How to Build and Sell a Startup with Andrew Gazdecki, Founder and CEO of Acquire.com

Yong-Soo Chung [00:00:00]

Andrew Gazdecki grew up with a rather unique goal...

Andrew Gazdecki [00:00:07]

So I grew up wanting to be the CEO of a company. That's just something I fell in love with business at an early age. I was always selling something, baseball cards, Pokemon cards, stuff on eBay, whatever.

Yong-Soo Chung [00:00:21]

So intense was his desire to be an entrepreneur that he didn't even wait for college to end before starting his first business...

Andrew Gazdecki [00:00:28]

yeah, I just built a startup. So Bizness Apps, I actually launched my senior year in college, a fifth year.

Yong-Soo Chung [00:00:34]

Bizness Apps actually became a HUGE success.

Andrew Gazdecki [00:00:38]

We ended up selling to, or partnering, I should say, with I believe around like 5,000 agencies all across the world. And then at one point, we were powering in total 5% of all of the apps published to the iTunes App Store.

Yong-Soo Chung [00:00:51]

...to the point where even Apple THEMSELVES tried to stop this juggernaut!

Clifton Sellers [00:00:56]

Yeah, that one sucked. So there was, it was called the 4.2.6 rejection rule. And we're like, does that make any sense to you? And the person that we spoke to is like, listen like... it's just the rule. I don't know.

Yong-Soo Chung [00:01:10]

At one point, Andrew's venture BusinessApps was attracting tons of investors and buyers.

Andrew Gazdecki [00:01:15]

Yeah, so that was actually 30 million for 70%, if I remember correctly. And it was a big private equity firm out in Boston and we flew out and we did the steak dinner and everything.

Yong-Soo Chung [00:01:27]

And not to mention, they were also making serious bank...

Andrew Gazdecki [00:01:31]

there was moments where we were kind of like, is this going to be like a hundred, 200 or $500 million?

Yong-Soo Chung [00:01:38]

Andrew finally ended up selling Bizness Apps for an undisclosed sum and then used that as seed capital for his current venture Acquire.com

Andrew Gazdecki [00:01:46]

Hi, I'm Andrew Gazdecki. I'm the CEO and founder of acquire.com and I help startups get acquired.

Yong-Soo Chung [00:01:52]

Acquire.com, as the name suggests, helps startups get acquired in as few as 30 days. The site boasts more than two hundred thousand founders and buyers currently doing business with them.

So, I figured I'd bring Andrew on as a copilot on this episode of First Class Founders to get a sense of one of the most pivotal moments of a startups journey - the EXIT.

Andrew Gazdecki [00:02:15]

It's true. If you sell a business for 1,000,000 of dollars, that is gonna benefit your children and your family and give you optionality in life.

Yong-Soo Chung [00:02:24]

Alright jet-setters, buckle up your seatbelts, put your phones on airplane mode, and get ready for take-off.

Andrew Gazdecki [00:02:33]

Hi, I'm Andrew Gazdecky. Let's get down to business.

Yong-Soo Chung [00:02:45]

The next generation of successful founders in this digital age of entrepreneurship will leverage their audience to launch, build, and scale their brands. First Class Founders explores this golden intersection of audience-building & company-building with proven strategies to grow both your audience, which is your distribution, and your brand, which is your product.

Because those who can master both will create a category of one.

Hi, my name is Yong-Soo Chung and I'm a serial entrepreneur who bootstrapped 3 successful businesses from $0 to $20 million over 8 years.

On this podcast, you'll learn timeless lessons from world-class content creators, startup founders, and CEOs. You'll also hear tactical tips & strategies from ME, Yong-Soo Chung!

Are you ready? Then, let’s begin!

Before we begin today’s episode, head over to firstclassfounders.com/hypervisuals to grab your free Hyper Visual summary of this episode with Andrew Gazdecki, which will outline in detail how to exit your startup for millions. Big shoutout to HyperPods for bringing this quick 3-min hyper-visual summary of this week’s episode. Again, go to firstclassfounders.com/hypervisuals to get your free visual companion to this episode.

Andrew Gazdecki is the founder and CEO of acquire.com

Andrew Gazdecki [00:04:11]

Yeah, I am currently CEO and founder of a company called acquire.com. We help startups get acquired and I absolutely love running that company because I believe the exit is arguably the most important part of the founder's journey and we get to help founders achieve that.

