The Exchanges

Q Nice. I mean, that sounds, I I've heard, uh, you know, you know, much bumpier than that. So that, that sounded smooth in terms of like, yeah, transferring, like, did you transfer the Stripe account or did you have other products in one Stripe account?

A Um, so at least, so I, you know, we went back even with like Stripe support a lot with this is like my, um, corporation entity was like connected to my Stripe account. I think because I use, what is it Atlas or whatever their, their product is called for that. Yeah. And apparently there's not a way that they can separate that from the whole like Stripe account. And so basically what we had to do was he had to create, the buyer had to create a new Stripe account. And then we had to, Stripe does have a, uh, you know, an easy interface to basically move products over, um, or no, to move customers over. But then we had to like write the code and the script to move all the subscriptions and the payments and that over. And then start those again on the new Stripe account. So that was kind of like the hard kind of tricky part just to make sure we did all right and didn't like mess something up. Um, but yeah, that's kind of what that ended up looking like just because like my entity was kind of connected to the Stripe account and there wasn't really a way to get around that apparently.

AI assessment note: “basically what we had to do was he had to create, the buyer had to create a new Stripe account”

Q able to get their document in and wasn't able to get the approval. Uh, so that feeling, uh, also sucks too. Um, So glad, glad it all landed in your bank account, um, where it belongs. Um, so now I, I, I got, um, every person I talked to who sold a business, um, is, is working on, um, something else. What are you, what are you up to now?

A Yeah. So I just, um, I just jumped on as the director of marketing for a SaaS startup, uh, called Zenlytic. And it's pretty wild because I'm one of the first 10 employees. And so you get that, like, You get that really core feeling of like, all right, we're going to be at the ground floor of this. And I basically have the opportunity to, to shape how we're going with marketing and the direction we're going to take. Um, which is kind of the thing that fires me the most up is like, at the end of the day, cam skins was just all my marketing ideas. And I just had a great manufacturer that somehow supported me and bet on me. Uh, and now it seems like this, this startup that I just joined, Is essentially doing the same thing where they're just like, Hey man, what are your marketing ideas? How are you, how are we going to go forward? Um, and that's the stuff that just fires me up the most.

AI assessment note: “I just jumped on as the director of marketing for a SaaS startup, uh, called Zenlytic.”

Q I guess, you know, final question would be, you know, lots of people are trying to sell their businesses right now. Lots of people, uh, don't know whether getting themselves into, um, What are maybe like three tips you'd give to another entrepreneur that, um, was specifically looking to, you know, list on acquire.com. What would you, if you had three, five, one piece of advice, what would it be?

A Definitely. Um, I would say top three is if you can know your numbers, like as best as you physically can, and just get all those done out of the way. And I'm talking like all your PNLs for the last five years and just make sure you know all that stuff and like even any someone like like some anomaly months too so you're just like you can explain those you'd be like oh what was happening with this weird month like oh actually we did xyz um and then i think painting the picture too for like uh i was basically up front about it where i was like i've taken camskins as far as i physically could here's the other opportunities in which i think camskins can expand and then i listed all of those out and i gave them Basically the full, the full like playbook of how I would expand it if I had more opportunity to do it. Um, and then I think just the third thing is like, uh, talk to some people that you really trust and have some like really good phone calls. Um, there were some moments during this process where I was like doubting myself and I was just doubting basically everything. I think it's pretty normal to do during that process, but I have some really good friends in the industry. Like That are in various stages of all of this. Some have sold their businesses and some are operating them. And I would just call them and they would basically just be a, an opportunity for me to just li…

AI assessment note: “I would say top three is if you can know your numbers”

Q Yeah, that was cool. Let's talk about that one then. Okay, so, um, what made you build that and what it what problem did it solve? Let's start there.

A Yeah, sure. So I launched this project, actually, as a fun experiment, just to figure out how good chat GPT is at Code writing. And the results from the first few prompts were great. So I spent the next 10 hours improving the output. And at the end of the day, I was able to actually record a live demo video with a Chrome extension created in collaboration with ChatGPT as my CTO. And I wrote the tweet and my tweet with the demo went Viral. Um, I was working on the extension for a few more weeks and learned a lot about ChatGPT and what can be done with it. So, uh, that's the, the, the general, uh, idea of, of, uh, of doing this experiment. And the extension was able to actually, um, generate, uh, content, uh, right in the Text boxes. You can, you can write like your comments on or, or, or any, any content online. So you can access this, uh, this powerful technology just with a simple comment. Just you, you type slash AI and then your prompt and you hit enter and you receive the response from chat GPT right there.

