StarZero All shows Try the podcast clipper →

Apr 17, 2023 · 18m · starter-story

Zero to $1.1B from Flipping Websites

Thomas Smale · 15m spoken
0:00 / 0:00
▶ Watch on YouTube →

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

FE International founder Thomas shares his journey from flipping $100 websites in college to executing over $1.1 billion in online business sales, outlining actionable strategies for deal sourcing, valuation, negotiation, and scaling through micro-acquisitions.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Pat holds 12.2% of the talking time here. How this is scored →

Pat as informed peer 2.0 Guest teaching 3.1 Guest disagreement 0.9 Pat pushing back 0.0
05100:0010:000:49–2:50 · Pat as informed peer 1/10 Early College Flipping and the Accidental Transition to M&A Pat sets up the interview by asking Thomas how he got into the website flipping space. Thomas provides a friendly narrative about his college days, credit card arbitrage, and stumbling into M&A through course students.2:50–6:36 · Pat as informed peer 2/10 The College Grind, Credit Cards, and Self-Taught Business Models Pat prompts Thomas on early operational scaling and reinvestment. Thomas explains hiring non-technical support, bringing on an investment banking partner, and trimming unprofitable tasks using the Pareto principle.6:36–9:41 · Pat as informed peer 2/10 Step-by-Step Guide to Finding and Sourcing First Acquisitions Pat asks how beginners can source cheap acquisitions and what makes a company fundamentally strong. Thomas shares practical advice on cold outreach messaging and the three pillars of solid businesses (evergreen demand, recurring customers, growth).9:46–11:56 · Pat as informed peer 2/10 Scaling to Eight-Figure Deals and M&A Fee Structures Pat asks about landmark deals and fee structures. Thomas details how their first eight-figure transaction catalyzed growth and explains how broker commissions scale down from 15% on smaller deals to lower rates on large enterprises.11:56–14:26 · Pat as informed peer 3/10 Demystifying Online Business Valuations and Multiples Pat inquires about whether valuations are revenue or profit based. Thomas immediately dispels valuation myths, explaining that small online businesses are valued on profit multiples (4x-10x) rather than revenue.14:27–16:34 · Pat as informed peer 2/10 Acquisition Negotiation Strategies and Managing Trade-Offs Pat asks how to optimize terms when negotiating. Thomas lays out practical negotiation dynamics, emphasizing trade-offs between valuation and transition periods, and warning against pushing back on every single contract clause.16:34–18:42 · Pat as informed peer 2/10 Launching with Minimal Capital and Scaling Through Track Records Pat asks for advice for people starting with zero capital. Thomas rejects the pure zero-capital narrative, arguing that finding even $100 unlocks real opportunities and that initial micro-deals are about mastering the process rather than immediate income.0:49–2:50 · Guest teaching 1/10 Early College Flipping and the Accidental Transition to M&A Pat sets up the interview by asking Thomas how he got into the website flipping space. Thomas provides a friendly narrative about his college days, credit card arbitrage, and stumbling into M&A through course students.2:50–6:36 · Guest teaching 2/10 The College Grind, Credit Cards, and Self-Taught Business Models Pat prompts Thomas on early operational scaling and reinvestment. Thomas explains hiring non-technical support, bringing on an investment banking partner, and trimming unprofitable tasks using the Pareto principle.6:36–9:41 · Guest teaching 3/10 Step-by-Step Guide to Finding and Sourcing First Acquisitions Pat asks how beginners can source cheap acquisitions and what makes a company fundamentally strong. Thomas shares practical advice on cold outreach messaging and the three pillars of solid businesses (evergreen demand, recurring customers, growth).9:46–11:56 · Guest teaching 3/10 Scaling to Eight-Figure Deals and M&A Fee Structures Pat asks about landmark deals and fee structures. Thomas details how their first eight-figure transaction catalyzed growth and explains how broker commissions scale down from 15% on smaller deals to lower rates on large enterprises.11:56–14:26 · Guest teaching 5/10 Demystifying Online Business Valuations and Multiples Pat inquires about whether valuations are revenue or profit based. Thomas immediately dispels valuation myths, explaining that small online businesses are valued on profit multiples (4x-10x) rather than revenue.14:27–16:34 · Guest teaching 4/10 Acquisition Negotiation Strategies and Managing Trade-Offs Pat asks how to optimize terms when negotiating. Thomas lays out practical negotiation dynamics, emphasizing trade-offs between valuation and transition periods, and warning against pushing back on every single contract