Yong-Soo Chung [00:04:29]

And he is definitely THE person to talk to if you are looking to sell your business. Because Andrew had sold three businesses before he started Acquire, which was last valued at a cool HUNDRED AND TEN MILLION dollars!

So, with him being in the business of brokering sales of businesses, I figured there was no person better than Andrew to talk about how to engineer the perfect exit for a successful startup.

And my first question, of course, was, when? As in, what is the right time to exit a business?

Andrew Gazdecki [00:04:58]

I think it really depends on your personal goals and what you're really trying to achieve with your business. If it's just a side project and you're just looking to learn or maybe you've lost interest or something like that, that's the reason to sell your business.

Yong-Soo Chung [00:05:16]

The other possibility, Andrew says, is to "cash in your chips". This is something bootstrapped founders should consider very seriously, he added.

Andrew Gazdecki [00:05:23]

I think a lot of startup founders just don't understand like how meaningful just a million dollars could be, or just two or $3 million or just... I mean, if you get to 10 or something like that, which is so feasible, especially if you bootstrap the company, because you can sell it for whatever you want. You can sell it whenever you want. You don't have this huge valuation that you need to grow into or get above and then sell. You can sell for $10 million, all cash to a private equity firm with, you know, 90-day transition period, you're out. And then you just get to do whatever you want with your life, go lay on a beach, go start another company. Um, you know, whatever you're working on.

Yong-Soo Chung [00:06:07]

In fact, at $10 million revenue, the buyer pool changes, Andrew says.

Andrew Gazdecki [00:06:12]

I think 10 million in revenue is where kind of your buyer pool changes and real material institutional buyers come in as well as strategics.

Yong-Soo Chung [00:06:22]

Strategics or strategic buyers are different from financial buyers...

Andrew Gazdecki [00:06:26]

a strategic buyer is buying your business for completely different reasons than a financial buyer.

Yong-Soo Chung [00:06:30]

...and we'll look into what the differences are a little later, when we get to the part about how to find the right buyer for your business. But we are still in the early stages here. We are still trying to figure out how to get ready for selling your business.

And that involves preparing yourself for attracting the right buyer.

Andrew Gazdecki [00:06:46]

I mean, first and foremost, you want to have all of your materials in order from, you know, having clean financial statements is definitely the first place to start. Like if you're selling to a financial buyer, strategic buyer, really anyone, like they're going to want to see a full 36-month broken out P&L, really understanding the health of your business. So that's number one.

Yong-Soo Chung [00:07:07]

Preparing to sell your business step 1 - get your financial statements cleaned up and in immaculate order.

Clifton Sellers [00:07:13]

Two would be just putting together any sort of additional materials - we call it a CIM, stands for confidential information memorandum. So just basically a book about your business, like how does it operate, helping the buyer understand your business as much as possible. So just preparing just as much as you can in terms of how is it performing financially, you know, how does each department work from a high level, just creating a simple data room.

Yong-Soo Chung [00:07:40]

Preparing to sell your business step 2 - create a CIM (NB: pronounced "sim") - that is, a confidential information memorandum of your business, for the buyer.

Andrew Gazdecki [00:07:49]

It can go so far with buyers because what they're looking to do is number one, understand your business understand what growth levers are there. Is there opportunities to raise prices? Is there opportunity to reduce expenses? Buyers will look for different avenues to either grow the business or optimize the business. So making that really clear.

Yong-Soo Chung [00:08:05]

A CIM also indicates to buyers that you are serious about the transaction and committed to the exit.

Andrew Gazdecki [00:08:11]

buyers are definitely not looking for deals where you got like one foot in and like one foot out. Where like if you're gonna sell your business, commit to the process. So you can speak to a lot of buyers all at the same time. So you can create as much interest as possible. 

Yong-Soo Chung [00:08:25]

Preparing to sell your business step 3 - show complete commitment to the sale process and show it clearly.

Andrew also warns about the commonly-held belief that "businesses are bought not sold."

Andrew Gazdecki [00:08:37]

it just doesn't work like that for 99% of companies is you, you actively have to sell your business and the best parts about your business. So I would say that's what buyers look for the most is just kind of a level of, um, professionalism and preparation when founders go out to sell their business.

