Andrew Gazdecki on the best way to sell your indie SaaS business

But that's what building a business is. A lot of it isn't sexy. A lot of it's boring. A lot of it's repetitive.

A lot of it's, frankly, a headache. But most of the value that you're going to create is going to come doing the boring stuff. Hello and welcome back to IndieBytes, the podcast of rhyming news stories of fellow indie hackers in 15 minutes or less. Today, I'm joined by Andrew Gazdecky.

He is the founder of Acquire, previously known as MicroAcquire, the largest startup acquisition marketplace. I've spoken to many indie hanks about selling their business, many of whom who have done so using Andrew's platform. Before starting Acquire, Andrew spent eight years bootstrapping business apps with 10 million ARR before being acquired by a private equity firm. Finally, he also wrote a book called Getting Acquired, which tells his story and outlines exactly how you can sell your business.

But before we get into this episode, I do need to thank my sponsor, Email Octopus, who are an email platform focused on affordability with a very generous free plan and ease of use without some of the bloated features that other email apps have. so you can focus on shipping and growing your audience which regular listeners will know is essential for growth in the early days so to get started with an email platform that just gets out of your way where you can contact up to 2,500 people for free head to email octopus.

com or hit the link in the show notes let's get into this episode with andrew gazdecky andrew welcome to the pod how you doing mate what's up james man that was a hell of an intro well done bravo thank you did. Andrew, you've been on so many pods. You share so much information online. You've literally written the book on how you can get acquired.

What are you seeing happening in the startup acquisition ecosystem right now? Anything quite interesting? One thing to me that's been interesting to see, and this probably isn't like a revelation or anything too new, but I am seeing so many different startups just operating extremely lean, really small teams, incredibly profitable. well obviously AI is driving all that I think that's super super interesting and if you compare that to even just two three four years ago it's a completely different world it feels like I see him every single day where it's one founder he's automated marketing he's automated support it's a product like growth tool what's not to love yeah well like sometimes it can feel like there's shortcuts with a lot of the tools and when people are vibe coding building with ai they might not necessarily have a good understanding of some of the technical aspects of the product it's like opened up the ability to create stuff really easily but in terms of like having a product to sell is that like a problem do you see actually i'm not really seeing that just yet i'm i'm waiting for it to happen i'm sure it's going to happen really really soon but let's say something's like vibe coded in a weekend and it just feels like it's completely built on ai those are really hard to sell on acquire like pre-revenue not a lot of traction no users stuff like that like we were talking before we started recording like pre-revenue projects is what we call them that category is is struggling and i think it's because there's just a flood of supply under the market because it's so easy to build these and i think the lesson there is just the hard part still there which is starting a business.

Like you need to market, you need to do sales, you need to spend some time on building the business because as it gets just easier and easier to do everything, I think customers will probably be a little bit more hesitant to use some tools, but we'll see. Yeah, I mean, it's quite appealing for indies where they are seeing some people who can build stuff really quickly, spin it up, sell it for a few grand and then move on to the next thing. And the barrier to do that has been reduced.

so what is the sweet spot for people selling like a bootstrap business that is sort of like the ideal place would you say andrew i'd say a few hundred thousand in revenue i know that's a lot but once you get there you have healthy multiples you have a large amount of buyers typically you're going to be seeing multiple different offers and you have a real business on your hands so you're not essentially desperate to sell it that's not your whole business model it's ideally profitable i I think that's a great spot to be.

