Andrew Gazdecki is a serial entrepreneur and CEO of Acquire.com. After going through two successful exits, he decided to build the world’s number-one startup acquisition marketplace.
If you're thinking about selling your startup or are building a venture with an exit in mind, you'll find the episode rich in actionable insights and pitfalls to avoid.
Andrew shares all his secrets:
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Transcript POD 025 | Andrew Gazdecki
[00:00:00] Andrew: if I had probably one mistake, probably just being a little arrogant with buyers and not understanding that when you speak to buyers they're looking at a lot of other companies and as a founder you put so much blood, sweat, and tears in your business that you think you're special. You think you should get, 20X revenue as a multiple for your business. And that's just not the case.
[00:00:25] Michel: Hi everyone and welcome to Growth Leap. I'm your host, Michel Gagnon. We talked to pretty awesome business builders who are designing disruptive and meaningful companies.
[00:00:39] Welcome to the show everybody. Today we have a great guest and we have Andrew Gazdecki, who's joining us from the West Coast. Andrew is a serial entrepreneur. He is founded Bizness Apps and Altcoin.io which he has sold, and now is has founded, and he's now the CEO of acquired.com.
[00:00:59] So Andrew, welcome to the show. It's a pleasure having you with us. How are you?
[00:01:04] Andrew: Yeah. Thanks so much for having me. I'm excited.
[00:01:06] Michel: Andrew, before we get started, I'd like you to, you've heard that question before and I'm gonna have to ask it to you again, but, tell us, let's say a bit the short story of acquired.com and how you decided to launch.
[00:01:19] Andrew: Yeah, definitely. So acquire.com is like my 10th startup probably. And I candidly built it after having two companies acquired and just going through the whole process and seeing how hard it was from everything, from finding a buyer, going through due diligence, understanding the legal process, and I just felt like there needed to be some sort of, More efficient way.
[00:01:47] So looked at the market and I saw no innovation. The typical routes of selling your business is maybe a strategic buyer approaches you and everyone thinks, Google shows up and that's how you get acquired. But there's so much more to it. And so what acquire.com, does, is brings the entire startup ecosystem together with 200,000 plus buyers.
[00:02:12] We have tools for legal doc creation, tools for due diligence. So really we're just trying to help startups really understand acquisitions more 'cause it's such a mystery. It was such a mystery for me when I had my first business acquired and make that whole process easier from finding a buyer all the way to when ideally the wire hits your bank account and your successfully acquired.
[00:02:40] The mistakes Andrew made when selling a company for the first time
[00:02:40] Michel: Is there anything specifically that, you've been through and you said, this is a mess, or maybe something specifically that you felt you made a mistake, when you sold, , the two companies.
[00:02:52] Andrew: I'd say with the first business if I had probably one mistake, probably just being a little arrogant with buyers and not understanding that when you speak to buyers they're looking at a lot of other companies and as a founder you put so much blood, sweat, and tears in your business that you think you're special, you think.
[00:03:13] You should get, 20X revenue as a multiple for your business. And that's just not the case. And so I was little standoffish with some buyers in terms of, negotiations. Because that's, I didn't understand the process. I didn't understand, how they were valuing the business really how to get them excited.
[00:03:33] So if I could go back in time, like there, for example, I had prior offers before actually sold the business five years before that. And I turned 'em down. I felt had more gas in tank. I'm glad kept going, when I reflect back, was 25, I didn't wanna work at a big company just yet.
[00:03:55] And so just, that lack of understanding, if I could go back, I think I. Probably could have optimized the price a little bit more or, ran a better process. And so that kind of always lingered the back of my head. And when I sold the business, I can't even tell you how many friends had reach out about, like all the things I just mentioned.
[00:04:18] Like just even the start, like how do you find the buyer? Like how do you find private equity firms? How do you speak, what they look for? Almost I discovered something that no one knew about, including, what was due diligence? Did you survive it? What did, what law firm did you use?
[00:04:34] How long did it take? All this sort of stuff. And I just, that's where kind the light bulb went off. 'cause I always say, we have so many books on marketing, sales, fundraising, there's like a hundred thousand books on that, but there's not much information on the exit. And it's this.
[00:04:52] Mysterious process for a lot of founders. And making that more clear is a big goal mine. But yeah, I made many more mistakes. Like another one I'd say is talking to one buyer at a time. So I'd have, strategic buyer reach out and then you kinda have conversation and then a few months reach go by, you have another buyer reach out.
[00:05:13] And really, during an acquisition, what wanna do is you wanna talk to a lot of buyers all at same time and run a process. 'cause there's a saying, if you have one buyer, you have no buyers. And I didn't know that, so I thought, okay, this person's really interested in, potentially acquiring my business.
[00:05:30] But just like in fundraising, what you want to do is you wanna compress the timeline and ideally control the timeline.
[00:05:38] When you sell your business, ideally and you know you're going for an acquisition, you want to control that timeline and have something called a deal schedule available where you set a deadline for, meetings, you set a deadline for informal offers.