clause.16:34–18:42 · Guest teaching 4/10 Launching with Minimal Capital and Scaling Through Track Records Pat asks for advice for people starting with zero capital. Thomas rejects the pure zero-capital narrative, arguing that finding even $100 unlocks real opportunities and that initial micro-deals are about mastering the process rather than immediate income.0:49–2:50 · Guest disagreement 0/10 Early College Flipping and the Accidental Transition to M&A Pat sets up the interview by asking Thomas how he got into the website flipping space. Thomas provides a friendly narrative about his college days, credit card arbitrage, and stumbling into M&A through course students.2:50–6:36 · Guest disagreement 0/10 The College Grind, Credit Cards, and Self-Taught Business Models Pat prompts Thomas on early operational scaling and reinvestment. Thomas explains hiring non-technical support, bringing on an investment banking partner, and trimming unprofitable tasks using the Pareto principle.6:36–9:41 · Guest disagreement 1/10 Step-by-Step Guide to Finding and Sourcing First Acquisitions Pat asks how beginners can source cheap acquisitions and what makes a company fundamentally strong. Thomas shares practical advice on cold outreach messaging and the three pillars of solid businesses (evergreen demand, recurring customers, growth).9:46–11:56 · Guest disagreement 0/10 Scaling to Eight-Figure Deals and M&A Fee Structures Pat asks about landmark deals and fee structures. Thomas details how their first eight-figure transaction catalyzed growth and explains how broker commissions scale down from 15% on smaller deals to lower rates on large enterprises.11:56–14:26 · Guest disagreement 2/10 Demystifying Online Business Valuations and Multiples Pat inquires about whether valuations are revenue or profit based. Thomas immediately dispels valuation myths, explaining that small online businesses are valued on profit multiples (4x-10x) rather than revenue.14:27–16:34 · Guest disagreement 1/10 Acquisition Negotiation Strategies and Managing Trade-Offs Pat asks how to optimize terms when negotiating. Thomas lays out practical negotiation dynamics, emphasizing trade-offs between valuation and transition periods, and warning against pushing back on every single contract clause.16:34–18:42 · Guest disagreement 2/10 Launching with Minimal Capital and Scaling Through Track Records Pat asks for advice for people starting with zero capital. Thomas rejects the pure zero-capital narrative, arguing that finding even $100 unlocks real opportunities and that initial micro-deals are about mastering the process rather than immediate income.0:49–2:50 · Pat pushing back 0/10 Early College Flipping and the Accidental Transition to M&A Pat sets up the interview by asking Thomas how he got into the website flipping space. Thomas provides a friendly narrative about his college days, credit card arbitrage, and stumbling into M&A through course students.2:50–6:36 · Pat pushing back 0/10 The College Grind, Credit Cards, and Self-Taught Business Models Pat prompts Thomas on early operational scaling and reinvestment. Thomas explains hiring non-technical support, bringing on an investment banking partner, and trimming unprofitable tasks using the Pareto principle.6:36–9:41 · Pat pushing back 0/10 Step-by-Step Guide to Finding and Sourcing First Acquisitions Pat asks how beginners can source cheap acquisitions and what makes a company fundamentally strong. Thomas shares practical advice on cold outreach messaging and the three pillars of solid businesses (evergreen demand, recurring customers, growth).9:46–11:56 · Pat pushing back 0/10 Scaling to Eight-Figure Deals and M&A Fee Structures Pat asks about landmark deals and fee structures. Thomas details how their first eight-figure transaction catalyzed growth and explains how broker commissions scale down from 15% on smaller deals to lower rates on large enterprises.11:56–14:26 · Pat pushing back 0/10 Demystifying Online Business Valuations and Multiples Pat inquires about whether valuations are revenue or profit based. Thomas immediately dispels valuation myths, explaining that small online businesses are valued on profit multiples (4x-10x) rather than revenue.14:27–16:34 · Pat pushing back 0/10 Acquisition Negotiation Strategies and Managing Trade-Offs Pat asks how to optimize terms when negotiating. Thomas lays out practical negotiation dynamics, emphasizing trade-offs between valuation and transition periods, and warning against pushing back on every single contract clause.16:34–18:42 · Pat pushing back 0/10 Launching with Minimal Capital and Scaling Through Track Records Pat asks for advice for people starting with zero capital. Thomas rejects the pure zero-capital narrative, arguing that finding even $100 unlocks real opportunities and that initial micro-deals are about mastering the process rather than immediate income.

