just last month we closed 53 acquisitions and we have over 1.8 billion in verified buyer funds. So these are numbers that we see from our data. And again, these are buyers that are taking down deals that are priced appropriately. And we know exactly the deals that are sitting on the market and what type of metrics their business is at and why they're sitting on the market for such a long time. Paul, anything else to add here?

Yeah, you know, you hit it is, you know, keeping in mind that at that 60% of fair, you know, fair market value, you're going to have 60% of the buyers, you know, coming through to having those conversations. My previous comment about you're really wanting to, you know, inspire conversation in that interaction, that's how you're going to learn and, and really understand the market and have those, you know, good buyer conversations. There's a compound effect though. If you go 5% over market, for example, you know, there, there's how many NDAs will come in, how many chats you'll have that converts into how many meetings you'll have, how many meetings you'll have to how many offers you'll have. There's a negative compound effect there if you're, you know, reducing your buyer pool so you're really reducing compoundedly how many meetings you'll have and therefore how many offers you'll end up. So pricing it, you know, with this strategy will inspire those conversations and you'll be better suited. And if you have unique IP that you think is worth an extra two Points, then you at least have an opportunity to explain that position rather than never having the opportunity because you've been priced too high. You're just an echo chamber.

Right? That's a great point, Paul. And then that just quickly reminds me of real life deals. Let's actually bring in some case studies that we've closed recently to put this visual an example and give it some real life numbers. So a deal that we closed very recently in the seven figure Mark SaaS deal, good fundamentals, we priced it strategically around the 10% below fair market value. Right off the bat we had 125NDA signed. From there we had 20 buyer seller introductory meetings set and then quickly after that, 18 offers competing on the deal. So that's the power of pricing strategically and ultimately that brought the buyers to bid up and sell significantly above list price. And from there the seller got a really clean win, win, win situation. 80% cash upfront, quick close. Remainder of the payback period was fairly quickly. The buyer was a solid buyer, repeat buyer with us. So overall both parties were happy. It was a win, win situation and we got it done within a 45 to 60 day mark. So that's just a real life example of what could be done if you follow this strategy. So going on to the next slide here, why price strategically? So let's, let's jump into here. Paul, do you want to start off with the first three and we can go from there? Sure, sure.

So, you know, as we kind of hit hard on the last couple slides, you're going to get more interest. You know, more interest equates into more offers. At the end of the day, more offers are going to have, you're going to have more opportunity to counter back and really align your, you know, your values and your expectations with the, with the, you know, new buyers or the new partners you want to be able to, you know, if you're priced realistically, you're indicating and signaling to the market that you're serious, that you're realistic, you know what the market realities are and you want to make, you're ready to make something happen. So in those scenarios, what I've seen, and this is coming from almost 20 years of experience, is okay, we like the deal, it's good, it's going to be a more efficient deal all the way through. When I get into diligence, look man, no one likes doing diligence. Buyers don't like doing diligence, sellers don't like doing diligence. If everything has been checking out all the way up into the diligence period, I've seen, you know, financial diligence, of course they're going to have to be meticulous. But all the other components of due diligence, it's almost in some cases spot checking in various categories. Now if we use that same example, however, it's at the upper end of the market and they're, they really like your business, they really like you, but geez, we're paying a lot for it. They still may move forward, but they're going to roll up their sleeves and they're going to go on a fishing expedition and make sure that all of every little stone is uncovered and it's just a more arduous, heavy lift. However, it's what will end up happening. The last component there is that, you know, if, if everything's checking out fairly well up until that point, the diligence is checking out, you know, the offer in most cases is going to have more cash at close, which is always a better scenario. You got the next ones there.

Yep. So then with the forex, more interest, more offers, better price, maximize cash at close, fewer closing conditions. So what does that mean? So if you've got different deal structures, if it's an earn out seller, financing some sort of contingent payments for a seller, you're taking on a lot of risk. When it gets really creative for a seller, it's ideally you want to get as much cash upfront, that's guaranteed versus taking on the risk where you may or may not get paid out over 6 months, 12 months, 24 months over time. And the way that you try to get as much cash up front and you get a cleaner offer is by doing the strategic pricing where you get as many buyers and serious offers in front of you so that they put their best foot forward and then you ultimately get a faster acquisition. So with all that being said, I love going into real life case studies, real life deal stories and examples. So I told you the one about the 18 offers. We had another deal that was a SaaS deal, close to eight figures. SaaS, great fundamentals on this one, 104ndas right off the bat. And then this one was 70% plus cash upfront. They even got retained equity, a second bite at the apple, what we call it in the industry, and then a short payback period. So that was overall a clean deal for an eight figure deal. So when you employ this strategy again, 5% to 10% below market, it sounds counterintuitive, but by showing the market that you're serious, you really get some serious results. 104 NDAs was that deal. 125 was the deal I mentioned previously. Another 7 figure SaaS deal that we closed more recently. 93 NDAs again all with heavy cash component upfront with guaranteed payments and a very short payback period for the remainder. Anything else you want to add here, Paul? Before we jump on the next slide.

