They Got Acquired - Whoa. Stunning multiple

October 8, 2024
​Read on web​

If you're a founder who's considering selling with revenue of at least $250,000, will you take this quick survey?

It's anonymous:

Now onto today's story!

When we first heard about this deal, we passed on writing about it, for a simple reason: We typically cover deals under $50 million, and this company sold for more than that.

But the more we learned about it, the more we realized this was exactly the kind of deal we should be writing about.

This software company didn’t sell for low 9 figures because they’d grown revenue into the tens of millions, nor did they raise a boatload of money to support their growth.

Instead, they bootstrapped, grew to about 25 employees, and grew to $8 million ARR.

The reason they walked away with such a high sale price is because they landed a stunning multiple: 16x revenue.

This was in 2021, during the pandemic, when software multiples were at an all-time high. But the lessons behind their high multiple still apply.

HiddenLevers had achieved consistent, high growth in users for years, kept their team relatively lean, and served customers with money to spend: financial advisors.

It’s one of those overnight success stories… except it took the founders 11 years from launch to sale. And in the early years, revenue did not come easy. It took them 18 months to land a customer.

Learn how they navigated that early challenge and found their buyer years later:

​This software company went from struggling to find customers to selling for 16x revenue​

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Common legal mistakes and how to avoid them

I talked to yet another founder recently who was preparing to sign an LOI, or letter of intent, without a lawyer.

Don't make this mistake!

Too many founders don't take the LOI seriously, and only realize later that they've committed to terms that aren't in their favor.

This is not the time to give a quick read and sign on the dotted line.

Sure, an LOI is mostly non-binding, but they typically define the terms of your sale, and that's not easy to change later. You have the most leverage to design your dream deal before you sign an LOI.

One of the things we do really well here at They Got Acquired is connect founders to service providers. In fact, there's a law firm that specializes in supporting entrepreneurs a few paragraphs up!

For more common legal mistakes and how to avoid them, here's our story:

​9 mistakes to avoid with your letter of intent​

See you next time,

Lexi Grant
Founder & CEO
​They Got Acquired​