The Exchanges

Q I completely agree. Walk me through the, your acquisition process. Like, what were you looking for from the start? Did you decide in October, like, I'm going to acquire an agency. I don't know the specific shape and size of it, but I'm going to start looking around. Um, how did you get started and what does your process look like?

A Yeah, it's funny. Initially, like back in, uh, this is not long ago, but let's say August, September, I was like, you know what, what if I, I went in a totally different direction and bought some like I don't know, service based business or like a blue collar business that I know nothing about. Um, there's plenty of people on the internet that will brainwash you into doing that. Uh, I think there's more value in like staying in your lane. If you have an expertise, it's much easier to grow from there. So, uh, just a lot of self learning, a lot of research. I have a decent vibe, decently, uh, crystallized buy box and like what I wanted, what I wanted to buy. So, um, I knew I wanted it to be a marketing agency that specialized in something That had some form of a subscription recurring base of clients that's been around for at least a couple of years that has a really talented team, good processes. I didn't need it to be this giant agency that's doing four or five million, uh, in EBITDA. Like I actually was looking for something a little bit smaller, um, something that's at least 300 K plus EBITDA that was important to me, but like there was a, um, a cap on that. Uh, I didn't want to do too much leverage on the first deal. Um, But yeah, a specialist agency with a recurring base, and I wasn't really looking for design, honestly. I look at, it's funny, I had a lot of different, like…

AI assessment note: “downloaded Acquire, bought the annual package, started talking to founders literally within, like, 24 hours.”

Q Tell me about the, the due diligence process. Tell me about, um, okay, you, you see this as a good deal. You're interested. You have a good conversation with, um, the founder. Uh, what happened after that? How long did the process take? What did it look like?

A Yeah. Met with him two or three times, had a bunch of questions. I sent him a, an LOI draft within maybe like seven to 10 days. Um, he reviewed it and then we got to work. So I got a, I had no idea what I was doing. This was my first acquisition. So I was just asking dumb questions to the M&A, Slack community, like, what do I do here? Um, I got a quality of earnings specialist, uh, to just make sure everything was clean and kosher. I, I got a lawyer, and maybe that's another conversation, but I think if you're doing a deal under a certain size, it doesn't always make sense to bring in an attorney for something like that. It ended up being a very costly venture to do that. It's kind of like a sidetrack, but in any event, it was my first deal. I wanted to do it the right way. Um, so quality of earnings, attorney, Due diligence took a few weeks. I secured some financing, uh, through the SBA. Um, so yeah, I was like really hitting like every single box that you could check off when you do an acquisition. Um, and just getting to know the founder more, had weekly conversations with him about the clients. I would say in tandem, like while you're doing the due diligence was critical that I met with him regularly and just got to know him a little bit better, how he runs his business. There are certain, he was, he's a very self-aware person, uh, who understands, uh, He's built something …

AI assessment note: “Due diligence took a few weeks. I secured some financing, uh, through the SBA.”

Q at some point go build another business, which is, you know, back to that zero to one phase that they really sell at. Um, so tons of those opportunities I see, um, you know, tell me a little bit more about, you know, plans to, to grow the business from here. Is it, uh, to add on, you know, new go to market engine, uh, what does that look like?

A Yeah, so we're putting in a go-to-market engine. I would recommend to anyone who's doing an acquisition, get started on that sooner rather than later. Whether you have a contact or an agency or a friend that can help you, or you can do it yourself, it'll, it'll help, you know, due diligence, you know, once you do the acquisition and you're integrating, um, there's a lot of unknowns that come up. There's a lot of chaos and stress or systems you want to put in place. Like, I can't imagine how stressful this would have been If I knew nothing about growth or outbound and I'm like, oh shit, like that's another thing that I have to worry about. And I'm just going to like pray that like we get phone calls to do business with us. Like, I don't, it doesn't matter if you have a background in growth or not, like you should get started on that, like as soon as possible. So that's what we did. Even before the acquisition closed, I started like buying domains, like building email infrastructure for the new, for the company, like warming up mailboxes, um, making sure that we knew whose LinkedIn profiles we're going to do outreach on. Putting a content plan on LinkedIn in place. How are we going to run ads so that there's no guesswork? Day one, I put my outbound team on the case, like they were just another client and we got the engine moving pretty fast. So the goal is to continue scaling tha…

AI assessment note: “Yeah, so we're putting in a go-to-market engine.”

Q and it's kind of a turnoff for me. Uh, and then in terms of acquisitions, I think what you're doing is, is super, super smart, building out the business through acquisition rather than building out each, uh, part of the business. Um, what made you decide that this was a path for you rather than building out, say your own design service? Uh, why was acquisition the way to go?

A Yeah, I'm extremely risk averse, like just as that's always been my identity. Uh, I always wanted to do every move should be profitable and should have limited downside, but I kind of saw the light in the last several months that I think a lot of people need to dispel what M&A is and who it's for. I think most people feel like, well, that's reserved for like big, you know, cash rich agencies that are giants that are publicly traded. You need ten million dollars in the bank to even consider an acquisition. And, you know, working, like, learning, learning about the process, even through, like, acquire and through M&A advisors that I work with, guys like Peter Lang, who are in the agency acquisition space, shout out to him. Um, he kind of dispels that. Like, you don't, you don't need to be, um, this giant to actually grow through acquisition. You kind of think of it as, like, corporate business development. You know, organic growth is linear. You know, you're, you're pitching one client at a time, which, Is what I've always done and will continue doing, um, for love of the game, I suppose, but you can actually have the geometric growth, uh, that you want where you adopt systems, clients, staff in one go. So it's kind of like a, I would say it's a cheat code, but it's not really a cheat code because there's an incredible amount of like work and effort and stress that goes into it. …

AI assessment note: “you can actually have the geometric growth... adopt systems, clients, staff in one go”