I would just like to say that being empathetic going into it is always very helpful. So what does that mean? If you're a buyer, kind of put yourself in the seller's shoes and try to be in that seat when you're thinking about how, how you're going to structure a deal and is that going to be, if you were on the other end, is that going to be a fair transaction for you? Vice versa? The other way, you know, as a seller, you know, realistically think about the buyer and the buyer's risk and what they're taking on. So you know, at the end of the, at the end of a transaction, I don't think anybody should be jumping up for joy. I think that there should be a share, shared risk, shared reward and particularly if there's, you know, some of those, you know, padded up closing conditions around some of the stuff you had mentioned, veneer with earnouts and contingent payments and revenue marks that, that actually even makes it more important there. So other than that, I think you, you handled it awesome.

Let's get to the next slide here. If you don't price strategically, then what? Paul, you want to hit the, the first couple points here?

You know, if you, the, the, the worst case scenario is you have no buyers. The second worst scenario is you have one and you hit that home earlier and at a different, you know, I like to say if you have one buyer, the buyer has you. So leverage is out the door. And then, you know, you could also have, you know, these other closing conditions we were talking about, there could be holdbacks, there could be, you know, fallback provisions in a seller note. For example, you know, if you're not hitting these marks, the buyer wants to make sure that their, you know, their investment is sound. And you know, we've seen it a bunch of times and I'm, you know, I firsthand have seen it where if you are really testing market, it can just take an enormous amount of time to find that buyer. And it's especially how fast things are moving. Everyone on this call today knows how quick things are moving in our world. If a typical M and A process is not going to be the Best process any longer just because where you used to look at one, three and five year projections, we're looking at those in month long projections in some cases. So longer time to find buyers. Buyers, time kills deals, right?

Right. So if you don't price strategically, there's a lot of risk that you're ultimately taking on as a seller. Longer time to find the buyer and close. More rigorous vetting and due diligence. Again, if the buyer knows and sniffs out that they're the only buyer looking at the deal and they have you with a tight grip, they're going to ask for tons of time to do due diligence and they're going to ask for certain things because they control the shots at this point. They're going to say, hey, provide this, this. Can you provide me a pro forma, can you give me your game plan, exactly what you would do if you, you know, when I take over the business, tell me exactly what I need to do. You're basically doing all these forecasts for them and then at the end of the day, they may pull out at the end and say, hey, you know what, we actually price this closer to market and if you don't give us a price reduction, we're just going to pull out of the deal entirely. Now these are situations that do happen and they often happen when it's priced aggressively. Because a lot of these sophisticated buyers, if they see that your listing's been sitting on the market for a while, they're going to track it. They're going to check back every few weeks, every month, and then when the time is right, they're going to reach out to you. They're going to know that they're the only buyer tracking the deal because if they weren't, you would have sold it already. So again, if there's, there's two different ways to go about listing the business, ultimately it's up to you. And again, at Acquired, we want to get a firm understanding of what's the most important thing for you and your exit. Is it price? Is it timing? Is it transition? Is it the buyer? We're going to give you our feedback and our honest opinion and ultimately it's up to you of what direction you want to take it. Paul, anything else before I jump to the next slide?

Yeah, no, I love that last thing you said, you know, is that we're going to, here we're going to be, you know, you have the opportunity as a, as a potential founder looking to sell. We're going to give you a honest opinion on in range and value where your business presently sits. We'll give you the pros and cons and you'll have a scorecard on your own business. And I don't know how many times we're saying, you know, no, you're not ready right now. So it's a value. We're a valuable resource not only in getting sold, but also preparing yourself to get sold. And that might not be now, it might be next year or the following year. And that's okay. But it goes back to what we said very early on is really understanding as a founder what you're trying to achieve, what your goals are, what your present goals are, because you're talking to us, obviously. So what are your goals, what are your exit goals, what are you trying to achieve? And then we can help you shape that.

Awesome. Testing the market, overplaying your hand could give buyers more leverage. Pretty much what Paul and I both mentioned earlier. If you're priced aggressively, testing the market, sophisticated buyers will know. They'll track the deal, follow up every few weeks, hey, is this still available? Hey, is this still available? And then they're going to have all the leverage at the end of the day to have a long due diligence period. But as least amount of cash upfront have you take on the risk of seller financing burnouts that may or not be able to get hit. So really it's, it's up to you of, of how you want to play it. But again, this, this, this is the reality. If you test above the market, this, this is a very realistic thing that could happen. So again, we'll tell you the probability before you list live on the market. But ultimately it's up to you, Paul. Anything else?

