Sep 13, 2022 · 21m · startup-acquisition-stories
Startup Acquisition Stories with Colin Keeley, Founder at Verne (Acquire'd 2x)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of SaaS Acquisition Stories, MicroAcquire CEO Andrew Gazdecki interviews Colin Keeley, founder of Verne, to discuss strategies for acquiring, valuing, and scaling profitable SaaS companies. Keeley shares insights from Verne's acquisitions, creative deal structuring methods, and actionable guidance for both buyers and sellers in the evolving micro-private equity landscape.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Andrew holds 52.5% of the talking time here. How this is scored →
Andrew as informed peer 4.8 Guest teaching 1.7 Guest disagreement 0.2 Andrew pushing back 0.2
speaking balance: gold is Andrew, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:40 Colin playfully calls out a gotcha question
Colin lightheartedly resists Andrew's unannounced question about favorite historical acquisitions, joking that they had agreed on no gotcha questions.
Hardest push from Andrew ▶ 15:46 Andrew clarifies and holds his ground on the questionAndrew gently rejects Colin's framing of the prompt as a gotcha question, clarifying that he simply wants to hear about any fascinating acquisition combo.
Biggest teaching moment ▶ 13:59 Colin cautions first-time buyers against jumping into complex SaaSColin offers a pragmatic reality check to aspiring software buyers, noting that managing developers without experience will quickly burn capital and suggesting simpler content sites instead.
Andrew holds their own ▶ 6:26 Andrew shares tactical knowledge on deal terms and cash trade-offsAndrew builds extensively on Colin's point about terms by sharing his own recent transaction experience, comparing an all-cash deal to an extended seller financing offer.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Andrew as informed peer | Guest teaching | Guest disagreement | Andrew pushing back | Why |
|---|---|---|---|---|---|---|
| Colin Keeley's Background and Verne's Business Model | 3 | 2 | 0 | 0 | Andrew warmly welcomes Colin and expresses admiration for his operating manuals on major PE figures. Colin provides an overview of his background in VC, startup studios, and how he transitioned into buying software companies through MicroAcquire. | |
| Acquiring BlinkSale: Deal Structuring and Buyer Differentiation | 4 | 1 | 0 | 0 | Andrew inquires about Verne's acquisition of BlinkSale and how Colin stands out among competing buyers. Colin details his deal structure involving seller financing and building rapport as a fellow founder rather than an institutional suit. | |
| Portfolio Growth and Scaling Upmarket to Larger SaaS Deals | 6 | 2 | 0 | 0 | Colin discusses scaling upmarket into single-digit ARR deals and structuring terms around seller discretionary earnings. Andrew demonstrates substantial domain expertise by sharing a firsthand anecdote about choosing an all-cash offer over higher seller-financed bids. | |
| Verne's Target Criteria and Private Equity Playbooks | 5 | 2 | 0 | 0 | Colin breaks down Verne's target criteria and cites playbooks from Constellation Software and ESW Capital. Andrew connects with the ESW reference, mentioning his own startup was acquired by them. | |
| Essential Preparation and Valuation Advice for Sellers | 5 | 1 | 0 | 0 | Colin gives tactical advice for prospective sellers regarding transparency, realistic multiples, and clean financials. Andrew enthusiastically validates these points using MicroAcquire's marketplace data. | |
| Actionable Strategies and Guidance for First-Time Buyers | 6 | 2 | 1 | 1 | Andrew and Colin exchange strategies for first-time buyers, analyze the macro environment of venture orphans, and evaluate pricing power. The interaction is friendly, with Colin jokingly calling a surprise question a 'gotcha question' before offering Facebook/Instagram. |
Statements from this episode (15)
Keeley: Building venture studio startups is extremely difficult despite capital and experience
“Once to twice a year, we'd spin up new companies and that's just a really hard process, even if you have money and like you've done it before.”
Keeley: Verne acquired BlinkSale for a six-figure price
“Yeah, it was six figures. I don't know if I could, I don't think I could say exact numbers, but in the six figures is owned by this guy, Brandon who was a serial founder and had done acquisitions before. So like we couldn't have possibly bet bought from like a…”
Keeley: Acquiring a $400K business takes the same work as $4M
“I guess we probably quickly realized, like, if you're doing something that's 200,000, or like two million, or four hundred thousand and four million, like, it's roughly the same amount of work, so leaning more towards these, like, single digit ARR companies.”
Keeley: Verne typically values acquisitions using SDE and pays 1-4x ARR
“Seller discretionary earnings is typically how we value it. And then we say we often pay, like, one to four times ARR”
Gazdecki chose all-cash over a higher seller-financed offer on Shopify app
“We bought a Shopify app as a group, me and some buddies, and we resold it on Microquire. We had a offer at a much higher price, but seller financing and all that stuff over 12 months. And I ended up taking the all cash offer just cause it's, you know, I don't …”
Keeley: Verne Recently Lost Deals to Constellation Software
“We just got beat out on a couple of deals by them recently, which is kind of cool. It's like, you know, losing basketball to Michael Jordan or something.”
Keeley: ESW Capital Focuses on Extreme Automation and Headcount Cuts
“So I think Joe Lamont's like an interesting case study of kind of a more different approach where it's a, More hardcore, more like automate everything, rip out the people and do assembly line style.”
Keeley: Verne gave up convincing founders expecting 10x to 20x ARR multiples
“I just have mostly given up on trying to convince people like you could throw them the micro require reports and be like, well, this is what things are transacting at. But if people think their business is worth 10, 20 times ARR, it's just, you know, maybe the…”
Keeley: Acquirers without developer management experience will waste money on software companies
“If you've never managed developers before, you're going to blow a lot of money. I'm trying to wrangle them in and build stuff. So like, you know, content sites or something like that, I think is a little easier, like a small content site to start.”
Keeley: Private market downturns lag public markets due to dry powder
“There's a pretty significant delay between the public markets and the private markets. It's like before things really start to turn, just because there's a lot of dry powder out there.”
Keeley: More venture orphans unable to raise will seek acquisitions
“What's exciting to us is, like, more of these companies that are, like, struggling to raise their next round, like these venture orphans. I've seen a few come up on Microquire. I think we're going to see more of those pop up.”
Gazdecki: Bootstrapping builds wealth while venture capital is a 1% lottery
“If you want to create wealth, bootstrap. If you want to change market raise venture because your odds are, I mean Mike requires venture backed. I know my odds. I got a one percent lottery ticket.”
Gazdecki: Many 2021-era startups will never grow into their valuations
“A lot of startups over the past year just raised at too high of a valuation. They're never going to be able to grow into it.”
Keeley: Pricing power with low churn measures true customer value creation
“I would say pricing power. Like, not that we do it, but I think if you could double prices and see very low churn, I think that's, like, a meaningful measure of, like, how much value you're actually creating for your customer.”
Gazdecki: BareMetrics doubled its total revenue in one day after doubling prices
“Yeah, that was fascinating because for those listening BareMetrics is a SaaS analytics tool, and they have something called, I believe OpenMetrics or something like that, so you can see how much money in real time BareMetrics is making, and when they doubled p…”