The Exchanges

Q kind of exit instead of luxury goods, it's, it's, it's digital assets and insights businesses. But what did you see in the space at the time? I mean, again, you're sitting on a great cushy thing. I assume it's going well. You have to have real conviction around that vision to jump out and start leading Flippa full time. What did you see in the M&A marketplace back in 2018?

A I think there's really, uh, one thing for me and then one thing that relates to the macro environment. The thing for me was that Uh, I'm based here in Australia. Flip is a technology company. It's a global technology company. It's bootstrapped. It's profitable. It's organically grown. And that's a, that's a rare thing to find, um, in the Australian market of business, which is truly global. So that was the thing which appealed to me. Uh, as it relates to the macro environment, there is clearly, uh, huge amounts of growth in the small business digital sector. And the small business digital sector has been Uh, one that you and I are very familiar with, but the mainstream, uh, community has taken some time to jump on the back of. And so with platforms like Amazon and Google and, uh, Shopify and BigCommerce and Recurly and any other platform that enables a digital asset owner to scale, there is a fundamental paradigm shift in the opportunities for those businesses, and that, that struck a chord with me.

AI assessment note: “there is clearly, uh, huge amounts of growth in the small business digital sector.”

Q How do you, how do buyers get comfortable with that? Like how, you know, it's, it's a whole combination of the buyer going, well, what would I actually need that expense? Would I have to go replace that developer with somebody else? How do they get comfortable with how that SDA is SDA is calculated?

A Yeah, I think it's critically, it's about, is it, can the buyer imagine that that expense that has been removed is a one-time expense that is non-carry forward? And that's a, that's a really important distinction, and therefore the discussion has to happen with the current owner. Uh, I see that you have removed these expenses. Could you tell me a little bit more about those expenses? And then the buyer needs to make a judgment call As to whether those expenses should have been included in the cost base, or whether it is fair and reasonable to remove those because they are non-carry forward. But you're absolutely right. The buyer, ah, does need to be comfortable with that, and that can sometimes take some time and some digging.

AI assessment note: “can the buyer imagine that that expense that has been removed is a one-time expense”