AI assessment note: “I launched this project, actually, as a fun experiment, just to figure out”

Q that you both should be working on and, you know, looking at. Um, and then on the other hand, you have experienced buyers who typically, you know, can close a transaction in, you know, two weeks to a month. You know, they just seem to, they've been through the process before and it sounds like your buyer had, um, do you think that made due diligence a little bit easier?

A Yeah, exactly. So it wasn't the first acquisition, I believe in the e-commerce space was, uh, I think maybe the fourth or the fifth, uh, acquisition in a relatively short amount of time. So I think that, that was, uh, speeding things up, right? So, um, we, we closed from LOI to, uh, asset purchase agreement in around two weeks, which is relatively fast, I would say. Um, And, uh, yeah, the buyer already had like the templates that they use for the previous transaction. So we did made some adjustments, uh, in the, you know, the escrow transaction in, uh, in the rights of the assets and so on. But, uh, I think if you, yeah, if you already done it, right. It's, it's always easier to, to do it a second time, whether you're a buyer or you're a founder.

AI assessment note: “Yeah, exactly. So it wasn't the first acquisition... speeding things up”

Q It looks beautiful. It looks like maybe like Trello. For bookmarks, is that kind of?

A Yeah, yeah, so you, yeah, exactly, exactly. So we had a, you know, a lot of people are copying each other these days and kind of shipping the same exact thing, but what I did is our competitor was Toby at the time, so it's kind of like one tab also where you save bookmarks, but it all goes into one very long and extended column. So it makes it really hard to find something like two years down the road. So I, I was using it myself, but it just became very crowded, so I tried to, I I was using Trello at the time. So I was like, okay, can I do something around organizing this in a Trello aspect? And you worked out that way.

AI assessment note: “can I do something around organizing this in a Trello aspect?”

Q So, um, you, you have buyers reaching out. Um, how do you vet the buyers? What was your process to ensure that, you know, you weren't wasting your time on people that weren't necessarily the best fit?

A Yeah. So I guess the first thing is sort of like what the buyers report about themselves. So like, oftentimes they have like a revenue range and there are some, some requests that are outside. Like your listed, uh, price and the revenue range. For example, let's say we were selling for like, 500 K. You might still see some buyers who are saying like, they can only do acquisitions between zero and 100 K. So in that case, you can pretty quickly filter them out. Um, second step is just like a quick Google search. Like, um, who are these people? Uh, what's their background? Have they done any similar acquisitions in the past? Things like that. You can kind of get a sense for, uh, yeah, how legitimate or how serious a buyer is from those kind of things.

AI assessment note: “first thing is sort of like what the buyers report... second step is quick Google search”

Q Um, That's, that's a good amount of interest. Yeah. That's, that's, that's a lot of NDAs. Okay. So, okay. Now you're, you're live in the marketplace. You, you've been in the newsletter, Buyers are interested. They're asking you questions. Um, how did you, uh, find the right buyer? How did you, um, narrow it down to that one individual that you ended up selling, uh, this business to?

A So I started by just talking a bit with everyone and, uh, yeah, I just made calls. I think the best way to handle that is via calls because you can, uh, they can ask questions and everything. So I had a day with only calls. From potential buyers. And yeah, I just ask, like they ask me lots of questions and I also ask them like, what are their vision for the app? Because I mean, obviously the financial parties, uh, is the most important for me, but I wanted also someone who I don't want it to sell to someone and then he don't do anything with it. Uh, it's, it would be like, I don't know, maybe ego thing, but yeah. And so, yeah, I checked with a few buyers. Um, uh, I got like offers above the price. And yeah, at the end of the day, uh, I got with my last buyer and he had like a really good vision for the app. Uh, he offered me like, uh, like the final price. Uh, and he's like, I, I don't want to lose like, you know, too much time negotiating and stuff like that. So just, uh, make a decision quickly if you're interested. So he made me the offer, the final offer. So it was, um, 65,000. And yeah, I was like, damn, that seems unreal. Like, What happened in here? Because I listed it for, uh, at first, uh, 49, um, thousand. Then I increased to 50. And yeah, then he offered me like 65. Damn. So I, I needed to take a walk. Like, so I took a walk to the beach to, you know, like just think…

AI assessment note: “he had like a really good vision for the app... he offered me like 65”

Q Nice. I love to hear that. Okay, so you, you build the products. Um, how did you get, um, you know, your first customers or first users?

A Yeah, so I learned a lot from, you know, the VC startup that I had before when I realized, you know, distribution is the most important thing. So I actually started working on distribution before I ever started working on the product itself to see, you know, what's the best place for the customers. So I found three ways. They were actually There was actually a community of international students. Um, it was like a newsletter essentially, so I reached out to the person who owned the newsletter to see if this would be a fit. Um, then I reached out to universities and their student unions, because they always had international students, student unions, um, on that end. And luckily enough, Facebook actually has an interest called international students. Um, so those are the three ways, um, I was looking to acquire customers, but my first way of getting proper customers was definitely through that newsletter. We're glad.

