StarZero All shows Try the podcast clipper →

Dec 1, 2022 · 21m · top-founders

How he sold his $2.3m SaaS with approx $500k EBITDA for $6m+ Cash

Adrian Dayton · 11m spoken Nathan Latka · 7m spoken
0:00 / 0:00

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

In this interview, Nathan Latka speaks with Clearview Social founder Adrian Dayton about scaling his legal tech SaaS to over $2 million in ARR and executing an acquisition at a 13x EBITDA multiple. Dayton breaks down how strategic add-backs, fractional CFO accounting preparation, competitive deal tension, and structured earn-outs enabled a lucrative exit and paved the way for his post-exit advisory venture.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 38% of the talking time here. How this is scored →

Nathan as informed peer 5.3 Guest teaching 2.4 Guest disagreement 1.0 Nathan pushing back 1.9
05100:0010:0020:001:44–5:00 · Nathan as informed peer 5/10 Clearview Social Origins and Capitalization History Nathan introduces the company background and assumes they were bootstrapped, which Adrian gently clarifies was actually $1M in angel funding. Adrian shares how Nathan introducing a competing buyer previously created leverage to secure a deal with another PE firm.5:00–9:00 · Nathan as informed peer 6/10 Strategic Transparency and Founder Valuation Mindsets Nathan explores the strategy of broadcasting numbers to create FOMO among buyers. Adrian explains his valuation multiple framework (13x projected EBITDA) and private equity's EBITDA multiple arbitrage strategy.9:01–12:17 · Nathan as informed peer 7/10 Maximizing EBITDA Valuations Through Financial Add-Backs Adrian details how identifying $200k-$300k in personal add-backs dramatically increased the acquisition price. Nathan rapidly calculates the total deal valuation and cash payout structure, which Adrian confirms is within 15% of actual numbers.12:18–14:38 · Nathan as informed peer 5/10 Navigating Post-Sale Earn-Outs and Founder Transition Nathan challenges why a founder would stay on for an earn-out rather than walking immediately upon sale. Adrian explains the light initial workload and the ski retreat catalyst that prompted his eventual exit to start EOS consulting.14:39–17:51 · Nathan as informed peer 6/10 Team Exit Dynamics and ESOP Pool Distribution The conversation shifts to employee equity distribution and tax mechanics under QSBS. Adrian explains why option holders cannot qualify for QSBS benefits and expresses frustration at the inequitable tax treatment between founders and early employees.17:51–19:54 · Nathan as informed peer 5/10 Preparing Financial Books with Fractional CFO Services Adrian outlines the decision to spend $18k on a fractional CFO firm before exit to ensure accrual accounting was clean for diligence. Nathan validates the strategy and clarifies the ongoing bookkeeping structure.19:55–21:08 · Nathan as informed peer 3/10 The Famous Five Rapid-Fire Questions Nathan runs through his rapid-fire Famous Five format. Adrian playfully pushes back on being asked unexpected questions before answering on Dune and Trello.1:44–5:00 · Guest teaching 3/10 Clearview Social Origins and Capitalization History Nathan introduces the company background and assumes they were bootstrapped, which Adrian gently clarifies was actually $1M in angel funding. Adrian shares how Nathan introducing a competing buyer previously created leverage to secure a deal with another PE firm.5:00–9:00 · Guest teaching 3/10 Strategic Transparency and Founder Valuation Mindsets Nathan explores the strategy of broadcasting numbers to create FOMO among buyers. Adrian explains his valuation multiple framework (13x projected EBITDA) and private equity's EBITDA multiple arbitrage strategy.9:01–12:17 · Guest teaching 2/10 Maximizing EBITDA Valuations Through Financial Add-Backs Adrian details how identifying $200k-$300k in personal add-backs dramatically increased the acquisition price. Nathan rapidly calculates the total deal valuation and cash payout structure, which Adrian confirms is within 15% of actual numbers.12:18–14:38 · Guest teaching 2/10 Navigating Post-Sale Earn-Outs and Founder Transition Nathan challenges why a founder would stay on for an earn-out rather than walking immediately upon sale. Adrian explains the light initial workload and the ski retreat catalyst that prompted his eventual exit to start EOS consulting.14:39–17:51 · Guest teaching 4/10 Team Exit Dynamics and ESOP Pool Distribution The conversation shifts to employee equity distribution and tax mechanics under QSBS. Adrian explains why option holders cannot qualify for QSBS benefits and expresses frustration at the inequitable tax treatment between founders and early employees.17:51–19:54 · Guest teaching 2/10 Preparing Financial Books with Fractional