You know, we went through these slides yesterday and the same thoughts came to my mind and it's actually different scenarios, but it's the, it's the, you know, testing the market or holding out for a higher price or the scenario where, well, we're not getting the price now we're going to go ahead and pull it off market and grow into our valuation, which I'm not going to fault anybody for trying to do. But there's also a reality check there. Right? Let's use that last example. We're going to stay, we're going to keep the same team, we have the same capital resources, we're going to take it off market and we're going to grow the company into our, into our valuation and our, you know, what we need, what you need is not a reality. What you need is a goal. What the business is worth is a reality and that's what we're going to get you to. So I've had a scenario where that example, they took it off market and I talked to him a year later we went to market and they just worked for a year for free. And I, you know, because I ended up selling it for 20% less than we could have had offers on the table 12 months prior. So that old bird in the hand theory could not be more salient in, in our current environment.

Right. All right, well, let's jump to the next slide here. So how to price strategically, what are the steps to do? So Paul, you want to kick us off with the first few steps here?

Well, the first thing is getting educated to market. Good news is that we have that information. We have multiples reports that are published and, and you can go right to our website and pull that. You want to work to refine that, that opinion of value. And with us we'll, we'll give you a fairly tight range in what that, where we feel that the value is. And we'll defend that with, with the multiples reports and comparables. We're hoping that in most cases that shadows expectations and then based on those metrics, we'll use the, you know, previously mentioned methodology to, to go to market and you know, asking for 5 or 10% below where we would comp it out at.

Right. And then from there, step four, we're going to be there every step of the way to help you manage bids fairly to keep the goodwill. So the cool thing about our platform is we have really cool tools to show if it's a verified buyer and they have verified funds. It'll show you how much funds they have liquid, if they're Persona, if they're verified over Persona, it has a little bit about their background, their LinkedIn. From there we have the tools to help you stack rank which bids have the highest probability to close. So you're going to move those closer to the top. Any of the other buyers that you're unsure of, maybe it's their first time going through an acquisition, you're going to move them onto the later stages of your stack rank sheet. But again, acquire.com, we're here to help you every step of the way. This is not an easy process. As simple as it just says manage bids fairly to keep goodwill. This is a very sensitive part of managing, managing a deal. If I go back to the deal that I mentioned with the 18 offers you've got to really be careful in how you manage these buyers. Because if buyers feel that they're getting shopped, what we call an entry getting shopped, where you're going to one buyer and saying, hey, can you beat this offer? This other guy made this offer, most of your buyers are going to back out. They're totally not cool with being treated that way. So the best way to go about managing bids fairly to keep goodwill is to make sure all of the buyers understand what the seller is looking for, what the bidding process looks like, what the timelines are like, of when to schedule a meeting, made a bid, how the seller is going about selecting the winning bid and making sure that you're transparent, clear, managing all expectations in that process. And that's how you go about winning, selecting the winning bid. And in the event, for whatever reason, if that buyer can't close, for whatever reason, buyer number two, number three, number four, number five, you're going to keep that bridge open so that they can slide in as a backup buyer and close the deal. Last thing you want to do is piss off every buyer, select the winning bid. All of a sudden, if that deal, for whatever reason, falls out of escrow, then you're left going back to market. And then all of a sudden, the sophisticated buyers are asking, oh, weren't you on the market before? What happened? Is there something wrong with business? Then you've got to explain yourself and go through that whole scenario. So on part four, we're going to help you go through managing bids fairly to keep goodwill. And then five, choosing the right buyer and deal. So going back to the stack rank of here is, let's, for example, 18 offers. Here is the highest probability of close. This is the buyer profile. Here's how many deals they've done on our platform as well as outside of our platform. Here is their deal structure. High cash upfront, short contingency, high probability of sale, proof of funds, et cetera. And then you go do that to all the different buyers that you have. And then that's how you go about taking the five steps of pricing strategically. Paul, anything else to add there?

You know, the, the managing, you know, the offers fairly and making sure that each buyer has a fair shot. You know, very early on, one of the mission statements, if you will, Andrew, our CEO, shared with us was, you know, building a platform, you know, that you can communicate with trust, trust, transparency and ease of communication. Well, we've given the tools to make that happen. So we, we beg you guys to do that. And just the communication is paramount here and we help facilitate that. But it's also up to the buyers and sellers, sellers to make sure that they maintain that high level of communication. So why is that important? Because goodwill is important in these deals. It's humans on both sides. And, you know, you want to make sure it doesn't need to be a love fest, I always say, but it does need to be a fair working relationship. And if there's things that happen and there's, say, gaps in communication and you know, you've submitted an offer and it's, you know, it's a week has gone by and it's crickets, well, that's not a good feeling. And you're thinking that you're being, you know, shopped and, and that's, you know, then you're not having a high level of trust in that founder. On the other side. You know, if, if a buyer is ghosting you or, or you know, there's that trust issue that happens and then it just causes investigation, which is not a horrible thing. However, you want to be going in with a high level of trust and transparency and then hopefully circumventing any suspicion. If you start doing things like ghosting or not having a high level of communication, it opens up suspicion, which we want to avoid.