AI assessment note: “my first way of getting proper customers was definitely through that newsletter”

Q build the best product in the world, unfortunately, people will not randomly find your startup, so you, you gotta focus on, on distribution, so nice, nice job there. Okay, so going, going down the story, so you build the product, solving a problem that you had personally experienced, and you start to get customers and users. Um, what made you decide to, um, Sell the businesses and have them acquired?

A Um, two things. I didn't anticipate the amount of customer service, um, that happens before someone purchases. Um, so I think I kind of thought to myself, oh, this is what product market fit feels like when you have hundreds of customers shouting at your customer service, trying to get you to, or get to use your product, um, essentially. And I was a one man band, um, at the time. And again, travel wasn't necessarily my space that I wanted to fully go into. Like I knew there were definitely issues that could be solved. Um, so that was the first thing. And then second of all, we had actually received an offer from someone outside of micro acquire. And I think that's what first got me thinking, oh, actually, potentially I could sell this, um, on the end, but I've always done a micro acquire for the last maybe year or two.

AI assessment note: “two things. I didn't anticipate the amount of customer service”

Q urgency within the sales process. So well done there. Um, okay. So fast forward, company's doing, doing well, um, Um, you decide to, to sell the business, and you listed on, um, Acquire. How did, how did that initial, um, you know, process go when you listed it? How did, you know, you meet the first buyer? Maybe take me, like, step one to, like, step three, if you will.

A Yeah, sure. So, uh, didn't really have any expectations when we, when we ended up listing on, on Acquire. Um, it was a really easy process from start to finish. So, you know, basically we, we pretty much had our ducks in a row on, you know, the story and, you know, how we were gonna, um, you know, gonna display ourselves on, on a choir in terms of building out a profile. And, you know, we know who our competitors were and what our strengths were and our differentiators and all that stuff. So that was pretty easy for us to put together, you know, connected stripe, Uh, acquire just made the whole, the whole listing process really easy. And then, you know, kind of transitioning to that next phase where you start meeting with buyers. Um, I mean, it wasn't more than 24 hours after I listed on acquire that I got probably five to 10 inquiries, uh, and received two unsolicited LOIs for at or above asking price and all cash. So, I mean, it was like, it literally, it worked like magic. Um, And we, yeah, I mean, we, we didn't want to like rush into, you know, the first thing that came our way. So we definitely like took our time, tried to stack meetings, you know, all, all around the same day or the same week to try to create some process momentum. Uh, and then we, we basically narrowed it down to two or three parties that we were really excited about. Uh, and we thought had the resources…

AI assessment note: “transitioning to that next phase where you start meeting with buyers”

Q Like, what's been the one that You did, and maybe you can determine this based on the success of the acquisition, or just the product, or just working with the founder, anything is, is, is fair game, but, um, what's like, and maybe you don't have one, maybe I'm asking you to choose your favorite child, so to speak, um, but what's been just your favorite acquisition that you've done?

A I've thought about this a lot, actually, and this is the first time they've been asked, so I'm happy to talk about it. My favorite is a Shopify app we bought called Cross-Sell. It was not our biggest acquisition, but we did buy it, grow it, and sell it to SureSwift Capital, which a lot of your listeners might have heard of, and they're still running strong with it today. Cross-Sell was my favorite for a few reasons. First, I already knew the Shopify space really well at that point. So our first acquisition, which became FOMO, you know, I had to go to the Shopify website and say, what is Shopify? I mean, that's how little I knew. I had to make an account and sell stuff, you know, my, on my own to learn what it is like to be a Shopify seller. By the time we got cross sell a few years later, I knew everything about Shopify. I had gone to the Shopify developer conference. I had memorized the API endpoints in my head. I didn't need the API docs to build features. It was all so comfortable that the entire experience of buying, growing, we rebranded, sort of relaunched, and then ultimately selling cross-sell was like a victory lap. And it's easy to say now, I'm not saying it felt that way during the, during that process, and I'm not trying to say this to pat myself on the back. I'm trying to say this to communicate that when you find a niche param, you know, grouping of parameters, fo…

AI assessment note: “My favorite is a Shopify app we bought called Cross-Sell.”

Q Nice. In terms of, you know, you know, transferring the assets, what, what sort of tips would you give to other founders, given that, you know, you built this, it looks pretty complex, um, or maybe it's, maybe it's not. Um, tell me about, like, the transferring of, of assets, and if you could do anything different, or if you have any tips, um, how would you handle that again?

