Opinion
Hauser: Citrix "way overpaid" when it acquired Grasshopper
“We built a great company, but someone way overpaid for it, Citrix.”
Insight
Hauser: Startups should only use venture debt for proven marketing channels
“My number one takeaway on that is only use it for Things you know are working. Marketing channels you know are working. It's not for testing. It's not for hiring. It's not for growing product. It's none of those things. It is, I know that if I spend a dollar h…”
Insight
Hauser: Scaling past $10M revenue requires transitioning to autonomous thinkers
“So from one to ten million dollars in revenue, you can have a lot of doers on the team, which means, hey, do this, come back, do this, come back. To get from 10 to 20, you need a lot of thinkers, which is people that come to you and say, David, Here's what I'm…”
Insight
Hauser: Market trajectory matters far more than total addressable market size
“Addressable market is really one that's interesting to me because a lot of people think about size of addressable market. And I think quite honestly, that doesn't matter for most of us in the room, right? Unless you're doing hundreds of millions of dollars, th…”
Insight
Hauser: Maximize acquisition value by leaving unoptimized growth for the buyer
“Leave some meat on the bone. If you want to get the most value for the company, you don't want to have optimized the shit out of everything, right? Because then the acquirer is like, well, I can't really do much with it. And the only acquirers that are left th…”
Insight
Hauser: Top-line synergies drive the highest M&A valuation multiples
“The least valuable from an acquisition standpoint is cost savings. Right. I buy this company. I get cost savings, least valuable. The next kind of down that line is I buy this company to speed up my market development. And then the most valuable is I increase …”
Opinion
Hauser: Acquirers and VCs value services revenue close to zero
“You will definitely get nowhere close to the value on the services. Right. And we went through this at vanilla when we were talking to VCs. They're like, listen, like 40% of the businesses services, not SAS. We value it at zero. Right. In, in, in the fundraisi…”
Assertion Supported
Hauser: Grasshopper bootstrapped to $30M revenue before $175M Citrix acquisition
“We did build Grasshopper, bootstrapped it a hundred percent built it from zero to thirty million dollars a year in revenue before we sold it, and ultimately sold it to Citrix for a hundred and seventy-five million dollars in total.”
Disclosure
Hauser: Grasshopper founders secured no earnout and left immediately after selling
“When we sold the company, we left the next day, me and my partner. Right. So there was no earn out. There was no time we had to spend there, nothing else.”
Insight
Hauser: Small acquisitions are riskier because high revenue cushions operational mistakes
“So revenue, the higher the revenue, more importantly, and it's not just because it's the number, it's because it gives us cushion, right? It means if we make mistakes after we acquire things, we have more chances to make another mistake to correct it or kind o…”
Assertion Not checkable as stated
Hauser: Citrix paid more upfront cash because founders had already stepped back
“They actually paid more because they didn't have to find expensive positions for me and my co-founder to be in and stupid titles, right? So they paid more cash upfront to not deal with that.”
Insight
Hauser: Radio advertising drives customer orders for weeks after campaigns end
“The most important thing to understand is the way radio advertising works and why it's successful is because of the long tail. So when you run ads, when you stop running ads, For three to six weeks after you stop running ads, you still get orders in the DMAs t…”
Assertion Not checkable as stated
Hauser: Grasshopper spent $12.5M on radio advertising
“And the later years we spent 12 and a half million dollars on radio, right?”
Disclosure
Hauser: Grasshopper secured $15M SVB debt at 12.5% with no warrants
“We used SVB because there were very few options at the time for us. We were also at a revenue kind of point that they allowed for that. These were roughly the terms. I think it was actually 12 and a half percent interest. So it wasn't cheap, but there was no w…”
Assertion Supported
Hauser: Grasshopper's $175M sale nearly collapsed due to a Citrix activist
“Six weeks later, after we closed that deal, an activist investor told Citrix they had to sell off all of their SaaS business. So we were weeks away from the deal not going through, right? Not because of something we did, not because of something Citrix did, an…”
