Zijad Aganovic

Why Buying Your First Business is the hardest & Financing The Fear is Being seen as too risky by lenders and investors. The Solution: Prepare a solid business plan with detailed financial projections. Work with a financial advisor to enhance your credibility. Consider alternative financing options like SBA loans or seller financing.

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The acquisition game is very different from 10 years ago now that 70% of SaaS acquisitions are led by private equity investors or PE-owned strategic buyers. Most SaaS founders aren't thinking about the new realities of eventually selling their SaaS companies. It's very different than the old days of "sell it for big multiples to a strategic buyer, cash out, and see ya later." Here are 5 questions for founders to consider the new realities of a potential PE-backed exit: 1) Is my company built to keep growing efficiently after I sell it? - Your SaaS metrics need to be healthy. Growing steadily with efficient CAC and solid revenue retention - You need a business that runs without you, the founder. - And you will still be responsible for fixing the problems in your business. 2) Would I invest in the new company with my hard-earned equity or cash? PE buyers don't cash you out of 100% of your equity, just a partial "first bite of the apple" prize. They buy a minority or majority of your company, so you become the major private investor in the acquiring business. This is not an earn-out. You now own shares in a new company that you don't control. You must be confident enough in the new owners, operators, culture, and vision to invest 20-60% of your hard-earned equity in this new venture. 2) Why will this acquisition work to build and sell a much bigger company? Most old-style mergers and acquisitions didn't work for either side. In this new world, founders need to find the right owner/partner with the right strategy and team to ensure their hard-earned equity pays off on their "2nd bite of the apple" when it is sold again. Founders should also do deep due diligence on their acquiring PE investors, not just pitch themselves for "sale" to any takers. 3) Do I trust the new owners and operators to do the right things? Most founders don't stay on as CEOs when they sell to PE buyers. Someone else owns your business (PEs), and they have CEOs who will run the business their way. 90% of founder-CEOs who sell to PE end up as board members with the ability to make suggestions to the new leaders. That's it. You must trust the people and their approach to your business and your precious equity. 4) How will things change now that I'm not the CEO? Maybe you continue running the business as a CEO with new owners for a while, but eventually, you won't be there. Now what? How do you spend your time now that you're only an involved board member? This is very jarring for most former CEOs, so it's worth considering before selling. 5) How will things change now that I have money? The biggest reason to sell a major part of your healthy SaaS business is to take some chips off the table and win a major cash prize. You invested 5-15 years in this business and probably some of your own cash. Now what? Will your life change a little or a lot? It's a whole new world for successful SaaS founders when they sell to PE buyers. #practicalfounders

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Want to build wealth faster? Skip startups. Buy Boring Old Businesses. Here’s why: 1. They’re already making money. 2. They come with customers, systems, and momentum. 3. They’re undervalued – 2.5x profits is standard. 4. SBA loans or seller financing make them accessible. 5. Easy profit boosters: raise prices or add new products. 6. They’re easier to scale than startups. Startups fail 65% of the time within the first 5 years. But "boring" businesses? They’re built to last. Don’t build from scratch. Buy something proven. If you could buy a "boring" business, what type of business would you buy?

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I recently saw this metric from Carta’s 1Q24 VC Fund Report, which is very concerning. DPI... is nowhere to be found in earlier vintages that probably should start showing DPI. Funding early-stage projects is great, but ultimately, these venture dollars need to exit their investments and pay back their limited partners. That’s where the metric Distributed to Paid-In Capital (DPI) comes in. While managing a fund, we get interim measures during the life of the fund (e.g. IRR, MOIC), but ultimately, “you can’t eat IRR.” If you want to build a lasting venture capital organization, you need to start showing DPI for your fund. Keep in mind that this is traditional VC data from Carta, and is not strictly crypto venture. Crypto venture tends to get liquidity earlier (tokens) and things tend to go parabolic sooner (faster, more unicorns) - but I’d wager that the data here is somewhat similar for Crypto VCs… Not as much DPI as there should be from these earlier vintages. Read the full article, as well as a recap of all the crypto fundraising rounds for August, here: https://lnkd.in/g3eVJ-iF

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For AEC focused startups, think about GTM this way. For scale and keeping CAC metrics in line. Bottom Up. PLG for PLG : Product Led Growth for Project Led Growth - User focused marketing - frictionless on boarding - No Sales Function (it’s too expensive) Enterprise: Leverage Project based success to sell to the enterprise. - High Level Solution Sales - Proven ROI Metrics - Make the CFO your champion - Have a well thought out - ABM strategies work well here. Enterprise Solution vs Discounted offering for bulk purchase. Spec to Check: Build generic specifications for your product and work with A/E firms to get them placed. This is for Construction Tech Specific. Owner Influence - Everyone’s ultimate customer. - Brand awareness - Thought Leadership - Building Type Specifc Marketing. We have an entire playbook on this type of stuff. Also what we teach in our stage agnostic incubator.

