I just acquired a business - here's what I learned
I just acquired Zite on the MicroAcquire marketplace. Have you considered acquiring a business to jumpstart your path as an entrepreneur? Here's a few tips from my experience (and feel free to AMA in the comments):
Know what you want
- Find out what kind of business you want to own and run
- Can you run it solo or do you need a team of experts
- Read about what it means to run a SaaS with recurring revenue or E-Commerce or a Content Business. Each will have their own challenges for you and your personality
- Of course you need to know your budget (or financing)
Be patient
- Monitor listings frequently
- Don't just go and buy anything, good listings come to those who wait
- I talked to the sellers of at least 10 different businesses before Zite came along which I would end up actually buying
- I was subscribed to MicroAcquire for 2 years before closing the acquisition
Prepare your due diligence
- Do not think of it as tech due diligence only. The other aspects of a business taken together are far more important than the stack and technical debt
- Understand the drivers and trends in the business (user churn, revenue growth, channel mix, ...)
- Ask for proof for seller's claimed numbers, past successes
- Asses risks for the business from market conditions, even the acquisition itself may pose a risk
- ... and so much more, make sure to be prepared because you need to be quick
Be quick
- When you find someone offering something you want, do not hesitate
- Make a first offer quickly, negotiate soon after, sign LOI, do your DD
- A single day spent pondering instead of acting may lose you a deal (I have been there!)
- But: do not let sellers push you toward a decision. You need to feel it is right for you.
Communicate openly
- Raise any concerns or doubts openly
- If you don't get straight answers, that'll tell you something
- Ask about past struggles in the business
- Sellers will be more honest than you might think
Seek counsel
- Depending on the size of the transaction it makes sense to bring in legal counsel
- You will find templates for legal docs, those can be sufficient for smaller deals
Want to know more about the experience? AMA in the comments.
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Gregor, congrats on the acquisition. This is awesome.
What subscription plan did you use/or found more useful in Microacquire?
Did MicroAcquire simply happen to be where you found your deal and there were other sites that were also part of your search that you recommend? or MicroAcquire was your only deal source?
Hey Alejandro, thanks!
Thank you so much, Gregor, for mentioning Microns.
I'm glad you liked the newsletter.
got it -- this makes sense, thank you for the info! we look forward to read about your progress with Zite :)
Congrats on the acquisition gregor, I've known zite for sometime now. Pretty interesting that you picked a digital product/template directory - you wanna write something about that? (How you plan to grow it, financials behind it, would custom work be offered)
Thanks @fardeen - I am also pretty excited :)
I will write dedicated post regarding plans for Zite. But here are some bits and pieces around the questions you asked:
Template directory - yep. Important for me was to acquire something that's profitable and has a proven model. I think Carrd will only grow from here and the Carrd ecosystem just feels like a great place to be in.
Financials: I am not ready to share actual revenue numbers. But maybe this much: Zite revenue is far away from enough to make a living. And it might be for a long time. So at some point it will be a tradeoff between working on it to grow it - and working on other projects.
I will be working on Zite full time for a bit from now
I do have some ideas to grow it: offering more templates, making it easier to choose templates, offering more templates that are like UI Components, create more helpful content around getting started and being successful with your Carrd site
Custom work: Will continue to offer custom designs, yes. I am currently outsourcing that work.