The Ledger
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Miller: Ad Returns Dropped 50% After TZP Outsourced PPC
“And so their returns on the advertising Went from what they were to half of what they used to be.”
SVB Refused to Lend to Miller Because He Lacked VC Backers
“They were one of our banks, but they never lent us money. We flowed all our credit cards through them. And, ah, they would come to us all the time and ask if we wanted to borrow money from them. We'd say, sure. And, you know, we were the only company they had …”
Miller: Post-exit, Awareness Technologies' revenue will halve to $10M in 2022
“The business will do ten million in revenue this year.”
Miller: Awareness Technologies' new owners defaulted on debt payments in 2022
“They haven't made a bank payment or an interest payment since March, and they might not for quite a while.”
Bootstrapped Proptech Beat Chicago Rivals Who Raised $80M in Venture Capital
“Had a hundred buildings in Chicago, and all the other competitors had raised 20 to eighty million dollars, and they were all based in Chicago, too, but he had the number one market share, and I'm like, how, how is that possible that in their backyard, you're k…”
Miller: PE Firms Would Rather 'Burn in Hell' Than Admit Mistakes
“I can guarantee you that was the last thing. They would rather burn in hell hanging by their, you know, by their ankles than they would come back and say, I screwed up.”
Miller: Acquired competitor Variato for $3.5M after initial $19M valuation
“We started a negotiation where we were going to pay them. Nineteen million dollars on it. Then they were doing twelve million of revenue. But by the time we close the deal, they were on a Eight million dollar run rate, and they had run out of money, and they c…”
Miller: Investors injected another $3M into Awareness Technologies
“The VC has put in another three million bucks to fund, so it's not only not making six, they're actually losing money”
SVB Refused to Lend Without VC Backing Despite Strong Cash Flow
“SVB wouldn't touch us because we didn't have, like, a traditional VC in the deal. They would rather fund a company that's losing money with a brand name VC than, you know, they don't do cash flow lending.”
Miller: Unmonitored departing employees often steal client lists and pricing data
“When I go to find my next job, chances are I will pull off a client list and all the information about what they have, how much they pay, when they're up for renewal and that would be devastating to a company if their employees, when they left to go to a compe…”
Miller's Acquired SaaS Shrank From $20M to $12M Under PE Ownership
“The company two years later is half its size. It was at the time when I sold it doing twenty million in, in revenue and six in profit, and I believe it's like 12 and Two. Something along those lines.”
Miller: SaaS acquisitions should break even immediately on customer acquisition
“It's a reasonable question, but we looked at it as we wanted, we had an immediate sale, and if we could make it, if we spent a dollar, can make a dollar, then we knew that all renewals were profit after that. So we didn't have to invest any money. If we could …”
Miller: Grew $3M Majority Proptech Buyout to $7M in Revenue
“So I bought 51% for three million. And now the business is doing seven million.”
Brad Miller: Outstanding debt did not affect SaaS company exit
“It did not at all. They just viewed it as an enterprise value and, you know, whether they wrote the check to me or the bank didn't matter to them.”
Bank Denied Miller a $10M Loan but Happily Approved His Acquirer
“When I went and asked them for ten million, they laughed at me, but when the new buyer, they, but they could get comfortable with five or six, but when the new buyer came in and said, we want ten million, they had no problem”
Miller: Converting Awareness Tech to SaaS added $2M profit overnight
“And so we converted the business
From a one-time payment to a subscription, and that added two million dollars of revenue overnight.
So it went from five million to seven million, and as all that revenue was profit, the business went from losing a million to m…”
Miller: Turned down 10% of Quest Bar before its $1B exit
“So to shut me up, they offered me 10% in their new venture, which was a protein bar company.
Don't ask me why.
they were bodybuilders.
And I was like, I, the world does not need another protein bar company that they later sold it for a billion dollars.”
Miller: Awareness Tech exited for $35M in 2020 after turnaround
“They went from losing money to making two million dollars, and so we were before we bought them, we were you know, a twelve million dollar business making four at this point, and they added they were eight and two now, and so now we were 26, and then we said, …”
Awareness Tech Founders Used Sale Proceeds to Start Quest Nutrition
“The founders, I may have told you this, went on to take that money and start a billion dollar company called Quest Nutrition.”
Switching Awareness Tech to Subscriptions Turned $1M Loss Into $1M Profit
“And but the business when I bought it was doing, you know, sort of five Five million losing a million. And even though it was structured as a SAS cloud delivery model, they were only charging a one time fee, though providing service and cloud forever. And so t…”
VC-Backed Competitor Collapsed to $3M Loss Before Brad Miller Acquired It
“Two VCs bought it for forty-five million, and they And the business went from doing fifteen million making six to doing seven million losing three when we bought it.”