Right. It's basically the golden rule. Treat others how you'd like to be treated. At the end of the day, buyers and sellers are all humans. We all have our, all, all, everything is going through things in their life. Just remember that when you're going through these acquisitions. Just remember that it's a human on the other side and just treat everyone fairly and you'll have a win, win situation at the end of the day.

Yeah, I haven't, you know, almost 20 years. I haven't been involved in any hostile takeovers as of yet. So in most, most scenarios it's best offer and it's a, you know, it's, we're here to help make all of this happen. Splendidly, though.

Awesome. Awesome. All right, Paul, what about listing as open to offers? Why open offers is usually a losing strategy? You want to kick this one off?

You know, I can firsthand tell you from experience that it's, it's a, it's a strategy that has been, you know, used over time, but it's, it's in this environment, it's just, it's, it's not, it's the needle in the haystack. Right. And it's, it's not a good strategy for a few reasons. The, the, quite a few reasons. But the biggest reasons, in my opinion, are buyers don't know where you're at. They have no clue if your expectations are extremely high or if you just don't have a clue about your business. And so there's just a mess behind the scenes and they just won't even. It's, it's. They're making a, a determination before investigation and you're inhibiting that. So what we want, it's. You want to inspire conversations. And by pricing open to offers, I don't even know what the metric would be. But as that pricing at fair to market at 60% of the buyers, if you're open to offers, are we getting 5%, 3% of the buyer pool? So you're just really cutting off of that fast lane of buyers that would otherwise be looking at your opportunity.

Right? Totally agree there. If I were to put myself in the buyer shoes, there's thousands of listings on acquire.com and I'm looking at deals that are within range. And then I see this other deal that's just listed open offers. I've got limited time and resources. And if I go sign the NDA, look at the sim, look at the financials, do all of my homework on this listing that's open to offers, and then I schedule an introductory call with the seller. And in my mind, I've done all my homework. I've used my time, energy, effort, brought my team along to help underwrite the deal. And we're at a million dollars, for example, and then the seller's at 5. But the listing was open offers. We basically spun our wheels and we could have went to another deal where we knew what the seller's expectations are. That shows that they're motivated to sell their price to sell. I'm going to spend my time, energy and effort on that deal. Anything else here, Paul, before I jump onto the next one?

Not only that, I mean, this is for founders. When pricing, keep in mind that, that, you know, as you said earlier, Renee, you know, buyers are looking where to invest their dollars. There's an enormous amount of funds out there ready to be deployed. However, they're being smart and cognizant about where they're putting their, their dollars. And to your point, you know, time is money and there's certain limited, you know, it could be a huge PE firm, but still they have resources and limit. There's limitations to those resources. And if I' you know, if my BDO is spending a ton of time just on turn and burns that I'm never going to look at I'm going to probably say I only want to be looking at, you know, certain, certain criteria which is, that's another thing that's very important right now is the criteria factors I think have changed, particularly in the lower middle market. Whereas years prior PE strategics were coming quite downstream, even sub million dollar type, you know, EBITDA companies, whereas they're pulling that back and I feel like they're pulling that back. So if it's open to offers, you might not even have them look at your deal at all. That's a pretty big one that actually just came to mind and I hope it's valuable.

Right at the end of the day, there's the cost of capital, there's opportunity cost, and it just makes it difficult for a buyer to take your listing seriously. A sophisticated buyer is going to look at that listing, open offers and say, okay, the seller does not know what an acceptable deal looks like to them and they do not know who the ideal buyer profile is for this particular deal. Let me go ahead and move on to the next. Let me go ahead and bookmark this and if it's still there, maybe a month, three months exactly, we can take a look again. But for now let me look at a deal that's new, that's fresh, that's priced to sell and unfortunately that's the reality of the market. We're going to tell you how it is and at the end of the day, just really make sure and have a firm understanding of why you're selling in the first place, what is the goal that you're trying to achieve. And if price, deal structure, timing, transition is of importance, really get a firm understanding before you just throw something on the market and cross your fingers and hope for the best.

Yeah. The other important factors are often are, you know, your legacy, your, your clients, your team, you know, making sure that they're in good hands moving forward. So there's a lot of buckets to think about. And, and I say that I, I really love when I talk to founders that are self realized and what that means is they come to me realizing it's like, gosh, I've grown this to $10 million AR company, fantastic. But I also realize that I have limited resources and I know my skill set and I, the higher you go, more risk you're taking on because with the limited resources and skills and experience and scaling, you could be putting yourself in a detrimental position.

