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16: Selling GatherUp - Part 1, The Why
Helpful links from the episode:
- Official Press Release from Alpine Software Group (ASG)
- Acquisition announcement and interview on Search Engine Land
- Alpine Software Group
FULL SHOW NOTES
[ INTRO music]
00:09 Aaron Weiche: Episode 16: Selling GatherUp - Part 1, The Why.
00:16 INTRO: Welcome to the SaaS Venture podcast, sharing the adventure of leading and growing a bootstrap SaaS company. Hear the experiences, challenges, wins, and losses shared in each episode. From Aaron Weiche of GatherUp and Darren Shaw of Whitespark. Let's go.
00:41 AW: Welcome to the SaaS Venture, I'm Aaron.
00:44 Darren Shaw: And I'm Darren.
00:45 AW: And we are back in the year of 2020 after finishing off 2019 and catching a little bit of downtime. I know I probably got even more than I normally would with Christmas on a Wednesday, New Year's Day on a Wednesday. It was a nice slow two weeks for me. How about you, Darren?
01:06 DS: Super slow. I touched in a little bit here and there, but I mostly took like a full solid two weeks off over Christmas up until January 2nd, so that was nice. Good little break, spent some time with family, get my mind off work for a while.
01:19 AW: It's one of those great... Like you can count on being able to recharge at the end of the year, because everyone wants to do the same thing.
01:27 DS: Yeah.
[chuckle]
01:28 AW: So, email is quiet, phone is quiet, text is quiet.
01:32 DS: Wonderful.
01:33 AW: I still look forward to it in the last couple of days where it's just like you gotta start getting your mind back in the game and ready to roll, and launch the new year off to a fast start.
01:42 DS: Yeah, it took me about a week to ramp up, too. I felt like my first week back, I was a bit sluggish, not firing on all cylinders, but I don't know, back in it now, got lots to do, I'm trying to time block and plan my week, and plan my day, and really get as much done as possible. So, I'm feeling productive now.
02:00 AW: You're ready to be the most efficient you for 2020.
02:02 DS: Exactly.
02:02 AW: Alright, so as we had teased at in our last episode to close out the year, the big news on my side of things is we announced, I think the public announcement was November 14th from our press release, but as of November 1st, 2019 GatherUp was acquired.
02:22 DS: It's huge.
02:23 AW: Yeah, big news. The finish line you're gunning for, and, yeah, a million different thoughts. And as you and I talked about how best to talk about this, and share things, and just try to put as much out there, I really felt like at least two, and I think we've arrived at now, we're probably gonna do three episodes on this, because there is so much ground to cover.
02:49 DS: For sure.
02:50 AW: So, and looking at this today, we wanna focus on kind of the why, and almost some of this is pre-sale, and then early once you get an offer, and things like that. And the second episode, we will look at what are all those pieces of that 90-day or 120-day window, whatever the deal timeline looks like, and how all that works out and what to expect, at least what I saw in our scenario and things like that. And then doing the third part on post-transaction, 'cause when everything closes, and especially in our case where I stayed on as CEO, one of our other founders, Mike Blumenthal stayed on, and then basically our entire staff stayed on. You just have a ton of logistics work around press releases and customer communication, and internal things, and employees, and so many other things that that post-sale transition, if you are staying on with whose ever purchased you, boys, it's its own episode. There is a laundry list of things. So...
03:57 DS: Yeah, I'm really interested in that process, like all the different moving parts, and how you have to answer to different people now, and how do your meetings go, and how often do you talk to them, and what kind of say do they have. So I'm looking forward to discussing that in part three.
04:09 AW: So before we get all the way to that, we have to get a part one done first. And maybe one of the first things that I can probably offer up that a lot of people have asked me is just like, "Were you guys always looking to sell?" And the answer from that is, yes, that was always part of starting a SaaS company, we were both doing something that we loved, but we also wanted to get it to a certain point and really looked at a sale, at a successful acquisition as being what we wanted to achieve. A time where we could take money off the table and also look at the company having its next phase with some different parameters on it.
