Ramon Van Meer, founder and CEO of Alpha Paw, explains his criteria for acquiring and scaling e-commerce websites on the My First Million podcast.
Insight
Van Meer: Growing too fast in construction or e-commerce can cause bankruptcy
“Where construction, you really, it's a similar, a little bit similar, like with e-commerce, I think you could grow yourself into bankruptcy, if that makes sense. Making, for example, you with a construction, same with e-commerce, you have to put a lot of money…”
Assertion Not checkable as stated
Alpha Paw Founders Ran Zero Ads and Sent No Emails Before Acquisition
“This case the two founders were not doing any Facebook ads. There was no paid acquisition happening at all. And even though they had a, These inside customer database, they were not emailing even existing customers, let alone trying to capture, you know, a car…”
Assertion Not checkable as stated
Van Meer: Word Game Website Generates $3M Profit on $3.5M Revenue
“So for example, there's one for sale now for nine million dollars. They started it in 2017. It does 3.5 million in revenue. And because there's no really team needed, it's like, it's almost all profit. It's like three, around three million dollars of profit.”
Assertion Supported
Van Meer: SBA loans fund up to 90% of internet business acquisitions
“You can use SBA loans to buy internet businesses. SBA loan is basically a business loan, small business loan that I don't know when they started a few years ago, where they now also fund internet businesses. And you can borrow up to 90%. So technically you can…”
Disclosure
Van Meer Finances 20% to 40% of Acquisitions Through Seller Notes
“Every time I buy business, that's never a hundred percent cash on closing. I always have 60 to 80% cash on closing, and the remaining, it's either seller's note or not.”
Insight
Van Meer: First-time online business buyers should hire due diligence firms
“If you are new to this, if you are, you know, it's your first business, you can, Hire a due diligence company Centurica, Centurica.com is one. I think those are the biggest well known. You pay, you know, it depends on the listing price, but it's as cheap as a …”