Awesome. Awesome. All right, this, this will be our last slide. So we're going to have tons of time for Q and A which is great because we're seeing a lot of good questions come in. So in order to get your free strategic pricing strategy now, don't wait and sell for less. Get in touch for expert help to sell at a higher valuation. Reach out to us and our team. We're here to help. Again, we specialize in SaaS. We're the king of SaaS. This is our bread and butter. Our goal is to get you the best price, best terms, smoothest transaction, and again, we've got the largest buyer pool of buyers located all around the world. You saw in the chat everywhere from India to Canada, Australia, all over the place. And we've got quick and rapid exposure. And ultimately we're here to create a market for your listing, get you the best buyer and the best terms available. Anything else, Paul, before we jump into the Q and A, I just, you.

Know, I just love seeing when we do these, that people are just all over the world and we have that pleasure of getting to talk to people all over the world. So we have that experience. And if you're somewhere where you don't think it could happen, talk to us because you'd be surprised.

Awesome. All right, first question here. This is a good one. How do you balance between pricing strategically and not underselling your business? Paul, do you mind if I take this one? This is a good one. So again, our goal is to get you the best price, best terms, best deal outcome possible. And the way to do that is to create a market for your listing and expose it to as many qualified buyers as possible. And again, over 500,000 buyers in our proprietary database located all around the world. It's instant and effective exposure as soon as we hit list. And from there, if you're priced to sell, you're going to get as many eyeballs competing on the deal within the first couple of weeks. You're going to have tons of NDA sign tons of buyer seller introductory calls set up and from there the fun part begins once you start getting these different offers and different offer structures. So pricing strategically and exposing it to as many buyers will get you the best price and the best terms. And the opposite of that, underselling your business, in my opinion, is selling it off market or selling it when you don't truly know what market comps are. Again, we've, we're selling hundreds of deals a month and we're, we have hundreds of deals under offer. We've got a really good pulse on the market of what's actually trading. I would be very wary of Anyone giving you a high number without any data to back that up and then you're locked up in a listing hoping for the best or even worse is if you sell off market when you didn't know that you could have listed on our platform and get 20 plus buyers setting a meeting with you and 18 offers to compete and get you the best price and terms. If you sell off market, then you're wondering post acquisition, okay, did I leave money on the table? There's all of these things to consider. So to answer your question, how do you balance between pricing strategically and not underselling your business? Get it in front of as many qualified buyers as possible that knows a proper marketing strategy for your particular deal and that's how you ensure that you don't leave any money on the table. Paul, anything else to add there? Did I miss?

Yeah, I mean, I think that that just goes along with the same thesis is the more buyers you have the opportunity to speak with, the more market intelligence you're gathering and you're just better off for it, you know? You know, knowledge is power.

Right. Okay, let me give you the second question here. This is a really good one too. How do you handle potential buyers who might perceive the lower asking price as a sign of distress or desperation?

Want me to take that one?

Sure. I could take it too. Up to you.

No, no, I got it. So I would just say, you know, be completely transparent in your communications. So there is, you know, if there's going to be, you know, earlier we talked about having a gap in communication and then, you know, that just leads to uncertainty and uncertainty leads to, you know, there's a whole psychological thing that happens there. So high level of communication. Be transparent in your communication. And if there's any of these, I mean, we have tools here that any of these questions that come up sometimes we might miss a salient question. Well, guess what, we have tools with living Q and A documents and such that will add those. And we're always iterating on the materials. So we're making sure that we're explaining the pricing clearly and we're explaining the rationale clearly along with showcasing the strengths and emphasizing the growth potential and other attributes of the business.

Right. And if I could just add a little thing there, if, if, if this listing is 5 to 10% below what market is trading for, to me it just shows a serious seller that's motivated to sell in a quickly fashion. If it's more than that, then you start wondering, okay, is there something wrong with business? Is there a solid reason why it's 15, 20% plus below market. And you really want to get an idea of why the seller is selling. Because then if there's a solid reason of why it's priced way below market, then you may have an opportunity there. And what are some of those situations? Is it taxes or partnership dissolution? Health, death, health. There's a lot of situations, unfortunately, where people are in a forced seller situation. And if you see a deal that's priced way below market, it could be that. But if it's something that has year over year trend of the business slowly dying, then that's also a reason why it's priced to sell as well. So again, really get an understanding of why they're selling and why. Look at the metrics and the fundamentals. Let's go to question number three. How can sellers effectively manage bids to maintain goodwill among potential buyers? Doesn't it piss off a buyer if you come back and say you've got a higher offer and degrade trust? So do you mind if I take this? Paul?

Please, go ahead.

