There comes a point in every founder’s life that they must leave their current business. This means selling the company to regain capital. However, many founders find themselves stumped on the path to getting acquired.
Fortunately, MicroAcquire is there to help you close trading your business without anchoring you with a hefty commission fee. This episode of SaaS-Story in the Making will provide you with gleaming insights about SaaS acquisition from B2B SaaS Sales Coach and Host Matt Wolach and MicroAcquire’s CEO Andrew Gazdecki.
Read on and find out just when and how to sell your software company!
Podcast: SaaS-Story in the Making
Episode: Episode No. 226, “When and How to Sell your SaaS – with Andrew Gazdecki”
Host: Matt Wolach, a B2B SaaS sales coach, Entrepreneur, and Investor
Guest: Andrew Gazdecki, CEO at MicroAcquire
TOP TIPS FROM THIS EPISODE
Align Your Business & Interests
Even though it’s rewarding, building a startup is irrefutably challenging. And if you don’t like the startup, then that situation that is “challenging” mutates into “grueling.” It may start to feel like life is being sucked out of you or as if you lived for decades you might as well be a vampire.
To prevent that, it’s best that you make it so that your business is aligned with your interests. Gazdecki advised listing what you like and don’t like doing. Then, you figure out what style of business you want. Gazdecki asked the following questions, which you can use as a guide:
- Do you want to get rich?
- Do you want to disrupt the market?
- Do you want a lifestyle business?
Next is that you think of what customers you want to serve. There’s just going to be a difference between a founder who loves his customers from a founder who doesn’t. If you enjoy serving your customers, you just inevitably go the distance even when the going gets tough.
Leverage Your Core Strength
Apart from taking your passions into account, it’s also wiser to focus on what you’re good at. If you’re good at building startups, then you can just build. You don’t need to scale it as you can always sell it to someone else who will.
Similarly, if you don’t want to create something from scratch, then you can just purchase a company. Gazdecki’s MicroAcquire would be helpful as they connect verified buyers and sellers directly. This means that a business broker’s super expensive commission fee can be mitigated.
When you do what you want to do, it naturally keeps you going. It also accelerates your progress since you keep getting better at your field the longer you stay in it. It becomes a win-win scenario for everyone involved as a builder profits while a scaler easily grows the company.
Sell in Order to Move On
The best time to sell a business is undoubtedly when you want to move on to better things. It could be that you realized you no longer like what you are doing. Maybe you never liked it in the first place. It can just be that you’re ready for the next step of your life.
Selling off the company means that you gain the capital that you need to put in your next business. That capital would make it so you can work on building the business or you can just buy off an already functioning company in MicroAcquire and make it better. Matt himself has done the same thing and can attest that MicroAcquire is superb at helping founders buy and sell businesses.
Avoid Key Roles If Planning to Sell
If you are a builder who just wants to sell, then it’s a great idea to avoid being in key roles. For example, if you’re the lead engineer in the company, you might want to hire someone to take over the post. This is because the business must function even without you so that you are free to leave it.
If you are someone looking to buy a company, you probably won’t want to buy it if it’s heavily reliant on the present CEO. As soon as that CEO leaves, the business is crippled and it may take a while to hire someone new who would be able to do the job as successfully. The point is, instead of working in the business, work on the business.
Focus on Strategy & Team Culture
After you’ve detached yourself from key roles, you can focus on the business as a unit. You no longer need to come up with services to offer or create new products. You can just grow the business itself by strategizing on how to scale it even faster.
You can also work on the team culture. Cultivating a really good company culture would mean that everyone works well together and is motivated to do their job every day. This, not only prevents employee attrition but ensures that the company will reach feats impossible for the top solo player to achieve.
Software Companies Have a Shelf Life
Being in the technology industry would mean that market disruption is pretty much recurring like the weather. A tech founder cannot expect to pass down their business to the children as some new innovation may cause the company to become obsolete. Gazdecki notes that companies are generally built to be sold because of this.
There Are Builders Then There Are Scalers
Some people just like to build while some people just like to scale. There is nothing wrong if you can’t do or are not good at the other. We all have our strengths and weaknesses. We just need to learn how to play as best as we can with the specs that we have while also working on upgrading ourselves. Of course, we also need to be mindful of the playing field and adjust accordingly.
Founders See Potential While Acquirers See Present Value
Gazdecki advised that it’s either sellers are not prepared to actually sell or that they’re overvaluing the company. The reason is that they see the potential earnings of the company a decade from now instead of just the current worth. On the other hand, buyers see the reverse and this is with good reason.
Potentials are just potentials until they’re manifested. There is no guarantee. Oftentimes when we try to sell something we made, we may see it for more than it really is. As Gazdecki stated, it’s akin to “a strategic bet based on, you know, if you have flawless execution, and maybe a little bit of luck and tailwinds.”
It’s understandable that a founder would do this because they spent so much of their life on the company. However, this may make selling the business extremely hard which means more time spent maintaining it. That time would have been better spent on a new venture that actually makes the seller happy.
[19:25] “You don’t have to build a billion-dollar company to be successful as an entrepreneur … Just being able to pay your bills and like being your own boss. I mean, I think for a lot of people, that’s enough.”
[22:38] “The things that founders think are wrong about their business, you know, are actually opportunities for new buyers.”
[23:01] “Present your business with warts and all. And I think, you know, that also goes along the lines of… You know, be truthful, be honest. And then don’t play that weird dance of, like, we’re for sale, but like, not really.”
[25:28] “Too many times you get ingrained, and you’re like, ‘Well, I can’t even step away. I’m too busy because of this.’ And, obviously, if that’s the case, and nobody’s gonna want to buy your business and get you out of there if you’re the main person.”
To learn more about Andrew Gazdecki and MicroAcquire, visit https://microacquire.com/.
You can also find Andrew Gazdecki on LinkedIn at https://www.linkedin.com/in/agazdecki.
For more about how host Matt Wolach helps software companies achieve maximum growth, visit https://mattwolach.com/.