[00:05:54] That's where you get to a point with buyers, but you're talking to bunch of different buyers all at the same time. So essentially what you're doing is you're creating a process where it's not if your business will sell, it's really who are you gonna sell it to. And so you'll set deadlines to keep all of the buyers on track towards this end goal of receiving a final formal offer.
[00:06:18] Call it a letter of intent. And by controlling that process you substantially increase the amount of offers you get. You're able to negotiate against other offers to increase and maximize your exit. And then you can negotiate on everything from price to terms.
[00:06:35] But again, going from speaking to one buyer you're talking to no buyer.
[00:06:39] You have no leverage. And they can just say, and this really did happen to me at times, like I'd have good conversations with, let's say it was like a do yourself website builder. We talked to all those types of companies. They'd say, Hey, let's check in three months. And when you do that, you lose all control and you're just basically at their mercy.
[00:06:57] That's one of the key ways that acquire.com help startups is when you list on acquire.com, you're, you get instant access to all those buyers all at once. And in a way mistakes I made I just tried build a marketplace that corrects all those mistakes so other founders don't make 'em.
[00:07:17] Michel: One of the things that you've said also in the past, I think you had a little feud with the TechCrunch, where you basically were complaining about the fact that they tend to really cover VC-backed businesses. If you were an entrepreneur in the eighties or nineties , unless you were successful, you were a loser, right? And then entrepreneurs became this hot new type of people, and we've put a lot of emphasis on fundraising and what I've seen is a bit as usual the pendulum starts, going back in the other direction. And we've heard a lot more about bootstrapping. The question that I have for you with all of this is, maybe it's a preconception, but people used to build a business because it was a project for life.
[00:08:01] That's how the big dynasties were built, right? Then we've got into a point where with vc funding growing quite a lot. You've seen, let's say a very different type entrepreneurs who are basically building a business to sell. So my question to you is , is there a good reason to start a business or is there a good reason to sell?
[00:08:22] Andrew: Let me touch on the TechCrunch part too. So I actually I love TechCrunch. I actually grew up reading them and getting inspired by them. And so this is back in, let's call it 2008, 2007, something like that. And they would write these like really inspiring articles about startups you'd never heard about.
[00:08:43] And they had raised no money and it was stories about how they're building the businesses. And then with Bizness Apps, I was a bootstrapped company. They covered us like 10 times. I've been a guest author for TechCrunch. And then in 2020 and 2021, yeah, they just started writing all about all these fundraising .
[00:09:04] And I was just like, what happened to you TechCrunch? I miss, like those inspiring like stories about startups at the very beginning. 'cause I can't relate to the, Hey, we just raised like a hundred million dollars. I'm like, that's, I'm happy for you. But, I guess the nostalgia of just the stories that really I could do that too. There's just two people building something. They're just starting out. This is interesting. Like it felt, it made entrepreneurship feel possible. 'cause back in 2010, if you built a SaaS company, you had no idea what you were doing. No one had figured out, like account executive, SDR, sales models or really any sort of go-to market plan or how to build a, SaaS was just emerging.
[00:09:50] But anyway, so yeah, we did a kind of a beef marketing campaign where we launched a publication called bootstrappers.com just to really, bring that back and bring more light to people who aren't raising venture capital. And so that, that was a lot of fun doing that.
[00:10:05] But it was really just beef marketing, it was just a way to shine light on this isn't the only way to, to build a business. It's not just raise a bunch of venture capital and then try to go public and good luck, hey, there's this other option but to answer your question when it comes to starting a business, I always recommend for entrepreneurs to, to write down what they want.
[00:10:29] Write down what you want. And what I mean by that is you could write down, I want $2 million, or something like that. That's entirely fine. I always think it's funny when people are like, this is like my mission. Like I'm, I'm a mission driven founder, and it's someone offered you like a price, everyone has price.
[00:10:47] I think you, you really figure that out after an acquisition where, if entrepreneurship like, is something that you just you're built, like you enjoy building stuff. Because you have opportunity to go lay on the beach and then you figure out this is boring, and then you go back to building another startup.
[00:11:06] And then a lot of entrepreneurs like myself go back to building other businesses just because we enjoy building it. So going back to, writing down what you want, that'll really di direct a lot of your decision making in terms of how you finance the company, which is arguably the most important aspect.
[00:11:25] For example, if you just want $2 million, bootstrapping is a far more practical path to achieving that outcome. Now if you wanna make $200 million or something like that, you're gonna to build a much bigger business. And so just starting there or just write I don't wanna manage people. If that's the case, then definitely don't raise any capital.
[00:11:47] But the capital part just limits so many options and I think entrepreneurs think it's make a pitch deck. Go pitch investors, get some seed money, build the product, and it's all just backwards. And a lot of, I think a lot of media has just skewed this perception of this is how, a startup should be built when there's a other paths depending on your goals.