So I may have mentioned it on the sides before, again with a situation, another deal situation. We had eight offers on a deal high seven figure deal, SaaS deal, very clean fundamentals. And again, the process there is to make sure that it's fair. All the buyers feel that they're being treated fairly. Everything is communicated and you're managing expectations of when the deadline to have a call with the seller is a deadline to submit a bid, how you're going about selecting the winning bid, what exactly the seller is looking for. The last thing you want to do is again to shop an offer. And what we call in the business shopping an offer is going to one buyer and saying, hey, there's eight offers. What's your best offer? Take that offer, you go to the other buyer, hey, this is where we're at. Can you beat that offer? You go to another buyer, hey, can you beat this offer? And you go back to that first buyer, hey, look, these other two beat your offer. Do you want to try to step up and do it again? That is a recipe to piss off buyers and have them back out of the deal. So don't do that. The good thing is when you work with us, we're going to tell you and plan strategically with you and we're going to be there every step of the way of how to go about treating buyers fairly and how to select the winning bid that has the highest probability to close. And again, when you have multiple buyers, multiple bids, you treat them Fairly, you get the cleanest deal for you with the highest probability to close. But in the event, for whatever reason, if that buyer can't close, at least backup buyer, 2, 3, 4, you treated them very fairly that they're happy to step in and say, hey, if anything happens with that buyer, let me know. I'm happy to step in and win the deal.

As was evidenced by that last transaction. That was a seven, eight figure. I mean, it was a large transaction. And just to hammer that home, what does it mean being fair to all of the prospective buyers? It's just communication. You know, the flip side of that is that if you're, you know, this isn't an issue of losing goodwill points. This is losing trust points. And if you have trust issues, it's like, what else is when you're not telling me. Right. And then I'm peeling that onion. So you're putting yourself at a huge disadvantage to try to get too crafty in those negotiations. We'll put a stop to that.

Exactly. Golden rule. Treat everyone how you'd like to be treated, just like grandma said.

Yep.

Just don't. Don't shop offers. Just remember that. All right, next. Next question. So this one's pretty good, too. What are my options if I end up pricing strategically, say, 10% below fair market value, but end up getting offers only at that amount? So 10% below the list price. Paul, you want to take first crack at this one?

Sure, sure. And this does happen where, you know, we have a tiered marketing approach, and it's a heavy hit. So what I would say first is really. Okay, well, what are we hearing? Are you asking those questions of the buyers? If they're passing for whatever reason, are you asking them why they're passing or why they're placing those values? So we could assess all of that, and we'll relook at that with you. We might not be highlighting the strengths and the potential to this pool, so we'll go back and look at the materials with you and make sure that we're really optimizing the listing materials to. To highlight all of that. We can, you know, try to widen the buyer pool. Sometimes we'll do targeted outreach if it's necessary. But at the end of the day, what we'll need to do is really look at, you know, reevaluate pricing and seeing if we're aligned with the market realities. But good news is that we're here. We don't. We want you to get. We don't want to leave any dollars on the table. However, we will help you, help you shape a deal that will make the best sense for you. Also, let's say that the, well, I don't want to try to grow into that valuation or I don't want to accept that number. Well, then there's ways that we can help you strategize around offer structures that will help bridge a gap. There's a delta between where your value is and where the market value is. And then that's when we can start talking about earnouts and contingencies and that shared risk, shared reward scenario. That said, you know, goodwill is important. You need to know who you're, who you're making these agreements with and you need to believe them. You need to know their pedigree and track record and experience and so on and so forth, in addition to making sure that they have the capital requisite in order to put into the business post to help you reach and realize those goals.

Right. And I'm glad that you mentioned deal structure. So let's, let's go back into this situation. You price strategically and let's say Multiple buyers are 10% below fair market value, essentially where you're listing at. And let's say multiple buyers are at that price. The cool thing about having multiple buyers is now you've got the negotiation leverage where let's say there's for example, three buyers that are all at list price and it's 10% below fair market value. You can counter because you have the leverage, you've got multiple buyers at the table and you can counter with multiple different creative deal structures. So what do I mean by that? Yes, price is important, but what if this buyer, any of these buyers could give you a higher purchase price so you go up 10%. So now you're at the price where we were strategizing before we went live on the market. But in return you take less cash up front or you give the buyer more time to pay back. Overseller financing performance based earnouts get really creative. There's different ways to piece a deal together. And again, because we specialize in SaaS, this is what we do. We've seen all kinds of different deal structures that take place in today's market to get you over the finish line and also hit your goals. So think about if someone paid you all cash versus if someone could get a higher price and you gave them some seller financing or an earn out that will hit your goal of hitting a higher overall transaction value. If that's what your priority is. There's different ways to go about It So again, reach out to us. We'll tell you the different strategies and go about getting a higher price, more cash up front, less seller financing. We can get as creative as needed to hit your goals and make it a win win situation.

Yep. And I remember saying, an old timer told me once that if you can agree, if there's a high level of goodwill and the parties agree on total consideration, the rest can be solved with structure. It's pretty simple, right?