Yong-Soo Chung [00:08:54]

Preparing to sell your business step 4 - look for opportunities to network with potential future buyers and actively pursue the sale of your business.

And this is typically the point where most entrepreneurs and business owners get a serious reality-check of sorts.

Because selling a business can take a while.

A really long while.

Andrew Gazdecki [00:09:12]

It depends on the complexity of the deal. Typically as the enterprise value goes up, the longer it's going to take to get the deal across the finish line. Due diligence is going to take, there's just more moving parts. So if I had to just kind of ballpark it, I'd say, you know, it could take one to six months. I mean, it's really, maybe even nine, you know, it just depends on how much buyer interest the hell of your business is really hard to bucket all startups into.

Yong-Soo Chung [00:09:39]

But, of course, patience usually tends to yield pretty sweet rewards.

Andrew Gazdecki [00:09:43]

So in 2020 and 2021, when I first launched the business, we would see a ton of unprofitable businesses sell or businesses that break even.

Yong-Soo Chung [00:09:52]

...except, things have changed a bit now.

Andrew Gazdecki [00:09:54]

..now we're seeing just almost just-profitable businesses sold and so the multiples on that we typically see are anyway from four to 10x depending on the size of the business and also the health of the business.

Yong-Soo Chung [00:10:09]

Still, a 4x to 10x return on your business is a pretty decent chunk of change, I think.

The exact valuation, Andrew says, can depend on several different metrics.

Andrew Gazdecki [00:10:18]

...such as what is your churn, what is your customer lifetime value, is your- you have a defensible brand, do you have a defensible go-to-market strategy. There's a lot of different components because if you have a business where as an example it's a but it's dependent on you as owner. Like you have a big social following or something like that. It's a commoditized product. There's 20 other competitors and it's really easy to spin one up. You do a lot of one-time deals or something like that, like you did to launch the business and you have all these customers you still have to support but they're not paying you in your current revenue.

Yong-Soo Chung [00:10:53]

Basically, every aspect that makes your business 'uniquely yours' has the potential to actually HURT your valuation, Andrew warns. Because businesses that rely on YOUR brand to grow and thrive won't be the same if you are no longer associated with it, will they? That would be like trying to sell Air Jordans without Michael Jordan endorsing it!

Andrew Gazdecki [00:11:11]

So just understanding just... The better your business is just kind of as a basic measurement, um, will increase your valuation.

Yong-Soo Chung [00:11:18]

Okay, if you are following along, then at this point you are actively seeking out potential buyers with a nice little summary of your business. But, who exactly are you selling to? That is, who are these buyers?

Andrew Gazdecki [00:11:29]

a strategic buyer is buying your business for completely different reasons than a financial buyer

Yong-Soo Chung [00:11:34]

And how exactly should you structure your deals?

Andrew Gazdecki [00:11:36]

the terms and the structure of your deal can have a dramatic effect on your final net outcome

Yong-Soo Chung [00:11:45]

More details on this aspect of selling your business in a little while, but first let me give a shoutout to my wonderful sponsor Riverside!

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Huge thanks to Riverside for sponsoring this episode!

Okay, let's get to our episode about how to sell a successful startup with Andrew Gazdecki.

Before the break, we discussed how to prepare materials for and what to expect from potential buyers. The next step is to actually understand what KIND of buyers might be interested in purchasing your business.

And this is where this next bit of information will come in very handy.

You see, there are TWO kinds of buyers who might want to purchase your business - strategic buyers and financial buyers.

Andrew Gazdecki [00:14:07]

.So financial buyers are typically, uh, you know, private equity firms, you know, individual buyers, a lot of times. strategic buyers are going to be a larger company, maybe a public company, a larger VC back company, and they see value in what you've built beyond just the financial, so they see value in, 'Okay. This is like a puzzle piece. If it's in our product roadmap or if we take this product and cross out to our customers, you know, we can really accelerate the growth of our core business'.

Yong-Soo Chung [00:14:35]

Essentially, financial buyers rely on the promise of making back their investment through your existing customer base. This could be a small private equity firm or an individual buyer using an SBA loan.

Strategic buyers, on the other hand, are looking to integrate your business and make it a part of their existing offerings. Like Apple buying Siri from its original developers, for example.