[00:12:10] And both paths are awesome. acquired.com is venture backed. Business apps, bootstraps, I've done both paths. And they're different. So write down what you want. If wanna disrupt up the market, that's also gonna dictate, the actions that you take. Reasons to start a business, figure out what you want.
[00:12:26] Maybe it's freedom, maybe it's again, just get rich. Maybe it's you just like helping people and you wanna build something useful. Maybe it's, you want to provide people with jobs, you wanna just. It could be number of different things, but figuring that out is key because it's different for everybody.
[00:12:46] 'cause everybody's different. And then in terms of when is a good time to, to sell your business or reasons to sell your business? It could be anything. Again, you could be, like with business apps, I personally sold because I was just burnt out. I was in the business, it was doing well. We got offer that was really hard to say no to.
[00:13:07] And I had fiduciary duty to sell that business. And so I did. And I couldn't I couldn't be happier with the outcome. And the second business, AltCoin really wasn't going that well. So we just basically sold the assets off to another company. That's a story for an another time with a short backstory that is that the SEC came out with a bunch of guidelines and we were basically building like a.
[00:13:32] We were trying to make sending Ethereum faster on the Ethereum blockchain, obviously using a layer two side chain solution. And we were, the first application of that was gonna be like a decentralized Coinbase, which is essentially an unregulated securities exchange, which is highly illegal. So we said, Hey, let's sell assets to someone who has, the proper regulatory licenses.
[00:13:55] So it could multiple reasons. Maybe you build something and you want to cash your chips in, maybe, you're burnt out and you wanna move on to something else. Maybe you've already started another company, maybe you wanna retire. There's so many different reasons.
[00:14:08] But in, in technology, what I think is important to also note is I can't even tell you how many entrepreneurs have received offers, turn 'em down, and they never get an offer of that same amount, type ever again. Technology has a shelf life, like Bizness Apps as an example. For context, it was a do yourself mobile drag and drop, mobile app builder.
[00:14:35] It's been disrupted like 10 times since it was acquired because new technology comes out, it's faster, it's more efficient. And so with tech companies, they do have shelf life. They have a, an arc of, this is novel technology and then you always run risk of having another company come out with product that's substantially faster, cheaper, easier, whatever may be.
[00:15:00] And so I always recommend if you do get an acquisition offer, consider like it's only offer you're ever gonna get because it might be.
[00:15:08] Michel: I wanna talk about sales and marketing, but also about team building. But before we get there, one of the things you've said not so long ago is "don't give up your happiness to build a business or reach some random business goal, because that won't make you happy.
[00:15:23] You'll just reach that goal and then turn to your family, and they may not be there. Success is really defined by you. You can choose to be happy".
[00:15:30] We don't hear that a lot from entrepreneurs, I would say. I think the whole burnout and, psychological challenges that people have when they run a business , we don't necessarily talk about that enough, but what I like about that quote is that, we don't know each other that much, but every time I've been through your content your interviews, there is that feeling that you're a bit of an old soul. And I'm curious if there's something that triggered you, like to start thinking that way or it's always the way you've seen business and life.
[00:16:04] Andrew: Good question. I guess if anything I've always, I, when I look at something, I try to form my own opinion instead of just oh, I wanna do exactly what that other person did. And I'm also very statistical terms of, my thought process. When it does come to business, I can't even tell you how many, entrepreneurs I've met that I know personally, and they just build this job that they hate.
[00:16:30] They, and it's usually a symptom of, they took someone's advice that they admired, like they wanted to be this person. I'll give you an a real example. I a friend who's running a Ave, a big venture backed company. He's stuck in the business for, I think he's at like year 12 now.
[00:16:49] Feels trapped managing ton of people exhausted all the time. And he doesn't wanna do it, and then, he's gotten to a point, he doesn't know what he is working for. That's why I say write down what you want. Maybe it's spending time with like your family or friends.
[00:17:05] You want freedom. You wanna be able to just interact with a certain type of customer. So taking that maybe that question in another direction. I think being happy with what you're doing is so critically important because if you're not, there's someone out there that will be, and they're just gonna outperform you.
[00:17:26] They're gonna put in that extra 10%. The customer will really notice the difference in the product and the service that they provide, because they actually are, they enjoy what they're doing. And so being able to find that, whatever it is for you, again, because everyone's different whether that's building a small company, medium company large company understanding really deeply who you are, I think is really important because there's no point in my opinion, doing anything that just makes you miserable all day.
[00:17:57] Andrew's preferred marketing strategy, and why it's the most defensible approach
[00:17:57] Michel: Now I want to talk about sales and marketing. You've written somewhere that "if you build it, they will not come without sales and marketing". You've done that before, launching new businesses. Do you have a playbook for sales and marketing whenever you launch a new venture or anything that you know, you've done over the past couple of ventures that you've had where you said, okay, this is the way to go.
[00:18:20] Andrew: Obviously you gotta get the basics. When you talk about marketing, there's SEO there's. Social. There's paid, there's brand storytelling, going on podcasts like this. There's a number of different things.