It's a great thing. Put yourself in one of the three buyers shoes, for example. You know that there's competition, there's other buyers, and if you as a seller said, hey look, it's very competitive, several strong offers on the table, is there any way that you can make your offer stand out and provide some more guidance to help me win the deal? And it's like, all right, well are you open to this structure, this structure, this structure? And as a seller, just know you've got to give something to take something. So if they're coming up 10% in transaction value, what are you willing to give up? Is it less cash up front, a little bit of risk on the seller financing, get paid back over x amount of months. At the end of the day, again, we're all people, treat each other fairly, come to win win situation and hit your goal. If you really, really care about that extra 10% shared risk, shared reward, boom. All right, next question here. When pricing 5 to 10% below fair market value, how do you determine the exact percentage to apply? Paul, you want to take this one?

Well, looking at our comps, I mean, we're going to be coming back to you with a range in value, a broker's opinion of value. So Rene, I think your business is worth, you know, 1 to $1.2 million. You know, list price. And then I would just simply apply th, those, those discounts to it. You know, assessing the financial health, obviously the, the growth potential, looking at your churn, all those other components of your business are super important. Looking at the buyer demand for your specific space is going to be important in deciding if it's 5 or 10% below. Right. If there's low demand, maybe you're going to want to price more aggressively to inspire more conversation, going along with the same business or marketing thesis. And then of course, you know, going back again to really realizing your strategic goals and aligning objectives for quicker or maybe, you know, pricing it at fair market to, to if you have a little bit more time. So what did I miss there? When you're, I'm sure you've got some other great pointers.

Yeah, that's, that's pretty much it. You, you hit everything there. And you know, Paul and I always talk about good fundamentals and making sure it's a good listing. So let's go over a little bit of that. So think about what a buyer is looking for, especially in today's market. They're looking for ARR recurring revenue. Is that a high percentage of your revenue growth rate? Is it growing year over year? Is it, did you have one really good year or is it growing consistently year over year for the last few years? Is it predictable? That's really what a buyer needs to know in order to limit their downside risk. Is it profitable? What's the percentage? If you've got a higher profit margin, then yeah, we're going to price it at a higher price and buy. We've got more buyers to reach out to. And then how long have you had product market fit? How many years have you been in business? What is the reason for sale? If it's, again, if you've got a good reason for sale, buyer is going to jump all over that and again, make win win situation to address your concerns for price, timing, transition. And then from there, if you've got KPIs above industry benchmarks. Again, that's what we think of when we think about good business fundamentals and what a good listing looks like. And you'll have more flexibility there when it comes to pricing.

Yeah, and I think nowadays even more so than ever in my career, you know, really having a SWOT analysis on the, on the business is super critical. Right. Really understanding what your strengths are, what your weaknesses are and what is it, what is the competitive situation out there? I mean, we've seen it here firsthand where, you know, because technology is moving so quickly that if, if companies aren't iterating quick enough, they could lose market share. And it happens. So really looking at the market, your potential buyer pool that would, you know, what is the action in your space is super critical.

Right. Okay, we'll keep sending in questions. We've got a few more here that are coming in that are really good and got some time left. So this is my favorite part, the Q and A part. Let's go to this next question here. What are factors that you guys have seen which allows a company to price at or above the goal price and still do? Well, Paul, you want to take first crack at this one?

Yeah, it's, I mean, I would say, you know, having a really unique Market position. Your products are just exemplary. Your leaders in the market, strong financials, you know, consistent growth, consistent profitability, your brand reputation, and then obviously all your other strategic assets with your infrastructure, your ip, your, your partnerships, your customers. The logos are big. Your tech, that's one thing that we see frequently is tech deficiencies that we'll learn late in a process and that could put a deal sideways. However, if we see all of this up front, they're highly valuable. And because those funds that are sitting out there ready to deploy, they're going to be competing for that business. You know, the, the, the more attractive, the more sound, the more infrastructure with all those components I mentioned. It's just you're going to have more, more buyer strategic and otherwise vying for that business. Therefore, you know, really helping you reach max value.

Right. I'm glad you brought the topic of different types of buyers. So again, one of the cool things here at acquire.com, the 500,000 buyers that we have in our proprietary list consists of active buyers all over the world, but it consists of buyers that are operators, investors, investment groups, operator groups, private equity, public companies, strategic buyers. It's the whole gamut. And again, when we price strategically, you're having all of these different buyer profiles compete to win your listing. And at the end of the day, once you have that leverage, you can negotiate to get better terms, better price better. But the key there is to make sure that it's exposed to as many buyers as possible and then to having the right strategy to go ahead and get the best price, best terms, best transaction for you. Select the winning bid.

Can I call? There's one that just came in from mk. That's a good, good question. If I could just pull this one up. What is the average time frame from listing till closing? And I mean, all of these strategies can highly inhibit or expedite that process. But I'll give an example of a deal I had last. It was, you know, a SaaS SEO agency we priced 15% below where the average mean comps were coming in at. Against the found he was very trepidatious around it and I think he was pleasantly surprised. We had a side bet too on how many NDAs would come in in the first week. And I crushed it. So he owes me a beer still, but 101 NDAs in week one. Three offers and one accepted. LOI closed in 32 days at, I think it was 1.4 million. So it could be very quick to answer your question. Mk.