Andrew Gazdecki [00:14:57]

So you'll generally always get larger multiples with strategics because the business is worth more to them than it is to you. And so if you're ever in a position where you're able to sell it to a strategic, I mean, definitely do.

Yong-Soo Chung [00:15:10]

Except, finding a strategic buyer for your business is hard. Like, REALLY hard.

Andrew Gazdecki [00:15:15]

...because someone at the company is going to have to kind of put their neck out and essentially their job and say, "Hey, I'm going to say we need to buy this company to help us accelerate into this market or it's going to grow revenue by this amount." Or maybe it's the CEO making the decision.

Yong-Soo Chung [00:15:32]

And THAT, as you can guess, doesn't happen very often.

Financial buyers on the other hand are a much easier get.

Andrew Gazdecki [00:15:39]

You're far more likely to be acquired by a financial buyer because that's essentially all private equity firms do, is they're in the business of buying businesses. And so they have a real tight valuation box if you fit in this and your churn is below this number and your revenue is above this number and your profitability margin's here, they'll make a bid on your business and they'll buy your business.

Yong-Soo Chung [00:16:00]

In fact, if you are smart about it, you can technically reverse-engineer a nice little million-dollar exit for your business.

Andrew Gazdecki [00:16:07]

...understand, you know, what's your business could sell to just by looking up what private equity firms pay for. What is their sweet spot? What do they look for? Um, and kind of, you can almost reverse engineer like a two, three, four, five million dollar exit to these firms.

Yong-Soo Chung [00:16:21]

BUT, if you are set on selling your business only and ONLY to strategic buyers...

Andrew Gazdecki [00:16:26]

...begin creating those relationships early. So when you're ready to go to market. They're already familiar with your business and maybe excited about it. And so when you're ready to sell, that also dramatically increase your odds.

Yong-Soo Chung [00:16:39]

Once you have figured out the right buyer for selling your business, comes the most important part - structuring the deal. And, as you may have already figured, structuring a deal can get a bit... complicated.

Andrew Gazdecki [00:16:50]

there's so many variables. I mean, we see a lot of deals with seller financing. As an example, we see a lot of deals with, like you said, earnouts. We see a lot of deals with stock components as well.

Yong-Soo Chung [00:17:02]

A lot of it also depends on whether your business is being purchased by a strategic buyer or a financial buyer.

Andrew Gazdecki [00:17:08]

So strategics will definitely give you more of a blended deal-structure. So, 60% cash on close. uh, some earnout, some stock, or something like that to compensate for the higher valuation that they're giving you. And then on the private equity side,

Yong-Soo Chung [00:17:26]

...that is, financial buyers...

Andrew Gazdecki [00:17:28]

you'll get things like all cash on close, 30 day due diligence. You're out of the business within 90 days.

Yong-Soo Chung [00:17:35]

Take the sale of Andrew's startup, Bizness Apps for example.

Andrew Gazdecki [00:17:38]

so for the acquisition of, um, Bizness Apps, um, I was able to negotiate, um, all cash-on-close, 90 day transition. We had 2 million cash on hand, which they added to, this was an idea of mine, where we added that to the final purchase price. So when we were taxed, we benefited from QSBS instead of dividending out the cash at 40%. So we only paid 13% state tax. And so it was a stock sale.

Yong-Soo Chung [00:18:06]

Okay, one, that bit about benefiting from QSBS was a GENIUS move on Andrew's part. QSBS, which stands for Qualified Small Business Stock, allows you to sell your company and pocket up to $10 million dollars tax-free, on a federal level. There are some specific qualifications your company needs to meet, but if you plan things out in advance, you can save yourself a ton of money on taxes.

And two, did you notice all the little maneuvers and modifications Andrew made to the deal for Bizness Apps?

Andrew Gazdecki [00:18:34]

So it's important to understand that the terms and the structure of your deal can have a dramatic effect on your final net outcome.

Yong-Soo Chung [00:18:40]

In fact, if you structure the terms of your deal smartly, it can even radically change what Andrew called "your final net outcome".