A Yeah, I think the transfer of assets was relatively simple, actually. I kind of got on a call with the, with the buyer, and we basically, we completed it all within, I'd say, an hour and a half, basically, just transferring, you know, from my email to his email address, you know, the Heroku instances, uh, which is the text that we were using, GitHub, the repository, all that sort of stuff. Um, and it was very simple. I think maybe the, the toughest part To handle is the transfer, especially when you've got like, let's say a sort of proprietary technology that's not well understood, or there's not any kind of, there's nothing out there that is very similar. And so documenting that and making sure that's understood as well by other developers or for other developers is also, um, was, was a challenge, but what I did is I used, uh, Loom. So I basically went through kind of This connects to this, this controls that on a, on a screen recording, um, for those who don't know what Loom is, um, and that really helps speed up the process, because then he could just basically take this to other developers if he needs to, and then he doesn't have to do any of the explaining effectively.

AI assessment note: “what I did is I used, uh, Loom. So I basically went through”

Q just the quality is better and, but there is just like that extra, you know, it'd be nice to just make a feature once and then have it on both platforms. But anyway, let's, let's, let's get to the good stuff. So, um, uh, white label event app was recently acquired. Um, what, what did it do? What problem was it solving? Um, tell me about that a little bit.

A Yeah. So we are a venture studio, so we build our own startups. And at the time we were building for ourselves. And one of the ideas that we had was trying to solve going to festivals at the time, you know, it's nine, 2019, when we started building this product. And the festival application space was very sparse. The applications that existed really didn't have the ability to go offline. And if you've been to a festival before, one of the hardest things is there's 20,030 thousand, sometimes 90,000 people in one location and the internet just does not work. So all of these websites and, and like simple applications that marketing teams are putting out did not have the capability of offline Downloads, right? Without like trying to download the website yourself. So we had the idea of trying to build, uh, an app that was dedicated to be offline first. And then secondly, uh, location services still work while you're, after you've downloaded the contact, uh, you don't need the internet. You can just use the GPS radio on your phone. And so you could still locate the bathroom, locate the stages, find out who's playing because all the data was offline. You could press a button and be located of where you are and where you want to get to. So those are the two main features that we were trying to sell. We built it in 2019. We hired a CEO in early 2020. We were set to release at the beginn…

AI assessment note: “we had the idea of trying to build, uh, an app that was dedicated to be offline first.”

Q fixes and upgrades. So that's, that's, um, awesome that you were able to do that. Um, in terms of, of due diligence, how did, how did that go? It's a mobile application. I imagine it was, um, maybe a code review and then you transfer the app into maybe a new developer account or he or she registered a developer account. Can you walk me through that a little bit?

A Sure. So, uh, whenever you transfer, we had, uh, I guess the way to explain it is most mobile apps have a backend that needs to be supported typically on the web, right? And then you have the servers and the infrastructure behind that. But this application specifically had a web application, which we call the admin portal that allowed you to set up an event where both mobile apps for that event was tied to that specific instance of the admin portal. So the idea was each event or each festival that you operated would have its own app and it would be named that festival's name. And then in the admin portal itself, you would specify which admin, like what the event name was, and you would set it up on the admin portal. So the due diligence was creating an event, having him log in and create his own event, move the stage around, move the bathrooms around. One of the cool features was taking a map and drawing like an illustration on top of the map of exactly hand drawn. Like if you've gone to a festival, somebody like hand draws the bathroom and then a few trees. So he was able to test all of that through the admin portal. And then like, if it was me, when we were testing for our events, I would actually run out to the actual festival, call my developer and be like, I'm running 10 feet. I've run 30 feet this way, and see if he would follow me on the map. Um, I'm not sure if he speci…

AI assessment note: “So the due diligence was creating an event, having him log in and create”

Q will check that one out too. So this next, next question, I've never asked anyone, but given you're in mobile app development, what's, what, who, what's your favorite mobile app that you've ever seen developed? What do you think is They nailed the user experience, um, or it's your personal favorite. Um, what's like an app that you just look at and said they just nailed every point of this?

A Yeah, I'll, I'll give you a few. Um, the team at Spotify, uh, I follow them specifically. The features that they put out are revolutionary, and they end up being industry leaders in a lot of areas, and it's very minor things. Uh, they were the first ones to put the bottom bar on iOS, and everybody followed suit, and this was like, Um, but the way that they organize massive amounts of data and the time they put into each feature on Spotify, it's really interesting to follow. Um, even the, they have these scanning tools, they have these little audio listening tools and music lyrics that are abnormal compared to app development, but very natural for your thumb swiping. So Spotify's team design wise is one of the best. Um, the other one that I always Kind of get addicted to is mile IQ and it's an independent app. It's, it's tracks your, your expenses of how much you drive automatically with GPS, but they have this really clever card system and it's zero does it too a little bit, but not as good because zero zap is absolutely horrible. But mile IQ is, is like peaceful organization of tasks, which in this case is business driving versus personal driving. And their UI is really well done. So those are the two that just came to mind quickly. Um, I'm a huge Google fan. So material three and the new Android and the new, I like Android 13. Uh, they've done a really great job with the sett…

AI assessment note: “The team at Spotify, uh, I follow them specifically.”

