They Got Acquired - How most sellers find buyers

April 30, 2024
​Read on web​

The owners of Women of Influence, a community that offers networking opportunities and promotes gender equity in the workplace, adopted a tag-team approach to growing it over the years.

The third set of owners, Stephania Varalli and Alicia Skalin, focused on building its free website content and attracting more social followers, diversifying the company from its in-person event roots.

“My goal from the beginning was to design and build the media/content business, which ended up being critical to our success,” Varalli said. Especially since they owned the community during the pandemic.

With that content, they managed to multiply followers by 20x – to more than 850,000 across LinkedIn, Facebook, Twitter and Instagram.

That growth led to a 6-figure sale in 2022 to the company’s fourth owner, Dr. Rumeet Billan.

See the details in our full story:

​The third owners of this community focused on content and social growth ahead of selling​

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Here's how most sellers find buyers

How do most sellers find the right buyer?

Here's what we've seen in our research:

We've collected insights on thousands of 6, 7 and low-8 figure deals. Our M&A intelligence platform focuses on online businesses — like SaaS, agencies, content, e-comm — that have sold in the last few years.

When we interview founders about how they sold the business, we always ask: How did you connect with your buyer?

💰 Most founders we've interviewed (41%), said they found their buyer through their network. The buyer was a partner or client, or a connection through a friend, or in some cases, the seller did strategic outreach that led them to that buyer.

💰 The second most common way founders say they connected with the right buyer? The buyer approached them about a sale (32%).

💰 And the third common way sellers connected with their buyer is through a broker or marketplace (27%).

Quick recap:

• 41% found their buyer through their network
• 32% were approached by their buyer
• 27% sold through a broker or marketplace

A few insights from this data, for both sellers and buyers:

👉 It's more common than most people realize for deals to go through after the buyer approaches the seller.

These also tend to be the best deals, as it's often a strategic buyer reaching out who is willing to pay top dollar for the business because of synergies with their existing business.

But this is tricky for a few reasons. First, if you're running a great business over a certain size, you'll no doubt attract acquisition interest, sometimes an email a day as you grow. As a founder, you have to figure out which ones are worth your energy.

As a buyer, the challenge is standing out from all the other interested parties, and hitting up the founder when they're open to selling.

👉 I sometimes hear the myth that founders aren't serious about selling if they don't engage a broker. This simply isn't true, particularly for 6- and 7-figure deals.

As you can see from the data, selling through a broker or marketplace, while a good fit for some founders, is actually the least common way of connecting with a buyer.

👉 Because so many transactions are a direct result of the seller's network, it's worth thinking about how you can grow your network strategically.

If you're eying a sale in a few years, you might look for ways to establish partnerships with potential acquirers, even if they're not particularly lucrative. Partnerships, client relationships and other network effects often lead to sales.

And if you're lucky, that networking might even push you to another level altogether, where an interested buyer approaches you.

🤔 What else sticks out to you?

BTW, that data came from our M&A intelligence platform, which showcases buyers and deals in the online space (think: SaaS, e-comm, content and agencies).

I'll share more about it in the coming months as we begin to add users to the platform. In the meantime, if you're interested to learn how it could help you identify buyers and pull comps, let me know and I'll give you an early peek.

See you next time,

Lexi Grant
Founder & CEO
​They Got Acquired​
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P.S. I'll be at CEX (Content Entrepreneurs Expo) next week, on stage interviewing solopreneur Justin Welsh. If you're going, reach out. Would love to connect.