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Introducing the Growth Model Canvas and an updated Growth Model Spreadsheet template https://buff.ly/4dHoeYG Introducing the Growth Model Canvas along with an updated Growth Model Spreadsheet template for enhanced business strategizing and analysis. This tool provides a structured framework for organizations to map out their growth strategies, track progress, and make informed decisions. By integrating the Growth Model Canvas into your planning process, you can streamline operations and drive sustainable growth. Stay ahead of the competition with this comprehensive toolset. #BusinessStrategy #GrowthModeling

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Unlike vertical SaaS, I’m not convinced we will have vertical AI. If we do, it will be in the short term. Example- Legal AI tools may just become native in MS Word or Adobe. I would like a to hear some thoughts on this.

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🧪 CRO Case Study Episode 54 One A/B test → 930K plus revenue 🚀 Swipe to learn how one A/B test added over $930K to our client's annual revenue. The Results Breakdown: +$77,558 per month +$930,696 per year (forecasted) +$0.58 revenue per session Bookmark this!

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Whether you're dipping your toes into SaaS acquisitions or looking to expand, understanding the diverse buyer profiles is key. Here's a quick rundown of SaaS acquirers by purchase price to identify where you fit and how to strategize: // <$250k: Side Hustlers: Look for low-maintenance, simple products. Ideal businesses demand <20 hours weekly and minimal support. // <$500k: First-Time Acquirers: With a technical/GTM background, focus on businesses matching your skills, requiring less than $500k capital. // $500k-$1M: Professional Portfolio Acquirers: Experienced? Aim for stable, recurring revenue businesses, managing 5-10 companies with 15-30% EBITDA margins. Serial Acquirers & Niche Specialists: Quick scalability or niche alignment is key, targeting businesses for growth and a perfect fit. // Over $1M: Corporate Integrators & Small Financial Sponsors: Major players seek strategic alignment, investing $3M-$10M for a 20-30% ROI. /Industry Consolidators & Strategic Diversifiers: Focus on efficiencies, market dominance, or diversifying through innovative models. A Reminder: Micro SaaS is a unique field — untouched by Institutional Private Equity and Strategics below $5M ARR, presenting a lucrative avenue for those ready to play smart. Which profile resonates with you? Whether you're aiming to buy, grow, or sell, positioning yourself correctly in the Micro SaaS universe is crucial. 👉 For a deeper dive into each buyer profile and strategic insights tailored to your journey, connect with us at Skaling Ventures. Link to substance in bio... #MicroSaaS #SaaSAcquisitions #StartupGrowth #SkalingVentures

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Market inefficiencies across the small business acquisition process have a dual impact on the search ecosystem. On one hand, an overly inefficient market can hamper transaction volume, as the challenges and costs related to sourcing and closing a transaction may outweigh the expected benefits. On the flip side, a market that is too efficient can erode the competitive advantages searchers have over institutionally backed financial sponsors. To unpack this a bit further, part of the reason the Stanford Search Study continues to report 30%+ IRRs across traditional search is due to traditional searchers’ ability to capitalize on the inefficiencies that fortify searchers from competition by larger, better capitalized acquirers. One example of this dynamic is the robust, and often focused, deal sourcing processes traditional searchers conduct in order to find ONE business to acquire. Based on my pulse, self-funded searchers are also investing more in deal sourcing and we’re seeing a greater number of self-funded acquisitions sourced through a proprietary process. Market inefficiencies create an environment where searchers can acquire small businesses at lower multiples if they put in the effort. However, if the inefficiencies are too extreme, entrepreneurial acquisitions can be too challenging and costly, ultimately deterring many searchers that might perform well under other market conditions.

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I have been seeing a lot of AI-enabled products with sub $300k in ARR but 75-100x revenue valuation multiples. Obviously there is a lot of promise for many of these tools, but a question I keep wondering about is which line item in a prospective buyer's budget many of these software licenses is going to come from and if revenue growth is going to be a lot slower than valuation because buyers haven't yet adjusted their FP & A process to include allocation for AI tools that don't neatly fit in any historic software category. Tricky question. TIA Ventures

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Trying to improve all aspects of sales velocity at once? That’s a recipe for lukewarm results. Instead, prioritize and sequence improvements for maximum ROI. Start with high-impact, low-effort changes like qualifying leads with AI, then layer in more complex initiatives like programmatic expansion. Here’s a step-by-step playbook to get started: https://lnkd.in/gnXZUddD #SalesVelocity #GrowthStrategy #Prioritization"