Q Microquire network. So we've definitely, um, appreciate all the help that you do for founders. But, uh, now I'm just thinking, um, you know, in terms of the deals that you've closed, it sounds like a number of them and one year, which is really impressive. Do you have maybe like one or two of the favorite deals that you've helped to get acquired, um, that you'd like to share?

A Yes, definitely. I have two quick stories. So Grace with TripKit was on your, on your podcast not too long ago. So we did her transaction. Um, so that was great. She's an amazing, you know, we're, we're picky in a lot of ways. Also the founders we work with, right? I just want to make sure we get along and we vibe because, you know, it could get stressful. It could be an emotional rollercoaster, no matter how much we take off their plate, right? It's an emotional transaction. It's usually the biggest transaction of their life, right? So, you know, Grace was amazing to work with. That's such a rad company. The buyer was incredible. You know, he, he made a decision very quickly on, on closing the transaction. It was a short, you know, from when he saw the company to when we closed was maybe two, one to two weeks. It was very quick. He was a first time buyer. Um, so he was great to work with. Uh, so that was one story. Another story was a recent transaction, um, where we, we got the seller from you guys. And then we, and she was amazing. We loved working with her. And so we actually had, um, one LOI and then the next LOI that came right in was for 40 K more. This guy, you know, he just was like, I want this company so bad, all cash, full price. And he's like, but I'll, I'll pay more than the other LOI because the other LOI was full price, 20% seller carry. So there's a little bit …

AI assessment note: “Yes, definitely. I have two quick stories. So Grace with TripKit”

Q I'm a huge fan too. What I, what I've heard, tell me if this is true. So I've heard of people, um, he's one of those entrepreneurs that's kind of reached celebrity status. Like people will come up to him, they know him, he's kind of a global icon, if you will, but he doesn't have security. He's like a really down to earth person, uh, very approachable. Is that?

A Oh yeah. I ran, it's very accurate. In 2015, I, he was in speaking in San Diego. And they were, he was walking off the stage, and I ran up on to the stage, and I handed him the first check. First check was only a grand, so I could do first charity. I was like, Richard, I love you so much. You're so inspiring. I give him the check, and I ran, and he called my cell phone like half an hour later to thank me, which is so crazy. Um, but no, there's no security, and I just ran up to him. Um, everybody at that event was like, Richard, I want you to sign my book. I want a picture with you. I want you to invest in my company. Like, it was sad to see, like, everybody trying to take from him. So I think it was different for someone just to give him a check and run off.

AI assessment note: “Oh yeah. I ran, it's very accurate.”

Q then I guess, um, uh, my next question would be, how did you transfer all the assets over? I know Shopify is a little bit easier in terms of just kind of, did you just kind of hand over the keys? Did you have a zoom call? Did you have like a list of all the items that you were going to transfer? How did, how did that part work?

A Yeah, I think, um, because I had, um, when I went into this kind of like journey or challenge, um, I had in mind that I'm gonna sell it at some point. So From the beginning I had structured the entire infrastructure like that. So I had like separate AWS account, separate Shopify account, uh, separate, uh, hosting, uh, web hosting. So everything had a separate account. So I would just hand over the accounts to the person that actually acquired them. Um, and I think that saved me a lot of hassle and time because usually all my projects are under one umbrella and it's, it's a mess. Uh, but that really helped. Um, So the whole process was easy. We jumped, jumped on a zoom call. Um, he sent over some terms that I think he, he was the first buyer as well. So he found the terms on a macro acquire. Uh, we went through escrow. So it was kind of just, uh, a journey that we were discovering the process, uh, both of us. Uh, so it was really smooth actually.

AI assessment note: “I would just hand over the accounts to the person that actually acquired them.”

Q cause I assume you enjoy, um, Fitness and helping people in terms of getting in shape, so that's awesome, but I do, before, before I start diving into questions on that acquisition, um, before we started recording, um, I wanted to know, are the, are there really abandoned, like, Ferraris in Dubai, like, from people who just are so rich, they can't get them out, so they just leave them?

