They Got Acquired - 3x (recurring) revenue 🔁

June 23, 2023
​Read on web​

Online communities and memberships are hot right now.

But contrary to what the Twitterverse might tell you, this business model isn't new. Some entrepreneurs have leaned into it for years, like the founder we're writing about today.

Carol Tice ran a community for freelance writers called Freelance Writers Den for nearly a decade before selling it for 6 figures in 2021.

She began building an email list in 2008 with an altruistic goal:

“I kept hearing from other writers who were starving as they slaved for content mills,” Tice wrote on her site. “I wanted writers to know how to find good pay and stop being exploited.”

So she helped writers land high-quality paying gigs through the Den, as its members called it. Over time, it grew to 1,500 members who paid $25/month – and Tice eventually sold it for 3x annual revenue.

Here's more on how she did it:

​This writer created a community to help her freelance peers and sold it for 6 figures​

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The joy of recurring revenue 🔁

When we interviewed Carol Tice for the story above on selling her Freelance Writers Den, she told us something worth calling out:

She was able to get a higher price for her business because it had recurring revenue.

Recurring revenue is fantastic when you're running a business, because it makes your income more predictable. That's one of the reasons SaaS (Software as a Service) companies sell for such high multiples, because the revenue comes in month after month, or year after year.

Tice's business wasn't software; she ran a community and content site. Yet she still managed to find a way to make her revenue recurring.

Just as business owners enjoy recurring revenue, buyers do, too. Because having a revenue stream that's recurring reduces their risk.

That's why, when you go to sell your business, you will likely be able to sell for a higher multiple if your revenue is recurring.

If you're building a business with the intent to sell later, here's a thought experiment that can pay dividends:

How could you adjust your business so your revenue is recurring?

Here's a post that goes into more detail on how to think about this:

​Recurring revenue: Why it’s the gold standard when you sell, plus how to lean into this model​

See you next time,

Lexi Grant
Founder & CEO
​They Got Acquired​

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P.S.​ Speaking of memberships, we're preparing to launch one here at They Got Acquired!

Our membership will support founders who are building with a sale in mind — guiding you on which levers to pull to increase the value of your business and giving you access to founders who have sold, so you can achieve your dream outcome.

I want to give a shout out to Jay Clouse, who has a course called Build a Beloved Membership. (That's an affiliate link.)

My husband Ben and I just watched it together and got lots of great ideas. (He's also considering launching a membership for his Google Sheets audience.)

Coming your way soon!