Brad Miller Closed Competitor Acquisition in Three Weeks to Save Payroll
“And so we did a deal literally in three weeks because they weren't going to meet payroll.”
Brad Miller Bought Distressed Competitor for Zero Cash Upfront
“We were able to basically buy it by taking over that two million dollar line of credit, and then pay the investment banker fees and lawyer fees that they couldn't afford to pay because there was no cash changing hands.”
Brad Miller's Total Exit and Dividends Reached Nearly $50 Million
“The combination of the dividends and the price was just shy of 50, of just shy of fifty million.”
Miller: Most high-damage security incidents are caused by internal employees
“While most of the problems that exist are created by external people, most of the problems that cause a lot of damage are done by internal people”
Miller: TZP Group Acquired His SaaS Business
“It was a New York-based private equity fund called TZP.”
Miller: Converting SaaS Perpetual Model to Renewals Boosted Revenue 40% Overnight
“So the first thing we did is we turned it into a, you know, we made it a renewal, a subscription model, and the revenue increased 40% overnight.”
Subscription Shift Swung Miller's SaaS From -$1M to +$1M Profit
“And the business was losing money day one, but because of the renewals within a year, it went from losing a million to making a million literally overnight just by that one element.”
Miller: Bought $3M ARR Proptech Startup at $6M Valuation in Mid-2021
“It was doing about three million. I bought it at a six million pre, you know, pre-money value.”
Miller: Traditional Bank Debt Typically Sized at Two to Three Times EBITDA
“The basic bank debt was very plain vanilla. There were no warrants. It was purely a multiple of EBITDA, typically. Two to three times depending.”
Miller: Mezzanine Debt Requires 10% to 12% Coupon Plus Equity Kickers
“That was typically 10 to 12% coupon with a pick, so with a kicker, which could either be in the form of a pick, an accreting pick, or it could be in the form of warrants.”
Brad Miller: Bank Capped Initial Acquisition Debt at $1M on $6M Deal
“This company was losing money, so the bank wasn't interested in giving us a big debt check, so they were comfortable giving us a million, even though it was losing money and so we had to fill in the rest, which was another five.”
Miller: Awareness Tech acquisition funded with $5.5M equity and $1M debt
“Well, five and a half million myself and a financial partner split at fifty-fifty, and we did a little bit of bank debt on top of that.
a million bucks of bank debt to fund, you know, the purchase price and some other expenses and all that kind of stuff.”
Miller: Awareness Tech distributed $12M in dividends prior to exit
“Well, it was total of 12, so there was one million for a couple of years, and then it grew to three, then grew to six, but yes.
Correct.
Yeah, we took out double what we put in before we sold it.”
Miller: Parental app target doubled to $100K MRR during M&A negotiations
“They were doing 50,000 a month when we were negotiating. And the, by the time we closed it, five months later, it was doing a 100,000.”
Miller: Variato Sold to VCs for $45M at $15M Revenue, $6M Profit
“I got outbid heavily because they got sold for forty five million to Two VCs. And it was a nice, you know, business doing fifteen million of revenue, making six million of profit.”
Brad Miller and Partner Acquired Awareness Tech for $5.5M
“No, they were we were 50, 50 equity partners. We each put up 2.75 million. We, you know, we put up five and a half million.”
Awareness Technologies Hit $20M Revenue and $6M EBITDA in 2020
“The business grew from seven million, well, I guess five to seven, and then and then and then to 20, you know, last year we did twenty million making six.”
Awareness Technologies Distributed $12.5M in Dividends Under Brad Miller
“We had also taken out 12 and a half million of dividends along the way.”
Miller acquired Awareness Technologies at $10M valuation on $4M-$5M revenue
“Well at the time we probably you know, valued it at about ten million. It was doing about four or five million in revenue.”
Renewals now account for 50% of Awareness Technologies' revenue
“We saw an opportunity to change that model, which we did, and very, you know, very quickly, and now renewals makes up, you know, at, you know, 50% of the revenue”
Awareness Technologies generates approximately 75% of its revenue from consumers
“Probably 75, 25, consumer.”
Awareness Technologies operates at a net profit margin of over 30%
“We were profitable. We were very profitable. We're, you know, we're dropping 30 plus percent to the bottom line.”
Awareness Technologies acquired a UK business for over $3M
“When we bought the company in the UK we bought it for a little over three million, and we already had a million of debt at the time.”
Awareness Technologies achieves 80% annual retention in its B2B segment
“And there, you know, the churn is, you know, our retention is, you know, like 80%.”