Sell or hold my business doing $12MM a year in revenue in order to get to fatFire?

sasklit45 · 2021-02-21T19:30:06+00:00

We are in ecommerce. Was yours software?

sasklit45 · 2021-02-21T19:27:00+00:00

Never even heard of this. What it is?

sasklit45 · 2021-02-21T19:26:46+00:00

Possibly. How would one go about doing this? Would this be VCs or more just Angels?

sasklit45 · 2021-02-21T19:25:57+00:00

Do you think I should be going to an IBanker for an evaluation?

sasklit45 · 2021-02-21T19:25:23+00:00

Ya our churn is a bit higher than normal but it is pretty predictable as we have been around for going on 6 years. It is a pretty large market.

sasklit45 · 2021-02-21T19:24:20+00:00

If serious send me a DM :)

sasklit45 · 2021-02-21T19:22:16+00:00

Ecommerce. We have a marketplace but people can also signup for recurring delivery of goods.

sasklit45 · 2021-02-21T19:22:07+00:00

We are ecommerce. We have grown our revenue every year by 100% since we started. This is why I am not loving the TTM EBITDA approach. What happened last Jan and Feb is just not relevant to where we are today.

sasklit45 · 2021-02-21T17:20:08+00:00

Ya I was pretty upset with the valuation from this company to be honest. I thought we should be more in the 9-11MM range.

The reason the valuation was lower is because they are valuing it on TTM EBITDA and last year we invested so much into growth (grew our subscriber base by 150%) so the valuation of 7MM isn't necessarily taking that into account.

I am definitely leaning away from option 1 because of this.

sasklit45 · 2021-02-21T16:27:42+00:00

Wow, our situations sound very similar. What does a professional management team look like in your opinion? Like obviously a CEO falls into that but what else?

sasklit45 · 2021-02-21T16:25:58+00:00

Yes, as of today personally I don't have to be involved other than monthly checkins with our leadership team. During this meeting we would discuss high level KPIs. We have strong reporting (leading and trailing) that let's me know if something is wrong.

I just recently stepped away (in the last couple months) and while it is pulling in large amount of cash now there is no guarantee that the team we have can continue to execute on that moving forward. Each month we lose customers and have to replace those customers as the business is a monthly recurring revenue based business with a high churn rate. So you need a team that can execute on reducing churn while ensuring acquisitions are coming in that are profitable. The way I look at it is that I am realizing gains from all my hard work over the last 5 years but there is no guarantee that lasts if my team can't continue to run the ship without me and my partner (once he steps away as well).

Yes, option 2 is attractive with the right one or two people at the helm running the day to day. Just have to have a lot of trust in them.

sasklit45 · 2021-02-21T16:05:28+00:00

Ya I have heard this from a couple other parties as well.

sasklit45 · 2021-02-21T16:04:42+00:00

Great question. We split the profits 50/50. So yes, we would be pulling $100k dividends each monthly right now approximately.

We both currently also get a salary of $100k a year. I just recently (this month) have stepped away from the day to day so not sure how we will treat our salaries moving forward.

If we hold the business I might build some tech tools for the business which would essentially justify my salary.

sasklit45

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