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32 Comments

Can We Buy Your Business?

Hey IHers,

Been a bit quiet here and wanted to share a few updates. A few months ago I put a post up here asking if anyone wanted to start buying small SaaS businesses with me. Fast forward a few months, and our little group has purchased 3 companies, having already grown the first one 50%! Our first acquisition was a product from another IHer ScreenshotAPI

So I want to introduce XOXO Capital, we're a group of 4 seasoned entrepreneurs that have done everything from bootstrapping, to raising $20MM, to selling businesses in both private sales and via acquisitions. We are founders ourselves and have a greater mission to provide the love and respect founders deserve, via fair, transparent, and painless exits!

Here's our criteria:

  • Single or Multi-Founder Companies
  • Ideally no dependencies on a single platform, i.e. a Twitter tool that may be subject to sudden changes in Twitters API’s
  • Node.JS, Ruby, or Python stacks
  • Profitable businesses with $1,000 MRR profit up to $10,000 MRR profit
  • Founders that need to move on due to passion, family, or other reasons but want to ensure their business is in good hands and well taken care of

Feel free to contact us at [email protected], via Twitter at @xoxo_vc, or on our website at https://xoxo.capital.

✌️

  1. 3

    It's great that you're creating another option for indie hackers!

    How are you planning on running your portfolio companies day-to-day? Between the 4 of you? Or are you going to assemble a team?

    Good luck!

    1. 4

      Excellent question. and one we don't have a great plan for yet. So far, we've just been doing them ourselves. 2 out of the 3 don't make that much money yet so we can't really afford to hire anyone. One of them does make ~$6k MRR so we do have a bit more room there.

      The plan is this:

      • We run them ourselves (writing code ourselves, doing growth ourselves) until they hit $2k MRR
      • At $2k MRR for SaaS products, we hire 1 dev, and spend our time on growth.
      • At $8k MRR we hire someone to focus on growth full time + up to 2 devs if needed.

      The tricky part about buying companies in this way is that for the most part we have to run them profitably.

      I spent a few years at a venture studio so I have a lot of ideas of what to try to get real leverage out of using people across multiple companies.

      The plan from here is to show that we can do this with our own money and now we're looking to go raise a fund.

      1. 2

        Sounds like a good plan. I'm sure some sellers would want to know that their businesses will be in good hands (though some will just want the cash).
        I think the portfolio leverage model makes a ton of sense. If I ever "make it big", that's what I'd like to do too.
        Good luck with everything!

        1. 2

          Make it big in the sense of you making it big and starting a fund like we did or make it big in terms of having a profitable product?

          1. 2

            Bc if you're interested in getting into the space our first deal was only $24,000 split between (now) 4 people. You could start even smaller with $5k deals (split 4 ways is really manageable). If you really want to get into it, just start!

            1. 2

              "Make it big" as in having a profitable product. I'm currently trying to launch a new saas app (my third attempt at building an indie business) so I just don't have the bandwidth to think about investing right now. Also, while I have enough savings to not have to worry about money for a while, I am currently cash flow negative, so I'd rather save my money for runway rather than invest it. So my hope is that my new business succeeds so I don't have to worry about money, and then take it from there.

              Also, just my personal preference but I would prefer to just invest my own money and not raise a fund, so ideally my business would be profitable enough that I could invest those profits into other businesses. Dealing with fundraising and LP relationships just isn't enjoyable to me, and I'm more interested in just helping other indie hackers and not the economics of fund fees, carried interest, etc. Obviously, with a fund you can have greater impact, but I'm at a point in my life where I'm optimizing for things I like doing, not for money or impact.

              1. 1

                Never found that fundraising was the right strategy for me... bootstrap from the start and make it big with no debt or other investors breathing down your neck.

  2. 2

    I'm curious as to what you purchased these 4 startups for... ?

    1. 1

      like the purchase price?

  3. 1

    @andrewpierno I love this🔥this is an option we’ve thought about

    1. 1

      Thanks! What are you working on?

      1. 1

        https://blogwritingservicesuk.com/

        Simple AF and has been built with selling in mind (mostly due to us not having time to allow it to consume 😂)

        1. 1

          Awesome! I've been thinking about adjacent services (eventually). Glad to see it's working for you!

  4. 1

    I love this idea, I sell you my project: https://kidpofy.com/ haha

    1. 1

      nice project, very fun! We tend to focus on B2B SaaS

  5. 1

    @andrewpierno Any way one could join your team? I am a marketing professional, and very thrilled at the idea of XOXO Capital.

    1. 1

      We're not at the point where we can hire a team (outside of devs) yet. In fact all of the partners pay to do this, meaning it's literally the most expensive job I've ever had. But if you're open to some kind of internship we could maybe chat about that if you feel like there's a lot for you learn here!

      1. 1

        @andrewpierno Sorry I actually meant to join you as a founder. I assumed I will have to invest and work for no salary.

  6. 1

    I'm curious if there is a set-in-stone multiplier that you offer for websites. I own something making 6-10k /mo (content based with ads) and I'm toying with the idea of finding a buyer.

    1. 1

      The content + ads model isn't something we do but there are plenty of marketplaces now that you should def look at like microacquire, etc.

      And no, it's not set in stone, but there is a "market rate", i.e. we're not just making up 3-4x EBITDA. If you look on the marketplaces you can see broadly what multiples things are selling for.

  7. 1

    so, no PHP stack :))

    1. 1

      I Have a comparable strategy and prefer PHP , i have a PHP Dev team , feel free to let me know what you have to offer

    2. 1

      unfortunately not right now unless it was at like $10k MRR and we could find and hire someone full time right off the bat.

      We bought one that was php and are re-writing it in node.

      1. 1

        thank you for your reply, I wonder what it is that you cannot do with PHP?

        1. 1

          Just a personal preference :)

  8. 1

    Is the stack limitation a deal breaker?

    1. 1

      Hey @primer! been a minute!

      no i don't think it's a deal breaker, we'd prefer not to have a platform risk but would be happy to take a look. We did recently buy one that had a chrome extension as a major part of the business.

  9. 1

    These are really interesting criteria. Why the specific focus on those 3 stacks? Is it because you are technical and would do tech DD?

    1. 1

      Yes, 3/4 of us are devs.

      We typically have to do a lot of dev work. And it quickly becomes a pain in the ass to have one company on rails, another in python, another using node.

      Our leverage will come from sharing people across companies (for now) and finding devs great at more than one language is practically pretty difficult to do, so it's cost prohibitive for us at the moment.

      1. 1

        Makes a ton of sense! Neat model - good luck. Not that you need it with MRR at that place already!

        1. 1

          We'll know in 5 years if this was a good idea haha

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