Newly rich indie hackers share how to get acquired

Interested in getting acquired one day? There are things you can do proactively to make your product more attractive to buyers and increase the selling price.

I caught up with acquirers, as well as founders who sold their products for life-changing amounts — let's learn from their experience. 👇

How to set your business up to get acquired

Keep your eye on the business (not the exit)

👤 Tim Schumacher of Saas.Group: I strongly believe that the best businesses aren't the ones where the founder is gunning toward an exit. The best businesses are always the ones with no end goals... so my mantra is, "Just run a good business that gives you plenty of options”.

Simple logic: If you have a healthy business, growing, ideally low churn, and large enough, it’ll find a buyer without problems.

👤 Andrew Pierno of XO Capital:

I don’t think building to get acquired is that helpful to think about. It’s mostly about building the best business you can.

👤 Daniel Peris of INDEXED.pro:

Build a fantastic product without the objective of selling. Think about growing (non-stop).

Educate yourself

👤 Kevin Mcardle of Big Band:

A good business to sell is also a good business to own...so doing a little prep and education will only benefit you as a founder.

Remember that perfect is the enemy of good

👤 Kevin Mcardle of Big Band:

No business is perfect and we understand that. We just want to know that the 'imperfections' are either small or fixable, or both.

Focus on the right things

👤 Kevin Mcardle of Big Band:

Focus on what's important at each stage of the process:

• Early: Product market fit and getting to a point of survival

• Middle: Building the team and processes to scale

• Later: Extract yourself from the day-to-day of the business so it's easier for someone else to take over and focus your energy on learning the game of exits/acquisitions and positioning yourself in the best way for the right buyer for you and your business.

Maximize growth

👤 Kevin Mcardle of Big Band:

We like the "Rule of 40" which is growth rate % + margin %. If those numbers add up to 40, it's a pretty healthy business whether at one end of the spectrum (flat growth but 40% margins) or the other (40% growth and break even), or somewhere in the middle.

👤 Spencer Patterson:

If you’re looking to maximize value, you need to be putting your all into the scalability and growth. Reduce churn as much as you possibly can.

Mind your monetization model

👤 Marc Andre of Flip My Site:

For content sites, these are the monetization methods most buyers prefer. Stick to products, affiliate programs, and ads for revenue. Buyers generally aren’t as interested in revenue from sponsored content.

And diversify your revenue. Buyers don’t want to see all of your revenue coming from one product or one affiliate program.

Nail your distribution

👤 Daniel Peris of INDEXED.pro:

Distribution is important. My portfolio of apps was sold because the apps had a lot of search visibility in Google Play (ASO).

Diversify your channels

👤 Marc Andre of Flip My Site:

Diversify your traffic. This is more important than ever.

Avoid lifetime deals

👤 Andrew Pierno of XO Capital: Generally, we don’t like lifetime deals. Those customers are liabilities for us.

Lots of indie hackers think they can just build a crap product, do an App Sumo launch, and then sell the project for like $100k. That might be possible but isn’t advisable.

Avoid personal branding

👤 Marc Andre of Flip My Site:

Avoid heavy personal branding. Potential buyers will worry that people follow you personally and not the site itself.

Build in public

👤 Alexander Isora of Unicorn Platform:

Being fully transparent and open in public helped me to attract the attention of lots of potential buyers.

I have a habit of sharing my thoughts, vision, and approaches. It makes people from the outside fully familiar with my business. When you are familiar with a project you will be more willing to start a negotiation.

That's why I was getting an offer each week or so. Most of them were nonsense, but some were good.

Start sharing public metrics as soon as possible!

Document everything

👤 Daniel Peris of INDEXED.pro:

Have everything well documented and ordered.

👤 Marc Andre of Flip My Site:

Keep good records.

Conduct exit planning (early)

👤 Kevin Mcardle of Big Band: I believe that EVERY founder with a business over two years old should do Exit Planning ANNUALLY. It is not something that waits until someone is "ready" to sell their business.

Here's a workbook you can use to get started.

Keep it clean

👤 Marc Andre of Flip My Site:

Keep things clean. Make sure the site will be easy for someone else to run. Don’t have tons of custom scripts and other things that will be difficult for a buyer to grasp.

Don't hustle

👤 Marc Andre of Flip My Site:

Limit your hours. Most buyers don’t want to buy a job. They want to hire others to run the site. The fewer hours you work on the site, the more attractive it will be.

This doesn’t impact your ability to sell until you get close to a sale, though. If I’m looking to sell a site in the next year, I’ll aim to reduce the time I spend on it and get some freelancers in place.