So, that's one thing I've been asked in general a lot and the answer is absolutely. It wasn't like, "Oh, yeah, we didn't know this was possible," or, "never thought about it." Like we definitely had talks over the years on: Are we tracking the right way? Are we valuable? Who might buy us? All of those kind of things with it.
05:15 DS: Yeah, that's interesting, 'cause like, I mean, my company was never sort of... That wasn't a thought when I started my company, it's kind of just evolved into a company that is a potential acquisition target for some of these companies. And so, I'm looking at it now more thinking about that as a potential exit and thinking about all the things I would need to have in place for that if I did decide to sell, but it's not necessarily the end goal for me. Like I will continue to grow the company, but let's say the company is doing $50 million a year in revenue, and I'm happy, and things are going well, and I have good leadership that's running things, it's like, "Well, maybe I don't sell," right? So, it's one of the things that I kind of bat back and forth, I keep looking at it from multiple perspectives, and I guess we'll see as we grow.
06:00 AW: We had a plan B, like that that we brought to the table that we're like, "Listen, if we reach this level of revenue and this level of profit margin, then maybe our best move at that stage is profit-sharing and spreading that success around, and using that to build a very sustainable long term." So it wasn't always, it wasn't sell or bust, but that definitely was the leading one, especially from the early days, that was the big motivator, the carrot that was out there for us.
06:00 DS: Yeah. Like how often were people approaching you and saying, "Hey, would you like... We're interested in your company, can we have some talks about potential acquisition?" Was this happening on like a monthly basis for you, once a quarter kind of thing, every week? I don't know.
06:00 AW: Somewhere probably between weekly and monthly. And it's one of those where it just kinda maybe about two years ago now is where it first started to pop up. I think we had reached some amount of maturity. We were there for a couple of years. Some of the work we're doing was a little bit more visible. And keep in mind, it was... You start getting this interaction from a few different things. Some might be potential acquirers. Some are investors with different capital type programs from venture capital and things like that, but the way I look at it is, it's outside parties being interested in taking part in your growth, whether they end up owning all of your growth or they wanna give you some money and get a percentage to help fuel it or provide some services, whatever that might be. But it definitely, a couple of...
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By Aaron Weiche
5
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Helpful links from the episode:
- Official Press Release from Alpine Software Group (ASG)
- Acquisition announcement and interview on Search Engine Land
- Alpine Software Group
FULL SHOW NOTES
[ INTRO music]
00:09 Aaron Weiche: Episode 16: Selling GatherUp - Part 1, The Why.
00:16 INTRO: Welcome to the SaaS Venture podcast, sharing the adventure of leading and growing a bootstrap SaaS company. Hear the experiences, challenges, wins, and losses shared in each episode. From Aaron Weiche of GatherUp and Darren Shaw of Whitespark. Let's go.
00:41 AW: Welcome to the SaaS Venture, I'm Aaron.
00:44 Darren Shaw: And I'm Darren.
00:45 AW: And we are back in the year of 2020 after finishing off 2019 and catching a little bit of downtime. I know I probably got even more than I normally would with Christmas on a Wednesday, New Year's Day on a Wednesday. It was a nice slow two weeks for me. How about you, Darren?
01:06 DS: Super slow. I touched in a little bit here and there, but I mostly took like a full solid two weeks off over Christmas up until January 2nd, so that was nice. Good little break, spent some time with family, get my mind off work for a while.
01:19 AW: It's one of those great... Like you can count on being able to recharge at the end of the year, because everyone wants to do the same thing.
01:27 DS: Yeah.
[chuckle]
01:28 AW: So, email is quiet, phone is quiet, text is quiet.
01:32 DS: Wonderful.
01:33 AW: I still look forward to it in the last couple of days where it's just like you gotta start getting your mind back in the game and ready to roll, and launch the new year off to a fast start.
01:42 DS: Yeah, it took me about a week to ramp up, too. I felt like my first week back, I was a bit sluggish, not firing on all cylinders, but I don't know, back in it now, got lots to do, I'm trying to time block and plan my week, and plan my day, and really get as much done as possible. So, I'm feeling productive now.
02:00 AW: You're ready to be the most efficient you for 2020.
02:02 DS: Exactly.
