Buying and Selling Startups on MicroAcquire - Andrew Gazdecki, Founder - Replay

Inside Outside Innovation

On this week's episode of Inside Outside Innovation, we sit down with Andrew Gazdecki, Founder of MicroAcquire and Author of the new book Getting Acquired: How I Built and Sold My SaaS Startup. Andrew, and I talk about his entrepreneurial journey building MicroAcquire, and some of the insights he's seeing when it comes to buying and selling startups.

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Interview Transcript with Andrew Gazdecki, Founder of MicroAcquire

Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I'm your host, Brian Ardinger. And as always, we have another amazing guest. Today, we have Andrew Gazdecki who is the founder of MicroAcquire. And Author of the new book Getting Acquired: How I Built and Sold My SaaS Startup. Welcome Andrew.

Andrew Gazdecki: Thanks so much for having me, Brian. I'm excited.

Brian Ardinger: I've got my MicroAcquire socks on. So, thank you for that. I'm super excited to have you on to talk about the craziness that is the startup world. And you've had a front row seat for a number of years as a multi-founder. And now with MicroAcquire, let's talk about what MicroAcquire is and how you got into the business of helping startups sell to other folks.

Andrew Gazdecki: MicroAcquire, for those who aren't familiar with it, is the largest startup acquisition marketplace in the world today. We have about 150,000 buyers registered. We've helped over six hundred startups to get acquired that combined acquisition total is 400 million at this point. Almost half a billion. We don't charge any fees. So, you can sell your business on MicroAcquire completely free.

So, I started that business, candidly, as a side project. I just felt that needed to exist. I'd previously gone through two acquisitions, and it was just a mess. Everything from finding the buyers to, there's so much education today on how to grow your business. How to learn sales. How to recruit. And how to fundraise. But then there's nothing on the exit. Which is arguably the most important part of the founder's journey.

And when I sold my first business, which we can talk about, if you'd like, it was a business called Business Apps. Spelled BiznessApps, and kind of the light bulb moment went on when I sold it. I just got a ton of emails and texts from friends that we're also running startups and they were like, how'd you get acquired?

Like, how did you find the buyer? What was the process like? It was like hieroglyphics everyone. Including myself when I went through the process. So, what we're really trying to do at MicroAcquire is democratize startup acquisitions and just make the process easier and more transparent for founders. And also, buyers.

Brian Ardinger: So, talk a little bit about the types of startups that are being bought and sold on the platform. And how has that maybe changed since when you first launched?

Andrew Gazdecki: Well, when we first launched, lots of small startups, you know ranging from, we would sell business, and we still do today, but 5k startups, mostly side projects. And since then, we've really expanded, I guess, up market. So, our largest acquisition is just under $10 million.

We have buyers on the platform now that can facilitate acquisitions in the hundreds of millions if the value is there. Yeah, just started with humble beginnings just because I felt this was something that was so needed for the startup ecosystem. Because the other routes to sell your business, unless you're most founders think like Google shows up with a check and hey, you did it. Like you won the lottery.

There's this saying most startups are bought, not sold and that's just not true. You know, you really need to sell your business. And so, the other routes were expensive, borderline highway robbery, and that's, that was really kind of like the main purpose of me launching MicroAcquire to really give another option for founders of this other business.

And if you're curious about the other options, you can hire an investment banker. They're going to charge a big fee. If your startup is too small for an investment bank, because most investment banks will only work with you if your business is of a certain size. And you know, maybe you can get like eight, nine figure exit. And I had previously worked with an investment bank. And their minimum fee was $800,000 for a successful transaction.

The short story there, we got a few offers, but the fee was just, I still had gas in the tank, so I kept going. But it showed me, and I remember telling the bankers, I was like, you guys have the coolest job in the world. I do all this work. And then at the end, you come in and get, you know, a nice payday. So that always kind of stuck with me.

And then I stumbled on to business brokers. Business brokers, if your business is doing let's say less than you know 5 million in revenue. You can work with a business broker. They will typically charge 10 to 15% commission to sell your business. So, 10% to 15%. So that's like a small angel round. So, I just saw it. Okay. Business brokers don't do too much. You know, what would happen if we removed the middleman? And we let buyers and sellers connect directly.

And we help businesses ranging from SaaS companies. That's kind of our sole focus. But we also sell a lot of e-commerce businesses. Communities. Some crypto companies. Direct to consumer. Newsletters. We like to say, we want to be the marketplace for profitable startups. So that's mainly our focus is startups that have traction.

So, we don't list startups that are pre revenue. Content websites. Affiliate websites. Again, mostly focusing on businesses that have, you know, a lot of growth upside. Having a blast running it at the same time, too.

Brian Ardinger: I'm hearing more and more about people using the platform, startup founders, maybe looking to buy a side project or a side hustle versus building something from scratch. Are you seeing that trend happening?

Andrew Gazdecki: Yeah. Like one story that comes to mind is, there's builders and there's scalers. Where a lot of people love to build a business. They love to think of a new idea and bring something to life. And I think fallen, in both those buckets. Builders and scalers. And so people build these wonderful businesses, but they maybe build it to a certain point where they'd like to move on to something else.

Maybe they built it to a few million in revenue and now they're, you know, mostly managing. When they'd really like to be building. And so MicroAcquire is a great outlet for them to meet buyers within like hours. Like the fastest acquisition on my group, where I was within, quite literally hours. Those are obviously outliers.

Brian Ardinger: What are you seeing when it comes to valuation trends and things along those lines? How's the mar...