speaking balance: gold is Pat, purple is the guest (3 minute bins)

0:00 · Pat 21.9% · guest 78.1%0:00 · Pat 21.9% · guest 78.1%3:00 · Pat 7.9% · guest 92.1%3:00 · Pat 7.9% · guest 92.1%6:00 · Pat 11.3% · guest 88.7%6:00 · Pat 11.3% · guest 88.7%9:00 · Pat 10.8% · guest 89.2%9:00 · Pat 10.8% · guest 89.2%12:00 · Pat 17.7% · guest 82.3%12:00 · Pat 17.7% · guest 82.3%15:00 · Pat 6.5% · guest 93.5%15:00 · Pat 6.5% · guest 93.5%18:00 · Pat 0% · guest 100%18:00 · Pat 0% · guest 100%
Sharpest disagreement ▶ 16:46 Reframing the zero-dollar acquisition myth

Thomas pushes back on Pat's premise of buying businesses with zero dollars, insisting that beginners must secure at least some minimal capital because nobody gives businesses away for free.

 Hardest push from Pat ▶ 11:56 Probing valuation methodology

Pat specifically presses Thomas to clarify whether digital assets are priced against top-line revenue or bottom-line profit multiples.

 Biggest teaching moment ▶ 12:04 Correcting widespread valuation misconceptions

Thomas directly schools the audience and host on common valuation errors, explaining why revenue multiples are rare for small businesses and establishing realistic 4x to 10x annual profit expectations.

 Pat holds their own ▶ 13:02 Synthesizing build vs buy dynamics

Pat demonstrates his own entrepreneurial insight by articulating the downsides and friction of building from scratch compared to acquiring existing cash-flowing momentum.
the scores for every segment, with the reasoning behind each
ChapterTopicPat as informed peerGuest teachingGuest disagreementPat pushing backWhy
Early College Flipping and the Accidental Transition to M&A 1100 Pat sets up the interview by asking Thomas how he got into the website flipping space. Thomas provides a friendly narrative about his college days, credit card arbitrage, and stumbling into M&A through course students.
The College Grind, Credit Cards, and Self-Taught Business Models 2200 Pat prompts Thomas on early operational scaling and reinvestment. Thomas explains hiring non-technical support, bringing on an investment banking partner, and trimming unprofitable tasks using the Pareto principle.
Step-by-Step Guide to Finding and Sourcing First Acquisitions 2310 Pat asks how beginners can source cheap acquisitions and what makes a company fundamentally strong. Thomas shares practical advice on cold outreach messaging and the three pillars of solid businesses (evergreen demand, recurring customers, growth).
Scaling to Eight-Figure Deals and M&A Fee Structures 2300 Pat asks about landmark deals and fee structures. Thomas details how their first eight-figure transaction catalyzed growth and explains how broker commissions scale down from 15% on smaller deals to lower rates on large enterprises.
Demystifying Online Business Valuations and Multiples 3520 Pat inquires about whether valuations are revenue or profit based. Thomas immediately dispels valuation myths, explaining that small online businesses are valued on profit multiples (4x-10x) rather than revenue.
Acquisition Negotiation Strategies and Managing Trade-Offs 2410 Pat asks how to optimize terms when negotiating. Thomas lays out practical negotiation dynamics, emphasizing trade-offs between valuation and transition periods, and warning against pushing back on every single contract clause.
Launching with Minimal Capital and Scaling Through Track Records 2420 Pat asks for advice for people starting with zero capital. Thomas rejects the pure zero-capital narrative, arguing that finding even $100 unlocks real opportunities and that initial micro-deals are about mastering the process rather than immediate income.