👤 Kevin Mcardle of Big Band:

The founder should remove themselves as much as possible from the day-to-day operations of the business.

If the founder is truly just managing a team that handles all of the day-to-day activity, it is easier to replace that person.

Build a team

👤 Marc Andre of Flip My Site:

Build a team. For content sites, have freelance writers, editors, VAs, or whatever is needed to run the site. Buyers like to see that there’s a team in place to continue running the site.

Avoid common pitfalls

👤 Tim Schumacher of Saas.Group:

The most common problems are wrong pricing, bad user onboarding, and complicated/clumsy UX which hasn’t been properly tested.

Be patient

👤 Marc Andre of Flip My Site:

I worked on most of the sites for 4-6 years before selling. The exceptions would be the blogs that I purchased and flipped. They took under 2 years.

Sell on an uptrend

👤 Spencer Patterson:

The first thing you need to do in order to ensure maximum valuation is to make sure that you’re selling on an uptrend. Selling when there is stagnation or downtrend leads to questions and doubt.

Choose a reasonable price

👤 Tim Schumacher of Saas.Group:

The main factor is the company profits. Or potential profits, if there are unusual expenses which can easily be cut.

On these we - like most acquirers in this space - we usually apply a multiple of 2-7x on profits/SDE (Seller's Discretionary Earnings). I know this is a wide range, but: The low end for high-risk and/or low-growth projects, the upper end for low-risk/high-growth projects. Most projects are somewhere in the middle (4-5x).

👤 Marc Andre of Flip My Site:

Profit is by far the biggest factor, and the monetization method.

Other things like the age and history of the site, traffic, trends, an email list, and a social media following can have an impact, but nothing compares to profit.

Be honest

👤 Kevin Mcardle of Big Band:

Be honest. Do what you say you are going to do. Live up to commitments. Don't try to sugarcoat your numbers or metrics just to disappoint when you share the real P&L or reports. If you know there is something scary about your business (for example a lingering lawsuit or a big customer who has threatened to leave), just disclose it.

No business is perfect, and we're very likely to find those things out during the diligence process. If you try to hide something and we find it, trust is lost. If you disclose something early, trust is earned. It isn't complicated.

Vet your buyers

👤 Spencer Patterson:

When you finally pull the trigger of accepting a letter of intent, you’re locked into that buyer for anywhere between 30 and 60 days. Anything longer, and you should reconsider.

That means you need to be sure that the buyer that you are accepting the letter of intent from is capable and has full intentions of closing. Put the time into vetting them (if you don't have a broker).

Where to sell your business

👤 Kevin Mcardle of Big Band:

You should reach out to companies like Big Band to get on their radars early. Building relationships isn't required, but it sure helps. I love tracking founders/businesses over time to get to know them before they are ready to sell.

It's also a great idea to build relationships with strategic acquirers in your space — this could be a competitor or partner.

Acquire.com is great, and I was one of Andrew Gazdecki's first customers and investors when he launched. There is a challenge in standing out and being a signal in the noise because that platform is so popular.

I wouldn't rely on any one of these strategies. Do them all. The more people who are interested in your business, the more likely you are to get the best outcome for you (not just price, but all terms considered).

👤 Spencer Patterson:

Before you undertake the daunting task of trying to sell the business yourself, consider how much time and effort you actually need to put into the business on a daily basis — it might be worth going with a brokerage service like I eventually did.

A broker will charge anywhere between 5% and 15% of the total sale price. So you can save tens of thousands of dollars by doing it yourself, but realistically, you’ll end up spending anywhere from 10 to 20 hours per week doing it if you’re not experienced.

I eventually chose to go with Flippa as my brokerage service.

👤 Daniel Peris of INDEXED.pro:

Nowadays, if you want to sell your startup, you sell it. There are platforms for this and you can even use Twitter to sell projects — I have sold a few that way.

👤 Marc Andre of Flip My Site:

I’ve sold websites privately, on marketplaces, and through brokers. Some sellers avoid brokers because of the fees, but I’ve found good brokers to be well worth it.

Two of the last three sales I’ve had have been through Quiet Light. Brad Wayland was my broker both times and I highly recommend him. In both cases, it was quick and I got way more for it than I would have been able to get on my own.

In my opinion, a broker is usually the best choice unless you have a specific buyer in mind and you know you’re getting a good price.

The downside is that most brokers have minimum requirements, so they’re not an option for smaller sales.

Something like Empire Flippers could be an option for sites making $2,000 per month or more. Otherwise, marketplaces like Investors Club and Motion Invest are good options.

And remember to enjoy the journey

👤 Alexander Isora of Unicorn Platform:

Success sucks. All the fun happens along the way.