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Nothing wrong with buying growth, just remember what happens when growth suddenly decelerates (especially if you paid a high price for a bright future) "The definition of what “high growth” is continues to be redefined across Software. As can be seen in the chart below across the 105 Software companies we track, we’re now at the 𝗹𝗼𝘄𝗲𝘀𝘁 % 𝗼𝗳 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗴𝗿𝗼𝘄𝗶𝗻𝗴 +𝟯𝟬% 𝗲𝘃𝗲𝗿 (based on consensus NTM revenue estimates). 𝗠𝗲𝗱𝗶𝗮𝗻 𝗡𝗧𝗠 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 𝗲𝘀𝘁𝗶𝗺𝗮𝘁𝗲𝘀 𝗮𝗿𝗲 𝗮𝗹𝘀𝗼 𝗻𝗲𝗮𝗿 𝗮𝗹𝗹-𝘁𝗶𝗺𝗲 𝗹𝗼𝘄𝘀 𝗮𝘁 ~𝟭𝟭%, 𝗯𝗮𝘀𝗶𝗰𝗮𝗹𝗹𝘆 𝟱𝟬% 𝗼𝗳 𝘄𝗵𝗮𝘁 𝘁𝗵𝗲𝘆 𝘄𝗲𝗿𝗲 𝗶𝗻 𝗤𝟰 𝟮𝟬𝟮𝟭"

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What excites PAR Technology the most is their ongoing mission to enhance and elevate the customer experience across the board. They’ve been focused on ensuring that all of their products are designed to seamlessly integrate, creating a cohesive ecosystem for their clients. Data plays a pivotal role in their strategy—PAR is committed to not only providing easy access to data but also offering valuable insights and actionable breakdowns that help businesses make informed decisions. This approach underpins their dedication to innovation and operational excellence. Branded Hospitality Ventures #POS #Technology #Hospitality #Marketing Hospitality Hangout Podcast Keith Pascal Tori D. Savneet Singh Dan Costello Ben Carroll Jeff Carpenter Joe Yetter Shane Gau Steven Downer Joshua Tuokkola Paul Rubin Karl Ruter

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Our Micro SaaS portfolio company just hit ARR / FTE productivity rivaling $50M SaaS firms. Here are 4 lessons we learned along the way: Focus on operating leverage, not just revenue growth. EBITDA/FTE is an excellent scoreboard. Lean teams move faster and punch harder. Return on effort matters more than chasing scale or deal size. Where have you most recently created operating leverage in your business? #ARR #MicroSaaS #BusinessEfficiency

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For a young software company, what does a dream end-market look like? A few great signals off the top of my head: ▶️ Low NPS of incumbent solutions ▶️ Lots of manual / lightly-digitized processes ▶️ Many buyers (i.e. top 3 don't control the market) ▶️ High ability to pay (decent margins and trendlines) What else should be on the short list???

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Placer.ai, a startup in AI market research using location data, has raised $75M, bringing its valuation to $1.45B. This follows a previous $100M Series C at a $1B valuation. Key Highlights: - Key Investors: GEM Realty Capital, Josh Buckley, WndrCo, Lachy Groom, MMC Ventures, Fifth Wall Ventures, and more. - Revenue Growth: Crossed $100M annual revenue run rate, with an 80% growth last year. - Customer Base: Over 4,300, including Sony, Wegmans, and Century 21. Placer.ai uses location-based analytics across retail, real estate, financial services, and other sectors. The latest investment will be used for business development and platform enhancements. For the latest secondary coverage and trading SaxonWeber | ShareWell #secondaries #saxonweber

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Hey Founders! Not all sales go as planned, in fact many go off track, even after the signed LOI and with parties on both sides aligned. Dealing with hiccups 😬 is as much a part of the process as getting in sync on price, terms, and timeline to closing. So, when a "busted process" happens, or terminated LOI leads to a need to re-engage other buyers, what's the right play? In our experience it happens more with independent PE firms and #searchfunds, but it happens with big firms and strategic buyers too. Give us a few minutes and we'll give you some ideas to get things back on track. Might make or save you $Millions! Maybe more!!

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The #1 Factor to Determine Max Valuation in Micro SaaS...is debt financing. Here's why, plus a free valuation calculator... Most buyers in the $500,000 to $2 million valuation range use SBA loans, which come with specific requirements. The SBA requires a Debt Service Coverage Ratio (DSCR) of 1.25, meaning the company needs $1.25 of income for every $1 of debt payments. In simpler terms, the key question is: Can the business afford itself? Does the Micro SaaS firm generate enough income to cover the loan needed to buy the business? As the valuation rises, so do the loan and debt payments. At some point, the valuation requires a loan that breaks the DSCR requirements. The upper limit of a Micro SaaS valuation is ultimately determined by the maximum loan a buyer can secure based on the company's income. Here's a simple calculator to illustrate this concept, helping us all determine valuation more accurately based on the real world 👇 #microsaas #acquisitionentrepreneur #saasgrowth

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