The Real Reason Founders Are Selling Their Agencies

29 Nov 2023 · 0 min

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In this segment, Eric Siu explains that agency founders are increasingly putting their businesses on the market primarily because they lack a steady stream of new leads and are losing existing clients. While agencies can generate strong cash flow and, when scaled effectively, command significant enterprise value, many owners are unaware of this upside. Siu notes a growing interest in agency roll‑ups, with more investors emerging, but the core driver for sales remains the inability to sustain lead generation rather than a strategic desire to move on.

When you don't have good leads coming in and you're losing a bunch of clients, of course you're looking to sell agencies. They're not only a great cash flow business, but if you can make it work at scale, the enterprise value that you can command from it can be pretty significant. Most people just don't know that. Do we think agencies are ripe for roll-ups? I would say in general right now, more and more people are coming out of the woodwork and saying, hey, like, you know, we're looking to sell the thing right now. And then when you ask why, it's like, oh, you know, I'm interested in moving to the next thing. But the real reason is they're not getting that many leads.