A No, so that's not, not what happened, but it, it did used to be a thing, so it was more so around, like, the crash in oh eight, So over here, there's kind of no fail safe, right? The government aren't going to bail individuals out, bail businesses out. So, and back then as well, it was, it was basically illegal to miss payments, right? So what happened was, there was loads of expats, loads of guys from the US, UK, all around the world who had these Ferraris on finance, a crash happened, the bottom fell out, they couldn't afford repayments, so they just drive them into the desert, get on a plane, and leave, basically, and so that's what, that's how that started happening, but, ah, they could probably fill a desert again at the minute, because the cars out here, as I was saying before we went live, it It's obscene. I did a video for one of my friends this morning because I do my work in a golf club. I work out at the golf club, have a coffee in the morning, and I walked outside, and there was a Lamborghini Urus, a Rolls-Royce Wraith, a Rolls-Royce Cullinan, um, a Mercedes G-Wagon, and there were only about eight cars in the car park, and that was like four or five of them.

AI assessment note: “No, so that's not, not what happened, but it, it did used to be a thing”

Q that. Um, I guess, uh, my next question would be, um, so you, you transferred, um, or no, excuse me, can you walk me through, how did you, um, transfer, uh, the assets? Um, how, how, how long did it take? Um, any sort of tips for that? Did you just have like a list of all the assets that you were going to move over one at a time?

A Yep. Yeah, so as part of the due diligence, he wanted basically a list of every account, or every technology, every account, you know, like, where everything was running, so that if he chose to buy it, we basically had an exact list of what we had to transfer. So, um, so yeah, that list was already made, and then we basically set up a series of meetings over a few days where he and I just sat down and transferred everything. Um, most of it was okay. Some of the harder things were, like, uh, two-factor off was tied to my personal cell phone, so we had to, like, do the dance where, like, I turned two-factor off, or I switched it to his phone, and then, like, you know, he read the code to me and stuff, so there's sort of a dance around some of the accounts, and then the other thing that was tricky was AWS. I have, like, a lot of projects in AWS, and you can't just transfer a bucket to someone else, so we had to, like, download all of the assets and re-upload them, and it's only, like, one step, but it has the potential to take down the app while you do that, so if I was going to do that again, I would set up a separate, for any app I wanted to sell, I would set up a separate AWS account, an entire account, um, and that would have gone much, much cleaner, but everything else was just transferring account.

AI assessment note: “we basically set up a series of meetings over a few days where he and I just sat down and transferred everything”

Q What's your, uh, what's your favorite part through all this? Is it the buying? Is it the selling? Is it the growing?

A Um, I love the hunt, right? I love hunting for, for something. I think that's just, it's so exciting to kind of send out your LOIs and see what comes back and negotiate them and come up with these fun structures. I think that's really cool. Um, and then it's the, the first, you know, six to 12 months of kind of getting your hands dirty on, I'm the customer service rep and I'm the project manager. Um, I don't, I don't code. I never have, but I'm on all the standup calls and talking through, uh, you know, all the issues with the devs. I'm in JIRA every day. Um, so yeah, I love those beginning stages. You know, I think for me, like companies under 30 people are a ton of fun. Once you kind of break that 30 plus mark, and you know, I'm sure you're experiencing this too. It's like, you no longer have everyone directly reporting to. You have middle management. Um, politics start coming into the equation, although less so now with everyone being remote, that was really a, uh, you know, in office kind of thing. Um, yeah, so I, I like companies under 30 people, just a lot of fun for me.

AI assessment note: “I love the hunt, right? I love hunting for, for something.”

Q me more about the hunt. So you, so you, so you like hunting. I like that. Um, what do you, what, what do you look for, um, like to start, what are like the main qualities or attributes like that gets you excited aside from obviously price is probably in there. Um, but like, what kind of like gets you super excited when you come across a good acquisition opportunity?

A Um, you know, it's the same for me. Like when I look for real estate properties to buy, I like to start also with the oldest. So I sort from oldest first to kind of see who's kind of been sitting out there for the longest is going to be the most desperate. You know, who's the, the last girl at the dance who, uh, is all alone in the corner. Um, typically they're, you know, willing to negotiate significantly more on price than someone else. Um, so I do that. I also tend to look at the overall reviews for each company and the more negative the reviews are from customers, the more likely I'm going to be interested. I know that sounds really perverse. It doesn't make a lot of sense to a lot of people, but it has to be for certain reasons, right? Typically what I find is when founders kind of give up on a project, it may have been an amazing product, but they no longer service the customer. So customer service kind of gets overwhelmed and maybe there's no one doing customer service and no one's answering these emails. So you get all these one star reviews on whatever platform they're on. And it just destroys the reputation of the software. And then I come in and say, wow, you know, What they have is actually really cool. Maybe they answered their emails and got back to customers and fixed the bugs. They'd actually have something worthwhile again. So I do love to look at, you know, on…

AI assessment note: “I like to start also with the oldest. So I sort from oldest first”

Q because, you know, there's a lot of firms that kind of say, you know, kind of the fluffy words, founder first, you know, this and that, and, um, it's all in, um, you know, good faith, uh, what have you, um, but you're so authentic about it. So, um, Like, how did you get into entrepreneurship? How did you stumble into this? What, what created this, um, passion within you?