Obviously above that millions in revenue would be even better but there is where you going to see you know potentially life acquisition is there like a right time to sell your business because you're saying it might it's better if you get to a few million but if you get to a few million or at that point do you want to chase something even bigger and you've got the other side of it is that when you do sell there's the emotional mental side of the thing you have been working on and built to a couple of hundred grand or even a few million that is then lost and unless you do an earn out but when you're then leaving your company that can be quite hard i think it's a very personal question like one of the most common reasons i see founders looking to sell is they've moved on to something else like they've already started working on another company so they've lost interest they don't wake up and they're super excited to build what they've been working on not necessarily burnout which i think is surprising i do see some of that but i mean it's just it depends on the person sometimes the best time to sell is you build something really valuable and it's time to cash in your chips and you know reap the rewards of what you built but i think it just depends on the person i'm wondering when like founders are starting their business some people are thinking do i like build this to sell am i going to put the groundwork in from day one with the aim to sell this versus some founders who start their project because they're really passionate about solving a particular pain point or they see a growing market and they're going to build something in that market is there a happy medium between like setting the groundwork out when you're starting to build something you're interested in versus literally building something because you think it's going to be a good acquisition yeah i mean i i'm of the belief that it's just it's a good way to build regardless it doesn't take you know too much energy to prepare for these things in advance like one of them would be uh qsbs meaning you want to structure your company as a c corporation so you can hold the stock and the business for five years and then if in five years you find a buyer you could potentially see zero percent tax gains on the first 10 million dollars now when you start the business that may not be your goal but when you get to the five-year point you're going to thank yourself that you at least kept that option open or you might get to the five-year mark and want to keep going and never sell the business other examples would be just having you know good bookkeeping so you understand your numbers and you're able to grow the company faster that's like mandatory to sell your business to have you know clean p&l clean financials easily understood numbers the other one would just be documenting your processes how does support run how does marketing run i think that's just also a good exercise to go through because if you hire someone into the company it's easier for them to get onboarded and then it also could just help you point out things to improve as well like support's a complete mess i can't even understand it when i write it down well that could be an opportunity to fix it and none of this sounds sexy days is it like getting on top of your numbers and it's true like writing your processes but that's what building a business is a lot of it isn't sexy a lot of it's boring a lot of it's repetitive a lot of it's frankly a headache but the most of the value that you're going to create is going to come doing the boring stuff.

Now imagine a founder is in the perfect place. They're ready to sell. They're ready to list. What are some of the things that will make your business shine to a potential acquirer?

And I've also heard that you should maybe potentially start building relationships beforehand with potential acquirers. Or is that the idea of acquire.com that you don't need to do that? Yeah.

I mean, that's great advice. You 100% should do that. We call those strategic buyers. Let's say like Notion or Google is your ideal buyer.

You should absolutely be reaching out to individuals at those companies to try and build relationships. The problem with those types of acquisitions, though, is they're extremely rare. They're the ones you hear about, but they are far from the norm or the average reality for most founders that exit. But when you list on acquire, we bring you to a completely different buyer pool that you normally wouldn't have access to.

Private equity firms individual buyers high net worth family offices stuff like that In terms of preparation really simple things like recording an introductory video going over your finances what does a company do why are you looking to sell it what opportunity is there for growth, like a five minute video of that, which would essentially replace the first call where you're just answering basic questions, that can go a long ways. Other really simple things such as making sure that you have all your docs in order, meaning your P&L, do you have any marketing materials for the business?

is we have this, you know, FAQ that we put together of common questions that most buyers ask. We'll take that. We'll put it into a nice presentation for you filling that out. All of this together probably takes an hour or two at most, but it's what buyers absolutely need to see in order to really take the acquisition seriously.

Now let's get into bootstrapping today, building. You started bootstrappers.com years ago as well. You know what?

I saw you when you were building it when you started it when you bought the domain you were like tech crunch isn't sharing these fun bootstrapped articles anymore it's all vc this vc that so you like put a bunch of money into making this happen i was delighted to log in today and see you're still chugging away with bootstrappers.com are you still doing that for the original reason which is tech crunch weren't covering it is it a good lead gen tool for acquire yeah a little bit of both mainly for the secondary part it's a great way to shine a spotlight on some of these awesome businesses that normally don't get coverage the tech crunch thing was pretty funny though that was more of like a counter position like uh brand and enemy or beef marketing gosh that was like four years ago you have a good memory it was when twitter was good andrew and i was enjoying it i was on every day and there's like a lovely community of people are you still on twitter regularly yeah 100 it's definitely different you can tell the algorithm is different you can tell kind of the content styles are different it's a great place to market your startup if you if you need to find customers you got to just be consistent you have to post every day i think the key for any good social strategy is just finding a way to make it fun you know just post things that you find interesting and that usually will work if you do that for a long period of time so in in terms of bootstrapping today you see all the examples you speak to so many founders if you were to start something from scratch today how would you do it what advice can we give to people who are at that like zero stage they want to build something i would focus on pricing strategy and the customer that you're targeting probably first i think something that would help a lot of founders is don't go after like 10 a month 20 months i would probably try to go 50 a month minimum because the match just becomes too hard it's just you or let's say it's you and another person you need like a thousand customer is paying you $20 a month to make 20,000 a month and then 2000 make 40,000.