[00:18:33] I've always been a big brand person in storytelling. 'cause that really creates an emotional connection with your customers and it's probably the most defensible marketing strategy in my opinion. And David Cancel from Drift told me this one time where back in, there's been three eras of SaaS.
[00:18:52] One was back in, let's call like 2010, the first one like really build the product, won the market. And then in, call it 2015, the first company to really figure out the best go to market model in terms of if you have a sales team, many account executives do you need? How many SDRs do you need?
[00:19:12] All that fun stuff. And then the third wave of SaaS has been a brand where it's a last defensible mode within your business because everyone knows how to build sales teams. Everyone knows how to run marketing campaigns. You can generally copy any sort of paid marketing campaign in a day.
[00:19:31] So I like to focus lot on storytelling and brand and really humanizing your business. And also, being the, like me personally being the brand ambassador for all of my companies, like at Bizness Apps, we've always had a, a mission that we're fighting for. And what mean by that is, branding an enemy.
[00:19:52] And, at business apps, we were fighting for small businesses. Our view was, Starbucks could make a really slick mobile app for a half a million dollars, but if you're a local coffee shop, you don't have a half million dollars. And so we were helping little guy compete with big guy.
[00:20:10] At AltCoin, we were, our positioning was, there's like centralized exchanges and we wanted to be a decentralized one. So you have full security and control over your crypto assets. At Acquire.com, we really champion, bootstrap companies because those ones are the ones where when you're able to sell them, the founder has such a large portion of ownership, it's a meaningful exit.
[00:20:35] And so that, that's always really resonated me is. Companies that are really clear on who their customer is, and then really brings them along for the journey. Like with Acquired, what I've also done is bringing people along, like we were originally micro acquire and brought them along for the rebrand, brought, all of our users along for, features that we've developed or when we initially launched.
[00:21:01] And I always liked that because then you get, a group that you know, really roots for you to succeed. So long, long story short, brand and storytelling have always been my two favorite channels in terms of marketing and sales.
[00:21:15] How Andrew builds teams as a non-tech founder and the three attributes in he looks for
[00:21:15] Michel: You're pretty good I think with storytelling which may not be the case for everybody or for, people who tend to be like technical founders, but talking about technical founders, this is not who you are, right? I'm a bit interested in, how you've built the teams around you. In my experience a big chunk of your success comes from the team you have around you, especially at the very beginning. Do you have any tips or, stories around what you've done to be able to build the right team, especially for businesses with a big tech components when you were not necessarily like the tech lead?
[00:21:52] Andrew: Yeah, definitely. So I am not technical at all. I can design stuff like a Canva level experience. I grew up like playing around in Photoshop. I I think the most technical thing I've ever done is I made I made the like website for, Bizness Apps way back in the day. Bought like a template uploaded it used, I was using Dreamweaver at the time, if anyone remembers that.
[00:22:18] But in terms of building teams I enjoy working with people that are, I always say I look for motivation, attitude, and skillset in that order. 'cause you can't teach you the first two. I can't teach someone to be motivated. I can't teach someone to have a positive attitude. But we can teach skill sets.
[00:22:38] And so when we hire people or when I've always hired people, I'm the last person to really interview 'em. The interview can be weird. It's I'll ask questions like, what do you like do for fun and do you skateboard or something? Just something fun just loosen off, get 'em laughing.
[00:22:54] 'cause I also think that laughter really bonds people together. And one of my core beliefs has always been people do their best work when they're happy at work. So I wanna know what inspires people, both personally and professionally. 'cause I wanna help with both. 'cause I understand that every person that comes into it comes to work with me.
[00:23:12] Number one is a huge compliment. You're going to, you're choosing my company and to work with my team, and you're gonna spend more time with us than possibly your family. So that truly means a lot. But I also understand this isn't your dream job. Like where do you wanna really go in five years and helping that person achieve whatever outcome they're looking for.
[00:23:33] And then also, within the business, like how can we help them? Be more experienced and lead the business more equipped with when they actually, first entered the business. A lot of that is, is culture. You wanna have a team that, really helps each other and raises their hand when they see issues and really just supports each other, again, both personally and professionally, where you can laugh together.
[00:23:58] But when it's time to really get work done, you're focused, you're aligned, you're in sync. Because without those things you just have chaos inside of your business, and then you have high turnover inside of your business, and nothing ever gets done inside of business.
[00:24:13] Michel: I think when you hire people like the fifth, sixth, or 20th, it, things get easier in the sense. You still have to be extremely spec picky, I would say, especially at that level. But you already have momentum, right? You already have a core, you already have a team vibe and team spirit. I'm interested in when you really got started for business apps or acquired.com, right where you needed. Somebody who actually would build a technology, from the very beginning, what were you looking for? Is that somebody that you knew already? Or because you need person to be top-notch, right?
[00:24:51] Andrew: yeah. Actually, so for Bizness Apps, I pretty much hired just all my friends for the first 10 hires. 'cause we built the company in college. And so I went to Chico State. All of engineers were outsourced to different countries. I found 'em on Upwork. It was really scrappy business.