CFO Services Adrian outlines the decision to spend $18k on a fractional CFO firm before exit to ensure accrual accounting was clean for diligence. Nathan validates the strategy and clarifies the ongoing bookkeeping structure.19:55–21:08 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions Nathan runs through his rapid-fire Famous Five format. Adrian playfully pushes back on being asked unexpected questions before answering on Dune and Trello.1:44–5:00 · Guest disagreement 1/10 Clearview Social Origins and Capitalization History Nathan introduces the company background and assumes they were bootstrapped, which Adrian gently clarifies was actually $1M in angel funding. Adrian shares how Nathan introducing a competing buyer previously created leverage to secure a deal with another PE firm.5:00–9:00 · Guest disagreement 1/10 Strategic Transparency and Founder Valuation Mindsets Nathan explores the strategy of broadcasting numbers to create FOMO among buyers. Adrian explains his valuation multiple framework (13x projected EBITDA) and private equity's EBITDA multiple arbitrage strategy.9:01–12:17 · Guest disagreement 1/10 Maximizing EBITDA Valuations Through Financial Add-Backs Adrian details how identifying $200k-$300k in personal add-backs dramatically increased the acquisition price. Nathan rapidly calculates the total deal valuation and cash payout structure, which Adrian confirms is within 15% of actual numbers.12:18–14:38 · Guest disagreement 1/10 Navigating Post-Sale Earn-Outs and Founder Transition Nathan challenges why a founder would stay on for an earn-out rather than walking immediately upon sale. Adrian explains the light initial workload and the ski retreat catalyst that prompted his eventual exit to start EOS consulting.14:39–17:51 · Guest disagreement 2/10 Team Exit Dynamics and ESOP Pool Distribution The conversation shifts to employee equity distribution and tax mechanics under QSBS. Adrian explains why option holders cannot qualify for QSBS benefits and expresses frustration at the inequitable tax treatment between founders and early employees.17:51–19:54 · Guest disagreement 0/10 Preparing Financial Books with Fractional CFO Services Adrian outlines the decision to spend $18k on a fractional CFO firm before exit to ensure accrual accounting was clean for diligence. Nathan validates the strategy and clarifies the ongoing bookkeeping structure.19:55–21:08 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Nathan runs through his rapid-fire Famous Five format. Adrian playfully pushes back on being asked unexpected questions before answering on Dune and Trello.1:44–5:00 · Nathan pushing back 2/10 Clearview Social Origins and Capitalization History Nathan introduces the company background and assumes they were bootstrapped, which Adrian gently clarifies was actually $1M in angel funding. Adrian shares how Nathan introducing a competing buyer previously created leverage to secure a deal with another PE firm.5:00–9:00 · Nathan pushing back 2/10 Strategic Transparency and Founder Valuation Mindsets Nathan explores the strategy of broadcasting numbers to create FOMO among buyers. Adrian explains his valuation multiple framework (13x projected EBITDA) and private equity's EBITDA multiple arbitrage strategy.9:01–12:17 · Nathan pushing back 1/10 Maximizing EBITDA Valuations Through Financial Add-Backs Adrian details how identifying $200k-$300k in personal add-backs dramatically increased the acquisition price. Nathan rapidly calculates the total deal valuation and cash payout structure, which Adrian confirms is within 15% of actual numbers.12:18–14:38 · Nathan pushing back 3/10 Navigating Post-Sale Earn-Outs and Founder Transition Nathan challenges why a founder would stay on for an earn-out rather than walking immediately upon sale. Adrian explains the light initial workload and the ski retreat catalyst that prompted his eventual exit to start EOS consulting.14:39–17:51 · Nathan pushing back 3/10 Team Exit Dynamics and ESOP Pool Distribution The conversation shifts to employee equity distribution and tax mechanics under QSBS. Adrian explains why option holders cannot qualify for QSBS benefits and expresses frustration at the inequitable tax treatment between founders and early employees.17:51–19:54 · Nathan pushing back 1/10 Preparing Financial Books with Fractional CFO Services Adrian outlines the decision to spend $18k on a fractional CFO firm before exit to ensure accrual accounting was clean for diligence. Nathan validates the strategy and clarifies the ongoing bookkeeping structure.19:55–21:08 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions Nathan runs through his rapid-fire Famous Five format. Adrian playfully pushes back on being asked unexpected questions before answering on Dune and Trello.