A I think it's not something I really chose. I don't even think it happened. I best guess I have is it's actually like some sort of DNA type thing. You probably share it. Um, my story is I'm a middle-class kid from, you know, West Covina, Los Angeles, outskirts of nowhere. And I've been a lifelong entrepreneur. I didn't come. There's no, a lot of, not a lot of other entrepreneurs in my family. I didn't, wasn't taught, but I was selling baseball cards in elementary, Canyon junior high computers to graduate seniors high school. I'm sure there's a lot of people listening to this who have a similar story. Uh, I tried to start five companies in college, no idea what I was doing. I did my undergrad at Duke and the school has become very entrepreneurial since then. But at the time, one of two entrepreneurs on campus and I badly needed mentorship and didn't get it. Uh, came out, knew I needed to, you know, learn real business skills. Uh, did a lab through consulting at Bain, and then, uh, doing diligence and M&A transactions at KPMG. Did my MBA at Columbia, and then about 16 years ago, was fortunate enough to land in a venture capital job. Um, had some really great mentors. Uh, learned and taught a lot about the business, and then 10 years, uh, thought it was time to go out on my own and, uh, set up Interplay.

AI assessment note: “I've been a lifelong entrepreneur... selling baseball cards in elementary”

Q to, to tech? Why did you move into, um, mainstream businesses? If that one was going so well, I assume And I, I know it's going well now. Um, I think you've done a fantastic job, um, growing the business and, uh, keeping it alive and improving it. Um, what, what made you decide to diversify even more into, um, maybe some of the other companies that are completely different?

A Yeah, it all comes down to purchase multiple and cash flow, right? We have a unique lens on the world. Our business model is cash flow first. So everything we think about is how do we create an engine that generates cash flow that we can then reappropriate or move in a direction that we want. We don't want to Buy an expensive business that we then flip a few years later at a higher multiple. That's really not our model, and there's a lot of firms that do do that. I would say first, you know, the thing that allows us to do this is like for the up council story, Xavier and I were not involved as operators. The real operators were KJ and her team. She's the CEO of the business. She's, she's the CEO of the whole tech platform where we now own three companies. And because we have such high quality leadership, we can actually look across different industries as opposed to having our hands tied And having to really just focus on the day-to-day operations of the business. So it's that partnership between us as investors and our operators that allow us to go into different industries in the first place. Um, and then back to my comment about generating cash flow, you know, if you buy a software business and I'm sure, you know, folks have seen it, let's say you buy a three million ARR software business, maybe you're paying three to five Times yearly revenue. Maybe cash flow is like 500,00…

AI assessment note: “it all comes down to purchase multiple and cash flow, right?”

Q know, a big topic for startups these days. I've heard everything from a newsletter is a community, uh, you know, having an audience on Twitter is a community. Um, how do you, how do you think about audience building? Like, what, what are maybe, like, what is your playbook? What is maybe common mistakes? Um, that's like five questions all at once. I'll let you kind of pick the one

A Uh, so I'll tell you one thing, right? Like audience is different than a community. Insta influencers, they're all audiences. People have newsletters, they're audiences. That's great. The community is where members or people, uh, the audience interacts with one another without the, the sort of influence, key influencer involved, right? So like, I think audience to audience interaction is very important for community and that strengthens the community and that keeps them coming. Uh, but if you have a great audience, I think the next step is how do you drive that audience to audience interaction? So for us with both, actually, we really didn't intend to build community. What ended up happening was we were having challenges, uh, trying to get people to listen to us to buy our service. And we were scraping emails and making calls and it was just really hard. And so we're like, you know what? We have challenges. We've been failed founders. Let's start pizza nights. What is, who's our ICP? Our target market is, is a founder or CEO of a technology company. And this is like years ago, man, five, six years ago when like community wasn't even cool. And we started hosting these pizza nights on specific topics related to challenges. The first one, 10 people showed up, and then every time it hosted, more and more people showed up. And then one day the coworking space is like, guys, you have…

AI assessment note: “audience is different than a community... The community is where members or people... interacts with one another”

Q But people came now, would you, would you say though, because it's a, I guess it's a three-sided marketplace in a way, right? Is it three-sided? Is it two sides? You got acquirers, you got, you got, uh, sellers, and then you got all these things you need, like service providers for the transaction, right?