[00:25:09] And that's probably one the biggest mistakes I made. I, wrote book about the whole experience and have a whole chapter about, the importance of hiring people smarter than you as quickly as possible. And I really wish I could go back and, reverse that. And I remember a specific event where we were looking for a VP of marketing and he wanted, let's call like 150,000.
[00:25:32] I was 23 24, and I thought, I was like, what? We're not gonna pay that for someone to help with marketing. The way to think about it is that person's gonna grow the business much faster and also give you your time back so you can focus on, more important priorities than just the marketing strategy of the business.
[00:25:50] So for Bizness Apps, I floundered with it, but eventually really the product market fit was so strong, we were able to continue growing regardless of, we didn't need like a top tier VP sales or VP of marketing. The iPhone had just come out. We had built, a pretty good product.
[00:26:10] Our go-to-market strategy was white labeling and partnering with web design agencies that sell apps to their clients under their branding. And we did get to a point maybe around five years into the business where we started really recruiting. And I actually moved the business out of San Francisco, down to San Diego to recruit higher caliber exec team.
[00:26:33] So I made a bunch of mistakes in that first business. And then with Acquire, the first thing I did though is hired back all my previous execs that I had worked with that I enjoyed working with, that I knew were equipped to, really build out the business that we needed build. So probably not the best answer.
[00:26:54] I, I just learned from the mistakes of just, I indexed way too much on, I wanna work with people that I know and trust. And that can be, that can work, but a lot of times it goes completely wrong and you can lose some friends over it if business doesn't work out, if there, there's arguments.
[00:27:14] But I was lucky in that capacity where I'll give you a real example. Like my VP Product, his name Stephen Heisserer he was one of my, good friends in college. He came on at Bizness Apps and support. 'cause that's what we needed help with. It was do wanna join the team?
[00:27:29] This is where we need, and now he's world class product leader . Over time he just found so much passion in that role, he just grew into it.
[00:27:39] But yeah, Bizness Apps, I don't have a good I got the hires completely right. It more of, I got 'em completely wrong. But just the culture was so positive that we were all putting in sufficient work. But as the business grew and it got more complex and there was more moving parts, more management, more structure was needed right when we hired top tier talent that's when the business, really started to, really gain, additional momentum.
[00:28:08] Long story short Hire smart people like as soon as you can. I, 'cause number one, you can't do it all on your own. And number two, it, the sooner you can get 'em in the business, the faster you're gonna grow.
[00:28:22] Michel: In entrepreneurship there's a lot of dualities. There's one that is, between, I would say perseverance and stupidity. Where, you really have to keep pushing. You have to be able to get back on your feet when you get knocked down, but at the same time, you have to be smart and listen. And look at the reality because sometimes you just have to quit, right? Or you have to drop or you have to pivot. One of the things that you wrote was "a lot of people give up too early. Sometimes it can take two years just to get your first customer. In my business, before that Phone Freelancer was the precursor to Bizness Apps. So overall, I spent a decade focused on making it in the mobile app industry." So I find it very interesting because we live in a world where everybody wants everything right now. I'm sure you've seen or you've heard founders who are just sometimes either not doing the right things or pushing the wrong idea, at maybe the wrong time. How do you balance that?
[00:29:21] Andrew: I believe know, a big part of building businesses is mental. If you have a positive attitude, you're gonna have a much easier time building the business. I. Staying in the game, not giving up. I got an entrepreneurship out of just I guess survival mechanism.
[00:29:40] Like I grew up poor and like I, I didn't have any money. So like I had to, I naturally just gravitated towards, business. 'cause when wanted, a skateboard, I had to figure out a way to get money to buy a skateboard. I grew up skateboarding. To answer your question on that, I think here's a perspective.
[00:30:00] I think for a lot of entrepreneurs, they think that it's easy. It's hard. It's so hard. And so when they start the business, they get this like high of oh, this is awesome. Yeah. And like they're having a party. Maybe they like raise a little bit of money. 'cause again, that's like the blueprint or whatever.
[00:30:17] And then, A year goes by and it's this is really hard. And it's what would you expect? Did you expect to just like straight line all the way to the top? I always say, the people that know the most about winning also know the most about failing because they failed so many times.
[00:30:33] And so I think the best thing do in those situations is to just accept yeah, this sucks. This is my reality. It's okay to say that it's okay to accept that it sucks. And you do that, you stop feeling sorry for yourself and you start focusing on, the problems that you need to fix in your business, your life, or whatever it may be.
[00:30:53] So it doesn't suck. And there's another saying I like is learn to love it when it sucks. 'cause when you're building a startup, something always goes wrong, something pops up, someone leaves your team. Some crucial bug takes down your platform for hours, and everyone's canceling, bad stuff just happens.
[00:31:15] It just, it is part of the game. So I think, when you have that frame of thought that, every problem is an opportunity to get better. And yeah, we're gonna have some problems and they're gonna be tough, and we're gonna need to work together as team to get through it, otherwise not gonna make it.