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

0:00 · Nathan 84.3% · guest 15.7%0:00 · Nathan 84.3% · guest 15.7%3:00 · Nathan 17.4% · guest 82.6%3:00 · Nathan 17.4% · guest 82.6%6:00 · Nathan 35.7% · guest 64.3%6:00 · Nathan 35.7% · guest 64.3%9:00 · Nathan 30.5% · guest 69.5%9:00 · Nathan 30.5% · guest 69.5%12:00 · Nathan 26.4% · guest 73.6%12:00 · Nathan 26.4% · guest 73.6%15:00 · Nathan 31.5% · guest 68.5%15:00 · Nathan 31.5% · guest 68.5%18:00 · Nathan 30% · guest 70%18:00 · Nathan 30% · guest 70%21:00 · Nathan 85.3% · guest 14.7%21:00 · Nathan 85.3% · guest 14.7%
Sharpest disagreement ▶ 17:10 Adrian criticizes tax unfairness for employee option holders

Adrian pushes back against Nathan's tax structuring suggestions, arguing that option holders take equal operational risks but face unfair standard income tax treatment.

 Hardest push from Nathan ▶ 12:18 Nathan challenges the decision to work through an earn-out

Nathan directly challenges Adrian on why he chose to stay post-acquisition instead of walking away immediately, arguing founder time is worth far more than remaining earn-out percentages.

 Biggest teaching moment ▶ 16:00 Adrian explains QSBS C-Corp requirements over LLC structures

Adrian educates the audience and details why founders must operate as a C-Corp for five years to capture QSBS tax exemptions rather than an LLC.

 Nathan holds their own ▶ 11:50 Nathan reconstructs acquisition deal terms in real time

Nathan demonstrates financial mastery by reverse-engineering the exact deal valuation ($6.5M) and upfront cash payout ($4.5M) from Adrian's rough EBITDA multiple figures.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Clearview Social Origins and Capitalization History 5312 Nathan introduces the company background and assumes they were bootstrapped, which Adrian gently clarifies was actually $1M in angel funding. Adrian shares how Nathan introducing a competing buyer previously created leverage to secure a deal with another PE firm.
Strategic Transparency and Founder Valuation Mindsets 6312 Nathan explores the strategy of broadcasting numbers to create FOMO among buyers. Adrian explains his valuation multiple framework (13x projected EBITDA) and private equity's EBITDA multiple arbitrage strategy.
Maximizing EBITDA Valuations Through Financial Add-Backs 7211 Adrian details how identifying $200k-$300k in personal add-backs dramatically increased the acquisition price. Nathan rapidly calculates the total deal valuation and cash payout structure, which Adrian confirms is within 15% of actual numbers.
Navigating Post-Sale Earn-Outs and Founder Transition 5213 Nathan challenges why a founder would stay on for an earn-out rather than walking immediately upon sale. Adrian explains the light initial workload and the ski retreat catalyst that prompted his eventual exit to start EOS consulting.
Team Exit Dynamics and ESOP Pool Distribution 6423 The conversation shifts to employee equity distribution and tax mechanics under QSBS. Adrian explains why option holders cannot qualify for QSBS benefits and expresses frustration at the inequitable tax treatment between founders and early employees.
Preparing Financial Books with Fractional CFO Services 5201 Adrian outlines the decision to spend $18k on a fractional CFO firm before exit to ensure accrual accounting was clean for diligence. Nathan validates the strategy and clarifies the ongoing bookkeeping structure.
The Famous Five Rapid-Fire Questions 3111 Nathan runs through his rapid-fire Famous Five format. Adrian playfully pushes back on being asked unexpected questions before answering on Dune and Trello.

