The Exchanges

Q Yeah, it makes good sense. Um, what do you have to get new users to do in the first week to make sure they get sticky?

A Yeah. So they just have to do two things. They've got to click on the link, the invite to the software that they get, and they've got to click the share button, you know, schedule their first share. And, uh, you know, when we do a big kickoff, we give all the materials, all the emails for the marketers to send out in advance. We, we do video training, um, and webinars to kick it off. And, um, You know, we get about half of them, half the people added within organizations to add, and about half of that half start sharing and become active. So, you know, some firms may say, oh, well, only 25% of our users are active. Well, before that, less than two percent of your users were sharing to social media. So, um, you know, that's, that's how we, so success for us is that we have 25% of their users, you know, active successfully using the product.

AI assessment note: “they just have to do two things. They've got to click on the link”

Q Yeah. So how did you do that? Right. I mean, you, you were bored, so you wanted to sell, but you don't want everyone to think you want to sell price.

A Yeah. You don't want to think it's a fire sell. Right. So honestly, what I did is I reached out to a few friends that had sold their companies and just to get advice. And one of those people said to me, told me their whole story. And they're like, by the way, I think, you know, I think our platform might want to buy your company. After I told him my numbers and I said, okay, that's great. And then at the same time, I had a kind of follow-up podcast with you where you said, what's your EBITDA? And you said, I think someone would write you a check for your company right now. And I was like, let's go. And, and I came on your program and you lined up three buyers. And actually, so this, I haven't told you this, but it was like a perfect storm. So this other friend who had sold their company, his private equity firm was interested in us. They're kind of dragging their feet. And then you brought to the table another buyer who right on the program made an offer. They sent over a term sheet. We had another term sheet from these guys. And, and the crazy thing is the buyer you introduced me to, um, their numbers, their terms were terrible, but the other guys didn't know that. Right.

AI assessment note: “what I did is I reached out to a few friends that had sold their companies”

Q So, so what's the, I mean, you've gone from 147 customers, 180 over the past sort of year and a half, two years, but, but they're bigger customers, which is great. Are you profitable today or still burning cash?

A Yeah. So we're profitable, but, um, but we're right on the line. I mean, this was going to be Going to be right. This is going to be our breakout year. I mean, every dollar we, we increased this year was going to be pure profit based on our model. You know, um, And, and so a little bit disappointing how COVID hit us, but we were built such that we didn't need to grow to survive. Um, we just needed to grow, uh, you know, to start making some money, which I know is kind of a novel thought for SaaS companies, but, um, we were really in a position to start doing that this year. And, um, yeah, so that's kind of where we are in terms of like, we're EBITDA positive. Um, but just barely.

AI assessment note: “we're profitable, but, um, but we're right on the line.”

Q Yeah. So why not leave? Yeah. There's a lot of founders that like get these earnouts and like, because 30%, it's like your time is more valuable than the extra million you could earn over the next two years. So why not leave right when it closed?

A Well, it's like my earn out in that first year, I didn't even have to stay a whole year. Like we closed end of March. I just had to stay till the end of December. And it's like, I have a great team. We have a great flow. I wasn't, I already was only working 20 hours a week because I, I had a great team, you know? And so it was like, okay, I could keep my benefits, keep making money, and then guarantee that I get this first year earn out. So it just, it just made sense. But by the, by the beginning of the next year, I actually went to a ski event with Dan Martell with all his other, it's a bald face. I don't know. He's probably in fine.

AI assessment note: “I could keep my benefits, keep making money, and then guarantee that I get”

Q That's an eight year journey here. Okay. So again, people, this is what it takes, right? It's the long, slow journey, right? So eight years. Um, now talk to me about why you decide to sell and how you met the buyer.

A Yeah, absolutely. So, um, I kind of got to this point where I had put my team in place. 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. And after trying to pivot into other, other sectors, I just realized I just wasn't having fun anymore, you know, and it was so much fun building it that it just kind of was time. Right. Uh, so that's kind of what made me decide to, and also we had turned the corner In, in terms of positive EBITDA. And so it was like, not only my kind of feeling like I'm ready to sell, we have something that someone might buy, you know?

AI assessment note: “that's kind of what made me decide to, and also we had turned the corner”

Q because they want the market to know to induce bids. Right. So like, that's a very good way to like, use me to your effectively your advantage. But to your point, you sort of had some sort of number in mind. I imagine ignore the offers in the term sheet. How did you personally, Adrian, as a founder, eight years in, 2.5 in revenue, come to what your number was?

A Yeah, it's a great question. I mean, I think, I think the reality is every single day you're running a SaaS company, you live with this stress, this fear of it all crashing down, you know? And so, and then you have this dream of some huge exit, right? Like where you get like private Island money, you know what I mean? Uh, and so when it came down to it, it was like, okay, you know, you know, what is like a single, what's a double, what's a triple, what's a home run. And it's like, If my eight years ends in a successful sale, um, like, you know, I, I kind of think of my sale as like a double, you know, as a solid double I got. Um, yeah, I mean, I had a, I had an, an, an amount of money in mind and it was close enough to that number, uh, that it was kind of a no brainer.

AI assessment note: “I had an amount of money in mind and it was close enough”