02:02 AW: Alright, so as we had teased at in our last episode to close out the year, the big news on my side of things is we announced, I think the public announcement was November 14th from our press release, but as of November 1st, 2019 GatherUp was acquired.
02:22 DS: It's huge.
02:23 AW: Yeah, big news. The finish line you're gunning for, and, yeah, a million different thoughts. And as you and I talked about how best to talk about this, and share things, and just try to put as much out there, I really felt like at least two, and I think we've arrived at now, we're probably gonna do three episodes on this, because there is so much ground to cover.
02:49 DS: For sure.
02:50 AW: So, and looking at this today, we wanna focus on kind of the why, and almost some of this is pre-sale, and then early once you get an offer, and things like that. And the second episode, we will look at what are all those pieces of that 90-day or 120-day window, whatever the deal timeline looks like, and how all that works out and what to expect, at least what I saw in our scenario and things like that. And then doing the third part on post-transaction, 'cause when everything closes, and especially in our case where I stayed on as CEO, one of our other founders, Mike Blumenthal stayed on, and then basically our entire staff stayed on. You just have a ton of logistics work around press releases and customer communication, and internal things, and employees, and so many other things that that post-sale transition, if you are staying on with whose ever purchased you, boys, it's its own episode. There is a laundry list of things. So...
03:57 DS: Yeah, I'm really interested in that process, like all the different moving parts, and how you have to answer to different people now, and how do your meetings go, and how often do you talk to them, and what kind of say do they have. So I'm looking forward to discussing that in part three.
04:09 AW: So before we get all the way to that, we have to get a part one done first. And maybe one of the first things that I can probably offer up that a lot of people have asked me is just like, "Were you guys always looking to sell?" And the answer from that is, yes, that was always part of starting a SaaS company, we were both doing something that we loved, but we also wanted to get it to a certain point and really looked at a sale, at a successful acquisition as being what we wanted to achieve. A time where we could take money off the table and also look at the company having its next phase with some different parameters on it.
So, that's one thing I've been asked in general a lot and the answer is absolutely. It wasn't like, "Oh, yeah, we didn't know this was possible," or, "never thought about it." Like we definitely had talks over the years on: Are we tracking the right way? Are we valuable? Who might buy us? All of those kind of things with it.
05:15 DS: Yeah, that's interesting, 'cause like, I mean, my company was never sort of... That wasn't a thought when I started my company, it's kind of just evolved into a company that is a potential acquisition target for some of these companies. And so, I'm looking at it now more thinking about that as a potential exit and thinking about all the things I would need to have in place for that if I did decide to sell, but it's not necessarily the end goal for me. Like I will continue to grow the company, but let's say the company is doing $50 million a year in revenue, and I'm happy, and things are going well, and I have good leadership that's running things, it's like, "Well, maybe I don't sell," right? So, it's one of the things that I kind of bat back and forth, I keep looking at it from multiple perspectives, and I guess we'll see as we grow.
06:00 AW: We had a plan B, like that that we brought to the table that we're like, "Listen, if we reach this level of revenue and this level of profit margin, then maybe our best move at that stage is profit-sharing and spreading that success around, and using that to build a very sustainable long term." So it wasn't always, it wasn't sell or bust, but that definitely was the leading one, especially from the early days, that was the big motivator, the carrot that was out there for us.
06:00 DS: Yeah. Like how often were people approaching you and saying, "Hey, would you like... We're interested in your company, can we have some talks about potential acquisition?" Was this happening on like a monthly basis for you, once a quarter kind of thing, every week? I don't know.
06:00 AW: Somewhere probably between weekly and monthly. And it's one of those where it just kinda maybe about two years ago now is where it first started to pop up. I think we had reached some amount of maturity. We were there for a couple of years. Some of the work we're doing was a little bit more visible. And keep in mind, it was... You start getting this interaction from a few different things. Some might be potential acquirers. Some are investors with different capital type programs from venture capital and things like that, but the way I look at it is, it's outside parties being interested in taking part in your growth, whether they end up owning all of your growth or they wanna give you some money and get a percentage to help fuel it or provide some services, whatever that might be. But it definitely, a couple of...