Statements from this episode (13)

Assertion Not checkable as stated
Dayton: Clearview Social hit a TAM ceiling after dominating its niche
“We had a great product and we kind of hit up against a TAM problem. So the industry just wasn't that big and we'd eaten most of the market.”
Adrian Dayton Dec 1, 2022 ▶ 2:56
Disclosure
Dayton: Blind competing term sheet price drove a higher valuation and earnout
“And they didn't know all the terms. They just knew the price. Right. So, so they had much better terms and they bumped up the price and, you know, structured a two year earn out so that I could get all the money I wanted for the company.”
Adrian Dayton Dec 1, 2022 ▶ 4:44
Insight
Dayton: Startups under $1M EBITDA cannot rely on M&A bankers for exits
“Now, look, if my company had been a little bit bigger or we'd had, you know, been to a million in EBITDA, it would have been simple. We could have hired a banker. We could have done a full process. They could have shopped the product. But really like when you'…”
Adrian Dayton Dec 1, 2022 ▶ 5:41
Disclosure
Latka: Founders leak their metrics on my podcast to induce acquisition bids
“I full disclosure have, I won't name them, but I have founders who call on my show specifically because they want a reason to share their numbers live where it looks like I'm beating it out of them, but really they want to share it because they want the market…”
Nathan Latka Dec 1, 2022 ▶ 6:06
Disclosure
Dayton: Clearview Social sold at a 13x multiple on ~$500k EBITDA
“So our EBITDA is, Was between, let's just say between four and 700,000 dollars at the time of the sale. Okay. And the framework that we were bought under is 13 times EBITDA.”
Adrian Dayton Dec 1, 2022 ▶ 7:30
Assertion Not checkable as stated
Dayton: Clearview Social reached $1M EBITDA within two years of sale
“By the way, Clearview Social has now hit a million dollars in EBITDA in the two years since we sold.”
Adrian Dayton Dec 1, 2022 ▶ 7:50
Insight
Dayton: Private equity buys SaaS at 13x EBITDA to sell at 20x
“But this is also the private equity game is this kind of EBITDA arbitrage because if they can buy companies at 13 X, they put them all together into a bigger company and then they can sell them for 20 X.”
Adrian Dayton Dec 1, 2022 ▶ 8:31
Disclosure
Dayton: Personal add-backs like coaching and cars added $200k+ to EBITDA
“Like I had a company car and I had extra like coaching resources that I use that didn't need to be part. Right. And so it's like, when I started adding all these things back, You know, we're looking at like two or 300,000 dollars of EBITDA.”
Adrian Dayton Dec 1, 2022 ▶ 9:26
Assertion Not checkable as stated
Dayton: Clearview Social acquisition paid 70% upfront and 30% in earnouts
“So, so the way they structured the deal, it was about 70% up front, 20% year one, 10% year two.”
Adrian Dayton Dec 1, 2022 ▶ 10:11
Assertion Not checkable as stated
Dayton: Year-two earnout was tied to shareholder equity, not continued employment
“But then the thing is, if they hit the number in year two, I still get the money because it's based on my stock ownership, not on my participation.”
Adrian Dayton Dec 1, 2022 ▶ 10:26
Disclosure
Dayton: Clearview Social awarded 9% of its 15% ESOP pool before selling
“So the, so, so the ESOP pool was, we had set aside about 15%, but we had only awarded about nine of the 15.”
Adrian Dayton Dec 1, 2022 ▶ 15:19
Insight
Dayton: Software startups should immediately incorporate as C-Corps for QSBS protection
“Every, every company, every software company out there, if you're not a C corp, like change to a C corp immediately. Cause you have to hold for five years as a C corp to get QSBS protection.”
Adrian Dayton Dec 1, 2022 ▶ 16:06
Disclosure
Dayton: Clearview Social paid a fractional CFO $15k to clean pre-sale books
“So we paid them five or six grand a month. But that was just for the three months for them to clean up our books, right? So once they did that, we actually transitioned to something else”
Adrian Dayton Dec 1, 2022 ▶ 18:58
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 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