Ryan Buckley, former CEO of MightySignal, discusses the return expectations and exit strategy of private equity firm Xenon Ventures.
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“Their thesis is to get at least three to four X out. So we want to then sell for a multiple three to four revenue or at least acquisition costs like what they bought it for.”
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More from Ryan Buckley
Opinion
Ryan Buckley: Content marketing has become a race to the bottom
“Content marketing seems to be like a race to the bottom now.”
Ryan BuckleyJul 14, 2022▶ 1:08Flip Your SaaS Playbook: PE firm Acquires $1m ARR MightlySignal for .5-1.5x, Sold 24 months later for $4.5m.
Disclosure
Ryan Buckley: Texas PE buyer halted payments on Toofr sale
“I sold it to a another private equity firm in Texas. That relationship kind of went south and they've been a bit litigious. So I won't say exactly who they are, but just the very high level thing that, that kind of went, went south was they were on sort of a p…”
Ryan BuckleyJul 14, 2022▶ 8:27Flip Your SaaS Playbook: PE firm Acquires $1m ARR MightlySignal for .5-1.5x, Sold 24 months later for $4.5m.
Disclosure
Ryan Buckley: Xenon structures general manager shadow equity as side letters
“And shadow equity also means that they so, you know, Xenon doesn't want to write GMs into the cap table. It's just it's just overhead, just kind of hassle. So it's essentially, it's a side letter that says if, and when there's a liquidity event, you get X perc…”
Ryan BuckleyJul 14, 2022▶ 9:29Flip Your SaaS Playbook: PE firm Acquires $1m ARR MightlySignal for .5-1.5x, Sold 24 months later for $4.5m.
Opinion
Ryan Buckley: MightySignal was a single feature, not a standalone company
“It's essentially a feature versus a platform and mighty signal very much like really good at the single feature about what it does, breaking apart apps, looking for SDKs, tracking it in a database. It's not really a full blown company. It's just, there's just …”
Ryan BuckleyJul 14, 2022▶ 10:53Flip Your SaaS Playbook: PE firm Acquires $1m ARR MightlySignal for .5-1.5x, Sold 24 months later for $4.5m.
Insight
Ryan Buckley: Sellers accepting private stock should demand mandatory liquidity terms
“If there is stock and it's a private business, you want to essentially have warrants that would Force the buying entity to essentially cash out your stock in a certain amount of time if they don't go public or something like that.”
Ryan BuckleyJul 14, 2022▶ 13:24Flip Your SaaS Playbook: PE firm Acquires $1m ARR MightlySignal for .5-1.5x, Sold 24 months later for $4.5m.
AssertionPartly supported
Ryan Buckley: MightySignal had $1M ARR and zero employees upon acquisition
“No, they're actually none. So he bought the business. The whole team was acqui-hired by Instacart. And so he handed me a business that was doing a million ARR with no team.”
Ryan BuckleyJul 14, 2022▶ 3:21Flip Your SaaS Playbook: PE firm Acquires $1m ARR MightlySignal for .5-1.5x, Sold 24 months later for $4.5m.
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