From full stack dev ➡️ CTO ➡️ B2B SaaS M&A at Discretion Capital. Helping you cash out 💰 and kick-start your next venture 🚀. Wrestling coach 🤼♂️
Newburyport, MA
Joined July 2008
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Scott Yewell retweeted
Einar is one of the smartest people I know around M&A. Read anything he writes on the topic.
Scott Yewell retweeted
You really should hire a banker if you're handling inbound LOIs, but if you chose not to at least do yourself a favor and read this (exhaustive, and yes a bit exhausting) guide to SaaS M&A LOIs:
Scott Yewell retweeted
📚 CHAPTER 5: When to Sell
Most founders drift. Perpetually "maybe for sale."
This is the worst of both worlds.
Either be for sale, or don't be. But don't half-ass it.
Chapter 5 → discretioncapital.com/guide/
Scott Yewell retweeted
🚨 The $9M Mistake
Two offers. Same company
🚨 Offer A: $45M
🚨 Offer B: $54M
Most founders pick B.
But after accounting for earnout probability, Offer A was worth $1.7M MORE.
Most founders never run this math.
Chapter 4 →discretioncapital.com/guide/
Scott Yewell retweeted
📚 CHAPTER 2 IS LIVE: Who Buys B2B SaaS Companies ($2-20M ARR)?
70% of acquisitions are Private Equity. Not strategics.
The buyer you pick matters more than your metrics.
Read Chapter 2 → discretioncapital.com/guide/
Scott Yewell retweeted
📖 NEW: The Definitive Guide to M&A for B2B SaaS ($2-20M ARR) Everything we've learned helping founders exit. One chapter at a time. Free. First chapter drops Monday: Who Actually Buys B2B SaaS Companies?
Scott Yewell retweeted
Your VC, angel, and lawyer are giving you SaaS M&A advice based on a world that doesn't exist anymore. 15 years ago, PE firms didn't buy companies under $10M ARR. Today, they hunt $2M ARR companies. Founders routinely leave 100-300% on the table.
📖 New guide to fix this coming
Scott Yewell retweeted
My guest on today's podcast (Greg Crabtree) calls ~3MIL in revenue the 'death zone' for companies. Really it can be a wide span, but call it $500K - $3,000,000 ballpark.
Before 3MIL, the founder can often oversee most key areas of the business.
But at this point there's an "entrepreneurial mitosis moment." As a founder you find yourself having to do two full-time roles.
1) Operations
2) Sales/Marketing
Problem: It's complicated/expensive to hire somebody that's incredibly competent at one or the other (better than you).
Leads to two main strategies:
1) The most common is to over-hire for capacity and try and sell your way out of it. The common mistake here is that founders often never return to a healthy profitability of face what he calls 'profit truth.'
2) Another approach is to overload the operation until you can bring in the adults, or commonly for businesses 4M+. This has obvious challenges.
Greg has spent the last decade of his career coming up with strategies for companies to successfully make a run through the 'death zone' or to draw back and re-tool, while remaining capitalized and profitable.
Both of his books: Simple Numbers and Simple Numbers 2.0 are fantastic. Highly recommended.
We spent an hour on today's show diving into the implications of the above. Hope you enjoy!
Another great team finding a great outcome! So excited for the Elevar team and their new trajectory with Buxton!
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Good perspective from @bryce comparing bootstrapped startups to VC funded. There are great exit opportunities for non-VC track startups with much higher probability of success bryce.medium.com/the-indie-e…
Deciphering Letters of Intent (LOIs) is an art. We process a lot of letters of LOIs each year, and here's some tips owners and founders should know:
discretioncapital.com/articl…
Guiding talks between #SaaS founders & investors offers deep insights. Today, a founder shared their pivot strategy: Instead of changing customer behaviors, they now enhance existing ones, making tasks quicker, more accurate & simpler. #B2B #BootstrapSuccess
Scott Yewell retweeted
Pay for answers. It’s faster.
If you know someone has it. Pay them for it.
Move quickly.
Think of all the opportunities you missed because you were ignorant.
The true cost isn't in acquiring knowledge; it's in suffering the consequences of not knowing.
Scott Yewell retweeted
Entrepreneurs tend to want to hold on to the business when it’s time to sell it and they want to sell it when it’s time to hold on. A story of holding on too for long 👇
My grandparents started Water Mania one of the first water parks in Orlando.
For a decade it was a cash cow, printing money. They received an offer to sell the park and hotels for a multi-8 figure exit.
They refused…they felt like the county needed it, and that it was a family asset that should be passed down.
Two years later, Disney built a water park and started offering better hotel options.
The park did ok after that but the big CAPEX required was hard to stay on top of. Once it become operationally unprofitable the main value of the business resided in the land not the business.
Hurricanes and personal injury lawsuits completed the death spiral.
They ultimately shut the park down and sold it to a developer to build a strip center.
“… a reality where you don’t need permission.”
This is great stuff @robwalling
Interesting analysis of multiple drivers for SaaS M&A from a VC (@ttunguz) perspective tomtunguz.com/how-markets-va… In bootstrapped B2B SaaS we’re also seeing demand increase from PE firms and PE backed strategics, who also value growth and prioritize NRR/churn and EBITDA next.