[00:31:30] That's a mindset. I think the entrepreneurs that succeed all have the ones that don't, they just, it's it's just, it's, it can be overwhelming and it's stressful. It can be draining on their personal life, their health, whatever it may be. And if that's maybe entrepreneurship really isn't for you, and that's perfectly okay too.
[00:31:51] And so that's why I'm always big on, really understanding yourself and understanding why are you building a startup? What are you doing it for? Because I think need to have a really big motivator in terms of what's gonna push you through those hard times. And a big piece of that could be, I just like building products.
[00:32:11] I just like helping customers. I like building, a business that other people see value from. If you don't have a motivator like that and you get through hard times, it just makes it so much harder. And I think that's when a lot of entrepreneurs quit. But there are tons of, times when it makes complete sense to quit.
[00:32:30] The business isn't growing, you're not finding customers. Maybe you can't even find product market fit. You should shut that business down and you should start something new. I think the biggest failure is when you have a startup that fails and then you just never get back in entrepreneurship again because the scars just hurt so much.
[00:32:50] That failure was just too much and you can't ever get back in the game. But in reality, you just learned a ton. And so if you don't take the, those failures as lessons and apply them, again, and take another swing, that, that's when I you've learned so much. 'cause knowing what not to do is almost as important as knowing what to do.
[00:33:12] 'cause sometimes, when you talk to an experienced entrepreneur and I had a really great mentor by the name of Christian Friedland, he would just tell me like one thing of a mistake that he personally made and I'd be like, oh, okay, I'm not gonna do that. So again literally, I could probably think of some, but was a while ago.
[00:33:31] If you're an entrepreneur you're struggling, take a step back, maybe, take week off before you, you throw in towel, but really figure out, what drives you, what motivates you, where you get energy. Going on a rant here, but I hope that answers your question.
[00:33:46] Michel: It's a bit like art was a nigger who was saying you have to enjoy the process. Not just, it's not just a final result. It's going through
[00:33:54] Andrew: no too.
[00:33:54] Michel: The, ups and downs.
[00:33:56] Andrew: And even when you are successful, even when, like you do get this happened to me with Bizness Apps when after the company was sold I went I immediately started building, different company, because I was like two months out and already just missed having a team and trying to solve these complex problems. And that's when I really figured out okay, the rewards, the cherry on top, but really just the quote of enjoy the journey is vastly overused because it's so true. You have to enjoy process of just, Hey, I'm building this business.
[00:34:33] Each day I'm just gonna try and, move the business forward just a little bit. Those small percentages or small improvements in your business, they compound over say 5, 6, 7 years into something really meaningful. And I think a lot entrepreneurs think it's you, you hit, you buy that domain and and then all of a sudden in one to two years, you're making millions of, but it's totally not like that.
[00:34:58] What types of business sell better than others on Acquire.com
[00:34:58] Michel: I want to talk about acquire.com. I'm assuming that it gives you an interesting vantage point, right? An interesting view of the market potentially of what is hotter in terms of startups and what, sales better than other things. We talk a lot about AI these days. Is there anything that you've been seeing recently where you say, okay, like the, this is where things are going?
[00:35:24] Andrew: Off the top my head. We, I remember we did see a huge rush of AI companies when ChatGPT came out. That's definitely died down and those businesses are the flavor of the month, if you will. And profitable SaaS businesses, in my opinion, if you're an entrepreneur out there, Build profitable SaaS or profitable e-commerce business, I would target a narrow niche.
[00:35:49] So not just, Hey, I'm gonna sell small businesses, but I'm gonna sell to specifically restaurants that do this, or auto repair shops or barbershops that specifically do this. I go as specific as possible and then I build just a vertical point solution for that, industry. I'm speaking in terms of imagining a SaaS business, like something that, goes into really boring industry and you just own that small category that no one's looking at.
[00:36:21] 'cause everyone wants to build, the big large business that serves everybody, but. When you try to serve everybody, you end up serving no one, and you are good at serving a lot customers, but you're not great at one specific customer. And the best businesses that I see are typically boring.
[00:36:38] They're really profitable Saas that serves auto repair shops. That's a recent one that was acquired. I have a number of different stories like that, but it's always, really profitable business. So it's healthy. Buyers wanna see profitability more than ever today, so I think that's probably the biggest trend.
[00:36:56] And then yeah, specific where there's some sort of moat around the business that makes it unique in terms of, the product, customer acquisition. Yeah, just bas basically what described previously in terms of, they have a really, strong footprint in a certain industry and there's, opportunity to expand those are generally the best acquisition opportunities I see.
[00:37:20] What types of buyers are buying companies on Acquire.com
[00:37:20] Michel: And is there a specific pattern on the buyer side? Like I'm, maybe I'm completely wrong, but you may not necessarily have a big group of private equity buyers who would be looking for maybe bigger targets, am I wrong or you see pretty much everything in anything.