A Yeah, so we have buyers, we have sellers within Microquire. You can, uh, even hire an attorney, an investment banker, a business broker to help you with your deals. So there's kind of a marketplace inside a marketplace. So think of it as, um, three ICPs, um, and with basically each ICP is an onion with many layers. So buyers ranging from, you know, multi-billion dollar private equity funds all the way down to just like first time buyers. Um, yeah. That's probably the biggest group, you know, lava numbers, 150,000 people. Not all of them have millions of dollars. Um, and then on the sell side, same thing, small startups ranging all the way down to, you know, multimillion dollar startups, and then advisors as well, ranging from legal to just general M&A advisory. Um, so yeah, that's my answer.

AI assessment note: “Yeah, so we have buyers, we have sellers within Microquire.”

Q Nice. So tell me a little bit more about, um, Stay Tuned Digital. What kind of apps do you specifically look for? Is there a certain category? Is there a certain size? Is there a certain, just anything that kind of, you know, really gets you guys excited?

A Yeah, does it have to have like a rhyming name, a literative, um, ambic pentameter? No, we, we're trying to focus. We have six apps right now that we've acquired since the fall, um, and we are focusing on things that make sense to our merchant minds, which is things that increase AOV, UPT, um, conversion, which a lot, I know many, many apps you can kind of say they do, but we're really trying to focus on, on those. So anything from Upsells to bundle builders, um, things like that. And in terms of size, we're open to anything. Um, we typically are looking for things over, uh, 20 K a month in MRR, but really open. And I think the other thing we're very opportunistic in terms of who, who is selling and how they want to grow it. Um, it's been really nice finding some merchants, excuse me, some developers, That want an earn out and want to stick with the growth of the app for a little bit because they really believe in it and they want to hand it off to a team that believes in their product and their vision and can help them, you know, see that through a bit.

AI assessment note: “things that increase AOV, UPT... over, uh, 20 K a month in MRR”

Q Yeah, that's a hard question, but I like, I like your answer a lot. Um, so your firm has acquired a number of, um, Shopify apps. Um, what, what's your personal favorite that you've acquired?

A We acquired one, uh, one of our, I think it was our second app called Box Builder. Um, and it was an app built by a self-taught engineer. Uh, to solve a problem. And so off the bat, I love it. It was, you know, the intent was to solve a problem, and it was to allow merchants to create their own bundles and add certain rules to them. Um, you know, whether it's a buy two, get one free, or a whole curated experience of filling up your cart, With different products. Let me just explain it a little better before I talk about why it's my favorite. So one brand, beauty brand, um, sells fake eyelashes and tools to put them on your face. Um, it's kind of overwhelming because they all look the same. So they were able to make a three-step builder that allows customers to select their style of eyelash and put as many in their cart as they want to trigger a discount. And the next step walked through which glue they need. And then the last step was some accessories. So I love this the most, um, For a couple of reasons. One, it serves such a need. Not only is this not an innate feature set in Shopify, but this app also allows you to apply discounting in addition to Shopify's discounting, which has some limitations. Um, the biggest limitation of Shopify discounting is that you can only use one discount code. Um, so this kind of helps merchants get around that, but whether a merchant, and anoth…

AI assessment note: “I think it was our second app called Box Builder.”

Q Yeah. Nice. Um, okay, so switching gears here, um, there's, there's a lot of Shopify developers and just, you know, startup founders that are potentially looking at this in this next year. If you had to give maybe one or two pieces of advice, you can break the rules again and give three if you want. Um, uh, what, what would that be?

A I think, um, Be really upfront about what you're looking for, um, because there are no issues with that. If you want to sell and have nothing to do with it, that's totally your prerogative. If you want to sell to someone who's going to partner with you in some way to carry it to the holy land of where you think it can get, because you have all that product knowledge, Great. Um, just be super upfront. There's no wrong way to do it. There are acquirers for every type out there. Some that will sign the check and want you to walk away and others that will want to partner with you. Um, so I think off the bat, make that really clear. Um, cause only when that's on the table, can you work with a acquirer to come up with a structure that works for both of you? Um, yeah, and I, I mean, we're, we didn't, we should all be honest with each other too. I think that's something that we try to do, uh, What we like to do most, like we really like when, when sellers want to do an earn out, and why? Because, um, they have so much of the knowledge in their head about what works and what doesn't, and we love partnering and working with great people. We're having a blast with, um, August Noble from AOV Boost we just acquired, working on a product roadmap about where we're going to take it and how we're going to grow it, and he's excited, and we're excited, and Um, it's fun. So I think that would be o…

AI assessment note: “Be really upfront about what you're looking for, um, because there are no issues”