Statements from this episode (11)

Disclosure
Smale: First website flip turned $100 into $500 on a credit card
“I think the first deal I ever did was I bought a website for a hundred dollars, got that to making a little bit of money every month, and then I sold it at the end of the month for more than I paid. So I think my first deal was something like a hundred dollars…”
Thomas Smale Apr 17, 2023 ▶ 1:23
Assertion Contradicted
Smale: In 2010, no M&A firms or brokers serviced online businesses
“There was no M&A firms that did this. There were no business brokers. If you had a really big business, you couldn't call a big investment bank because they wouldn't return your phone call. So very much offered a service that no one else did, and really built …”
Thomas Smale Apr 17, 2023 ▶ 2:38
Insight
Smale: Direct Email Outreach Is the Best Way to Source Business Acquisitions
“The best way to find potential deals is email people, reach out.”
Thomas Smale Apr 17, 2023 ▶ 7:07
Insight
Smale: Buying a $10,000 Business Does Not Require Professional M&A Advice
“If you're buying something for 10,000 dollars, you don't need to hire a firm like us. You don't need professional advice.”
Thomas Smale Apr 17, 2023 ▶ 7:51
Insight
Smale: Selling a $20M business is fundamentally similar to a $1M deal
“And really the difference between selling a, Million dollar business and twenty million dollar business isn't really that different. It's slightly more technical. It takes a bit more time. It involves generally more attorneys and accountants and different thir…”
Thomas Smale Apr 17, 2023 ▶ 11:04
Insight
Smale: M&A broker fees start at 15% on small deals and scale down
“Fees generally on smaller transactions start at 15% and then tear down. So the bigger the business gets, the lower the fee you get to, and that really continues to tear up until you have a multi-billion dollar business. Fees will be even lower.”
Thomas Smale Apr 17, 2023 ▶ 11:29
Insight
Smale: Small businesses sell on profit multiples, not revenue
“For most small businesses, so probably everyone listening, you generally don't get a revenue multiple. There's a lot of misinformation out there around valuations, but revenue multiples are uncommon. You generally get a multiple of profit.”
Thomas Smale Apr 17, 2023 ▶ 12:04
Insight
Smale: Average small business sells for 4x to 10x annual profit
“Like the average small business is probably in the four to 10 times annual profit range.”
Thomas Smale Apr 17, 2023 ▶ 12:36
Insight
Smale: Buying Existing Businesses Eliminates Product and Willingness-to-Pay Risks
“But the variable you're never worrying about is, will someone pay for it? Because it already has an audience, and does the product work? Because again, it's already got people paying for it.”
Thomas Smale Apr 17, 2023 ▶ 14:06
Insight
Smale: Buyers Should Acquire Businesses Where Their Skills Complement the Founder
“Buy something where your skill set can add to it. You don't necessarily need to have the same skills as the founder. Ideally, you need to have slightly different skills.”
Thomas Smale Apr 17, 2023 ▶ 14:19
Insight
Smale: Investors back small repeatable track records over theoretical plans
“Investors are much more likely to work with people who can show a track record. Even if the track record is small, if you can show, Hey, look, look how many times I've turned. 10,000 dollars into 20,000.”
Thomas Smale Apr 17, 2023 ▶ 18:24
Made with StarZero

Turn any episode into a week of clips.

This entire site, about 80 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more