I think those numbers are just, they hold a lot of entrepreneurs back where the marketing is really good. Maybe the product is too low in cost, or you're just selling to a customer that doesn't have any budget. And that just makes it, you know, even that much harder. So I would start with a customer that I know has budget.

And then I could price a product at $50 a month. And then if you want to get like more technical there you know trying to keep the customer payback period under 60 days ideally under 30 days meaning you acquire a customer and at the 30-day mark you're profitable so you can quickly reinvest that cash back into the business so that means taking yearly payments up front to be able to recycle that cash back in the business to aggressively spend towards marketing and sales or only relying on organic channels to acquire customers and and you're a pretty good marketer what sort of channels you think people should invest in learn about start using for their for their products i think podcasts just like this one i think every founder should have a podcast now where you make a podcast invite experts from your industry invite customers invite competitors whoever and then use that content share it on socials make short youtube clips that right there i think can be your social strategy your entire content strategy and then also a way to create Proof of performance where you share stories of customers using your product what do they think about it experts in your industry where they can also learn the product on one spot i was expecting some sort of seo paid ads some sort of growth hack reddit content kura whatever not podcast and that makes me happy because i'm a podcast i have my own show but you don't have to have like a massive amount of listeners either it's just the people you get to meet through it.

And then that can fuel the rest of your marketing content. A couple of questions from some people on Twitter. I really like this. What is the most unlikely outcome you've seen in your time in charge?

Anything that comes to mind, Andrew? Let me think about it. I want to give a good answer to this. This is just an interesting acquisition that I'm thinking of right now.

Someone bought a invoicing tool for five or $10,000 like two years ago. And they actually used that as their mvp to start pitching investors with and then went on to raise a bunch of money it was recently valued at like 60 million dollars or something really high what yeah this buyer told me about it we did this in-person conference he wouldn't tell me the exact name of the company yeah but i thought that was pretty impressive thank you amar for that question and charlie's got an interesting question about multiples so my friend charlie runs a community called ramen space big in the london scene he loves directory businesses so he is asking what kinds of businesses have the highest multiples if everything is completely the same it's it's still going to be sass and that's mainly because of the recurring revenue component and the predictability of the revenues but it's really going to come down to growth rate if you're growing extremely fast three four hundred percent year over year you're going to have a you know multiple much higher than the average sas multiple so really you know the quality of revenue and the predictability of the revenue and the growth rate is what's going to drive that multiple it's not so much like it's a sas business so it has to be valued this way it's valued that way because the quality of the revenue and the predictability of it and typically the growth rate too i'm wondering what sort of factors go into finding a business or a business that has a high growth rate like that is it like the pull of the market is there another thing really shit hot team or just a product that is identifying a need that no one else has i think it can be a combination of of everything like new emerging market like repli just showed their growth graph and they were at 10 million in inter-crew revenue last year now they're 100 million dollars in inter-crew revenue in six months for the year so that space is completely on fire so market timing i think is a big aspect of it or just execution like there's been a lot of startups that come into an existing market.

Rippling, I think, is a great example. They came into the HR tech space and they had a really good direct sales motion into companies that are already using software like that. So I think you got to figure out which one are you? Are you a new entrant to a new market?

Are you coming into an existing market with a better product or better go to market motion? But I think timing is always a factor in all of them. Now, Andrew, is it a boring question to ask you what the plan with Acquired is? Is it going to be acquired?

are you just happy carrying on doing what you're doing you know i think for now i'm just i love the company i love what i do i don't know what the future holds but i think for now i'm super happy with where things are going i think also there's a good trend that we're going to be riding which is how easy it is for pretty much anyone to create a business coming up with these different tools that are emerging i think we're seeing some good tailwinds with the company growing so i'd love to see that through well andrew thank you so much for coming on and sharing a bit of your knowledge, wisdom from seeing all these startups and building your own product yourself.

But I do end every episode on three recommendations, a book, a podcast, an indie hacker, entrepreneur, someone you're inspired by. Book, I would say from Impossible to Inevitable by Aaron Ross and Jason Lemkin is a great book. And then for podcast, I would say the All In podcast. I don't know if that one's cool anymore, but I like just the variety of tech and politics.

I don't watch a lot of news, So I think it's kind of interesting. And then entrepreneur, I would say Jack Dorsey. Andrew, thanks so much for coming on the pod. Really appreciate it.

Yeah, thanks for having me on.