[00:37:37] Andrew: We do 5, 6, 7, 8 figure acquisitions. We work with some of the largest private equity firms in the world. We work with some of the largest public companies in the world. We work with venture backed businesses. We also worked with a lot of bootstrapped businesses acquiring other bootstrapped businesses.
[00:37:56] Then we also a lot of just individual buyers, just high net worth entrepreneurs that may have had an exit or a liquidity event while working at a company. Now they just wanna buy cash flowing business. So if you have a business that you're looking to sell regardless of size, we can facilitate that acquisition.
[00:38:14] andrew_gazdecki-siutfnb2w__raw-synced-video-cfr_michel-andrew-gazdecki_2023-aug-08-0533pm_the_growth leap pod: I think where the, where it tops out, if I'm being candid, would probably be when you get over 20, 30, 40, 50 million. That's where I'd recommend, working with an M&A advisor 'cause it's such a complex process when you're dealing and you just wanna maximize that exit. But still list on acquire.com because we can still drive you a ton of buyers, but you still have that a professional behind you.
[00:38:42] So we also work a lot with, M&A advisors that are listing larger opportunities 'cause of the buyer network that we've corralled within our marketplace.
[00:38:51] What Andrew focuses on to run a successful marketplace
[00:38:51] Michel: So you basically have, a not necessarily a very clear pattern on the buyer's side, but you cover quite a lot. Which brings me the, to the next question.
[00:38:59] I'm not sure if it is the CEO of Etsy. He was talking about when you have a marketplace, you have to keep the buyers happy and the sellers happy. I think the guy at Etsy, basically, he was saying, I wanna focus on sellers, right? If sellers are happy, if they have what they need, then that brings more buyers. Something like that. May have to check my notes, but if I'm not mistaken, you also have a clear view on that. What is it exactly.
[00:39:26] Andrew: Yeah, so our actual mission statement is to build the world's most founder friendly startup acquisition marketplace in the world. So if you look at all content that we create, all the podcasts that we record, all for startup founders to educate them on what is an acquisition, what is due diligence, what is legal, what are different types of deal structures?
[00:39:50] What's bad deal structure? What's a good deal structure? We also have a team in place that will review formal offers, that helps prepare startups when they're going live on the marketplace educating them on how to speak to buyers, how to negotiate and then just everything in between. So you're not going in there alone, I guess you could say, or going through that process without any of our support.
[00:40:17] So a large part of what we do is really just educating, coaching preparing, and then helping marketing the opportunity to our buyer network. So yeah, we definitely focus on, startup founders more than buyers. You obviously need both in the marketplace, but as a, as an entrepreneur myself, I wanted to solve the problems for startup founders rather than buyers. And so with buyers it works where if you have, the best opportunities, acquisition opportunities, the buyers naturally come. But that's one of our key pillars inside the business is every product feature we make, every piece of content is always in perspective of how does this benefit the entrepreneur that's selling their business on Acquire?
[00:41:09] Michel: And the thinking around that is that if you target. The the sellers you get, but then ideally a better pool of sellers and, a bigger pool of sellers. Is that the rationale behind it or?
[00:41:23] andrew_gazdecki-siutfnb2w__raw-synced-video-cfr_michel-andrew-gazdecki_2023-aug-08-0533pm_the_growth leap pod: Yeah. If you have the best listings available, if you have the best opportunities for buyers, they're gonna come to you. Because they're like a private equity firm, as an example, their whole business is buying other businesses. They're out there searching for deals already. So we basically just help bring them good opportunities. But we do it in a way that really positions the startup founder to maximize their exit. So when they go and they speak with a big private equity firm, they don't feel outmatched and they don't feel like this other buyer's way more experienced.
[00:41:59] And I don't wanna, make a mistake here and negotiate to a lower price when I could sell at this. So it is a balance, but we do heavily focus on, the start of founder as our core customer.
[00:42:13] Michel: The private equity funds are VC funds, they have an army of people working on the deal flow. I'm just curious, like when they work with you, is there something that you bring to the table that they cannot get by themselves?
[00:42:28] Andrew: Typically just deal flow.
[00:42:30] It can be that simple, just deal flow, just we give them access and it we always joke in the business. We're like Tinder for startups with acquirers. We're just having them meet that's, that can be one of the hardest parts is just finding a startup that's willing to sell, or a startup that is has all the necessary materials or it has, financials that are updated correctly. We have tools you can connect, your revenue metrics, your search traffic just to make it easier on a buyer. So we deliver, really high quality opportunities and those are really hard to source. The only other option is typically cold email.
[00:43:11] I used to get those all the time just ignore 'em. And cold email, like I just today I've gotten like 20 cold emails. So it's really hard to surface, acquisition opportunities. And so we just bring them, hundreds per month. So that's our main value proposition to buyers is high quality acquisition opportunities every single month.
[00:43:32] What can you expect if you want to sell your company on Acquire.com
[00:43:32] Michel: If wanna sell my company tomorrow on acquire.com, can you walk me through a bit the, user experience? What is it that I have to do what kind of documents I have to bring in?
