They Got Acquired - VCs said it was too niche

September 15, 2023
​Read on web​

BarBend needed cash.

In 2016, co-founders David Tao, Kenny Kline and Joe Auer were just several months into their mission of building “ESPN.com for strength” and “a home for strength nerds.”

Tao, a former freelance editor, was writing up to 30 articles a week. With smart SEO practices, the site began logging around 20,000 organic visitors a day.

By August, the trio was ready to make gains, so they turned to VCs to raise money.

“They said our idea was too small,” Tao said.

He can’t remember how many meetings they had, but he does remember all of them went poorly, he shared on Medium. Everyone was looking for the next BuzzFeed. They considered BarBend, dedicated to strength content and education, too niche.

The founders turned to a few angels — “fitness industry folks and friends” — and collected around $800,000 in seed capital.

That $800,000 helped jumpstart what would be considered the world’s largest media company dedicated to strength training, strength sports and related topics in fitness, nutrition, recovery and products.

And seven years later, a buyer would come knocking.

Here’s how it all went down:

​VCs said it was too niche. But strength site BarBend attracted 31M users and a buyer​

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How to minimize taxes when you sell 💸

As a founder, what can you do to reduce your tax burden when you sell your business?

We get this question a lot at They Got Acquired, so we enlisted an expert to help us answer it.

In this conversation with Matt Camrud, a Certified Financial Planner at Brighton Jones who supports entrepreneurs, we discuss:

• A move many founders make that you probably haven't considered
• When QSBS can be a route to paying less tax
• Why you should think about financial optimization long before you look to sell

Watch or listen to our conversation:

Common seller mistakes 🤦🏻‍♂️

We've published 100+ case studies of founders who sold their business.

Here's what comes up as the most common seller mistakes:

1. Not focusing enough on profit

Revenue is important, but profit means cash flow, and that makes your business far more valuable to buyers.

2. Waiting too long to sell

Timing is tough, but here's the bottom line: Sell *before* you burn out, so you have plenty of gas to maximize your sale.

3. Going with the first offer

You almost always want to bring in more than one offer. Competition gives you leverage, so it's one of the best ways to drive up your sale price.

4. Neglecting your financials

Clean books = fewer surprises. Ideally, work with an accounting/CFO firm that specializes in prepping for M&A. (If you need a suggestion, let us know.)

5. Being surprised by due diligence

Founders often say the most challenging part of selling was balancing due diligence with running the business. Put systems in place, delegate if possible, and expect that this phase might be grueling.

And finally...

This is the biggie. It's what drives our work here at They Got Acquired.

6. Waiting to think about selling until you want to sell

If there's one thing I want you to take away from this newsletter, it's this:

👉 Founders who THINK AHEAD about selling walk away with better deals.

If you think ahead, you can make changes in your business that make it more valuable and position you for a more favorable outcome.

So think ahead! Take our course on how to sell. (It's only one hour!) Ask us to introduce you to an advisor, even if you're two years out. Clean up your financials, increase your profit, and train your team to run the business without you.

Come up with your exit strategy now, and your future self will thank you for it.

See you next time,

Lexi Grant
Founder & CEO
​They Got Acquired​