Right. And again, what we're doing at acquire is very fast from what we're used to in the rest of the market. If you look at other places, it's 6 months, 9 months, 12 months, even longer. Sometimes it takes years to close a deal. Some of our deals that we've closed most recently are 45 days, 60 days, as Paul mentioned on another deal, 30 days. Because we're specializing in SaaS in these type of deals, seven, eight figure deals, we have a solid process to make sure that we get you in front of the most qualified buyers as possible. Because you only get one time to list. You got to make sure you do it right. And you only have one chance to leverage and make sure that you have the best price, best terms, best offer structure and selecting the winning bidder that's highest probability to close. So I'm looking at some of the deals that I've closed most recently. It's like one month, two months, one month. And these are deals that are getting 80 NDAs, 183 NDAs, 93 NDAs, 125 NDAs, four offers, six offers, five offers. So again, we specialize in this. We eat, breathe, sleep, M and A. We're going to give you the advice as if we're a family member, a close friend, and we're going to tell you how it is. And the last thing we want to do is leave money on the table. Because if we want to get you the highest price because we get more commission, that's our number.

Because we're going to tell you what.

You need to hear. We're on the same team, we're on the same team. We're going to tell you what you need to hear. Go ahead, Paul.

Not what you want to hear, not.

What you want to hear. We're going to try to get you the best price, the best terms, but more importantly, the highest probability to close. It's one thing to list somewhere and try to wave this number around and someone does. You know, if you don't have the right data to ensure that you're pricing the market, it's. If you have a zero percent probability, what is that chance of getting that at above market price?

I want to get you to want to hear what you don't want to hear. You know, I mean, that's, I want you to want to hear it. You need to hear it. And it's, it's important that you understand it. If you don't understand it, you're at a disadvantage. Even in negotiations with a more experienced buyer, you're going to be at the wrong side of that table.

Right. And then we've got another good question. What kind of businesses are getting more buyers? So that's a great question there. What buyers are looking for in these days and what some of these comps that I just mentioned, they all have in common. They're SaaS, they've got high percentage of recurring revenue, their growth rate and market share are strong, highly profitable. Again, the higher the profit margin, the better the profit and revenue multiples are in line with what's trading in the market. And again, we've got thousands of comps at our disposal. We've got our finger on the pulse there. Available due diligence materials, you've tracked all your revenue expenses, your contracts, you have all of the homework necessary for a buyer to do. Proper due diligence and then a solid reason for sale. And just being honest and upfront, making sure that you answer questions in a timely fashion, being honest. And from there you really have the chance to leverage as many buyers. Once you have those good fundamentals, those good fundamentals, if you can hit as many as possible, that's when you're getting 18 offers plus and 125 plus NDAs.

I was just thinking, kind of devil's advocate there, like the buyers that are passing on deals and what are causing them to turn around or passing on it. And you know, as a, as a founder, looking at your, your churn, looking at your tech, if it's third party tech, looking at your agreements, if you have tech deficiencies, that's a big gotcha. And then also customer concentration. And you know, in the outside world, 10% of your overall revenue is considered a customer concentration issue. And these days it's even a little bit, it's lower than that. I mean we're seeing 5% is a concentration issue. So just looking at those components of your own business, again, understanding your own business's financial and customer metrics is very important.

Right. So we're running out of time here, so let me go ahead and get to one last thing. So we've got a question from Jonathan saying If we price 10% lower, fair market value and we get an offer. So the cool thing about our platform is anytime you get an offer from any buyer, let's say you have 125 buyers that signed it, NDA. Once you get that first offer, all of the buyers will be notified, hey, this listing has received an liquid reach out to the seller as soon as possible before they make a decision. And then the fun part starts rolling. When you get the second offer. Third offer alerts are just firing back. I've had one time, like, five alerts back to back to back to back because of this FOMO and sense of urgency. So that's. That's a cool thing that we have on our platform, that. That helps you create that sense of urgency and get the best buyer.

Yeah. And we do have that, and we do just to close that out right now. We do have the ability, you as a founder that's listing or us as your advisors, we do have an ability to reach out to the whole buyer pool rapidly and quickly, all at once in order to keep them up to speed on the process.

Awesome. Well, before we let you guys go, let us know how we did. Give us some feedback. Say something in the comments. Give us another shout out where you're from, what time it is over there.

Thank you for the late, late birds and the early birds. Appreciate you.

And thanks again for tuning in. You all are awesome. And you all are the reason why we do this and why I wake up every day. Exactly. Some of these stories are amazing. So thank you, Earl. Thank you, Emma. Thank you. All right, awesome. Peace.

Thanks, you guys. See you next time.

See ya.