[00:43:42] Andrew: Yeah, so we provide everything. We just start there. But you go to acquire.com, you sign up, you basically submit high level information. So what is your yearly revenue? What is your yearly profit? What is your tech stack, which is like a vague overview of your business. And then from there, my team will look at the listing.
[00:44:04] We have number of different reasons where we would accept the listing onto our platform or reject the startup. That's the internal term or decline. And that could be for asking prices too high. It could be they haven't, verified, certain metrics or it just seems fishy or something like that.
[00:44:24] And then we talk to the founder and we walk them through an acquisition process. And so that's where we'll provide them with certain documents such as a CIM, which is short for confidential information memorandum, which is essentially a book on your business. 'cause the goal is to help buyers understand your business for, a 360 degree angle quickly.
[00:44:44] So when we, a startup goes live the marketplace and you have 30 buyers that have signed NDAs, they're able to, understand the business very quickly. So we can again, create that process that I described earlier. We give you the necessary documents. We ensure that your listing looks, fantastic to the point where buyers would, would capture their attention.
[00:45:06] have a lot of data on that. We help evaluations. But then also once you go live on the marketplace we do weekly check-ins terms of, how are conversations going with buyers. Essentially we have process from end to end that helps buyers from the very beginning, all the way to the very end, including reviewing a letter of intent and giving our opinion on the structure of the deal, how to negotiate with that.
[00:45:34] And at times we'll even, jump in on certain calls to help founders if needed. So that's start finish. And then have a number different tools that streamline things for both buyers and sellers, such as, just sending a letter intent. We have a letter of intent builder for buyers to customize different terms.
[00:45:54] We have asset purchase agreement builder so they can finalize a sale and you could sell securely through our escrow integration. So from start to finish, we ensure that we get you in front of as many buyers as possible. You're prepared. So buyers have necessary information to make a decision on if this is a business they wanna pursue.
[00:46:16] And then as a founder, you're equipped with knowledge of what buyers are gonna ask you how to handle certain questions. And then once you get to formal offers how to pass through due diligence, and then how to safely go through escrow. So you sell your business and everything goes through securely, and both sides are protected.
[00:46:37] Michel: Is this something that is only available for US-based startups or you can cater to the entire world?
[00:46:45] Andrew: Half business is international, so 50% of the acquisitions that we do are in countries other than the United States. So we're available globally and we've done acquisitions in 75 plus countries.
[00:46:58] Michel: And that doesn't complicate the compliance and, legal
[00:47:02] andrew_gazdecki-siutfnb2w__raw-synced-video-cfr_michel-andrew-gazdecki_2023-aug-08-0533pm_the_growth leap pod: Oh, we definitely, oh, we definitely can. Yeah. If you're in the United States and you're acquiring a company, and we recently did an acquisition where the buyer was in the United States the startup was in. I think France or Europe, let's just say. And, there, there's some different legal hurdles, but, we bring in the people necessary to make sure that transaction closes securely and successfully.
[00:47:25] So it, it just depends on the situation.
[00:47:28] Michel: I'm curious about the business model, because if I remember correctly, you had a I think a membership fee for buyers. Have you added like a success fee to this or transaction fee
[00:47:38] Andrew: So we actually about two months from today on, we launched a 4% commission plan for every startup that lists on our marketplace. And so that's been in effect and we've been we had our first profitable month just last month after that launch. And the buyer subscription plan is still in place.
[00:47:59] But that was never really our business model. There's a backstory of how we made that. It was when I was just running the business, it was just me. And sellers would complain 'cause they'd get so many buyers reaching out. And I thought let's put up a little paywall to maybe filter people.
[00:48:16] 'cause if you don't have 300 bucks and you're probably not serious anyways. So I just threw that up. And that's turned into, multimillion dollars revenue side of the business as well. It'll be interesting next six months given we've just turned on commissions. And that's really that's always been the plan in terms of how we plan to scale the business.
[00:48:37] Michel: And what are your plans like for the next three to six months in terms of, maybe new features or strategically speaking, is there partnership coming up? What's your plan? What's your, what are your priorities?
[00:48:50] Andrew: Right now just growing the team. We're getting an office down in San Diego and we're continuing to grow our M&A advisory team to help provide more hands-on guidance in conjunction with our, the technology that we built. So really just, we're just getting started.
[00:49:07] We're in this new world of where, every startup that lists, we have an incentive to help them successfully get acquired. And so we're investing heavily in that side of the business. So founders have everything they need, whether that's software and tooling or. Just 24/7 support in terms of questions about any part of the acquisition process.
[00:49:31] Just growing the team to really support founders make sure they successfully get acquired.
[00:49:36] Michel: Thank you so much, Andrew. Really appreciate your time. Wish you all the best and we'll be following you at acquire.com.
[00:49:42] Andrew: Yeah, my pleasure. Thanks for having me on.
[00:49:44] Michel: Thanks again for listening, I hope you enjoyed the show. Make sure you subscribe to the podcast. And as usual you can find the show notes at stunandawecom.