Andrew Gazdecki [00:18:47]

Like as an example, uh, let's say you sell a business for, uh, $10 million, but it's a stock transaction, all cash-on-close, you benefit from QSBS. Um, and then you have another example of a startup with, uh, let's say three co-founders, they've done two rounds of financing, they sell for 50 million bucks. They may walk with less capital than, than you because of the equity that they own in the business, um, the amount that they're selling for. So if you can structure, you know, an acquisition with favorable terms like that, that's the way to go. And I'd say that's probably the most common is all cash on close with some component of, you know, maybe a little bit of seller financing at the end, you know, 80% cash on close, 20% seller financing with three to six month transition, depending on the size of the business.

Yong-Soo Chung [00:19:34]

Seller financing is when the seller effectively loans the buyer money to finance the deal.

Andrew Gazdecki [00:19:39]

So let's say you want to buy my company for $5 million. And you say, well, I'll give you a million dollars or let's say we're going to do 80% cash on close, 20% seller financing. So I would receive $4 million cash on close and then $1 million, typically over the course of 12, 24, sometimes 36 months, sometimes longer paid on a monthly quarterly, um, or like yearly balloon payments, which means just one large payment at the end with some form of interest. So you're basically as owner of the business, you're receiving that and at the capital.

Yong-Soo Chung [00:20:12]

It's important to note here that seller financing is different from an earnout.

Andrew Gazdecki [00:20:15]

So it's not an earn out, um, earn outs are based on financial performance of the business and you hit certain goals.

Yong-Soo Chung [00:20:20]

Put simply, seller financing is the seller owing you a portion of the money and paying it out - either over a period of time or after a period of time.

Andrew Gazdecki [00:20:28]

you may think of that like, oh, that sucks or something like that, but really it can be good because as a buyer, it de-risks the acquisition for them. So you have a financial incentive to be available if there's a bug that comes up or if some customer comes out of nowhere with some weird payment plan that they've never heard of or a key vendor drops them and you are the only person with the contact information or something like that. So, um, so, seller financing is a great way to kind of bridge the gap in terms of getting the deal done by de-risking the acquisition for the buyer and letting them know that, um, you, you aren't going to just go away essentially if they need you.

Yong-Soo Chung [00:21:07]

No, this doesn't mean you are "on-call" for the buyer. It's more of a "good faith" deal.

Andrew Gazdecki [00:21:11]

Seller financing typically is, I don't have to do anything, but just in good faith, typically you'd wanna keep the business afloat, especially if you put some blood, sweat and tears into it.

Yong-Soo Chung [00:21:21]

Of course, this requires a great deal of trust between the two parties. Which is why Andrew recommends bringing in an attorney, as soon as you have even a little bit of traction in the deal.

Andrew Gazdecki [00:21:30]

So as soon as you saw, uh, receive an LOI, I always recommend looping in legal counsel. Um, just for safe measures, it's going to be one of the largest transactions potential of your life. You might as well, you know, put some, some resources into it to make sure it goes smoothly and then it also just shows, you know, professionalism on, on both sides, like, 'Hey, you can't, like, you're not going to pull anything weird or unprofessional here.'

Yong-Soo Chung [00:21:55]

Another advantage of bringing in an attorney is that your attorney can keep both parties accountable on timelines and help you close the deal.

Andrew Gazdecki [00:22:02]

when there's no attorneys involved, like, you know, the deal kind of just wanes out and it just takes forever and there's no clear timeline, so your attorney can actually act as kind of the person that pushes the deal towards close. Cause if you agree on closing on this date, you're going to have someone in your corner to help you with that.

Yong-Soo Chung [00:22:20]

Andrew, for example, looped in an attorney as soon as he got to market with Bizness Apps.

Andrew Gazdecki [00:22:25]

so even like when I first received the LOI, like I had that reviewed and, um, the purchase agreement I signed, um, you know, when you get the reps and the warranties and you got to list out all the stuff to, you know, all the things that potentially are bad about your business and you want them to be very aware of. Um, that's a moment where, you know, you really want to be honest in terms of, like, 'Hey, we tried this and we're out or, you know, this part of the business, um, you know, might have a bruise', like just being really, really clear about, you know, things to watch out for in the business or things that, um, the buyer should know. So there's no surprises after they buy a post acquisition.

Yong-Soo Chung [00:23:02]

Or, in other words...

Andrew Gazdecki [00:23:03]

just as soon as soon as you feel like you have a real legal document, loop in an attorney.

Yong-Soo Chung [00:23:08]

This is probably the most exciting juncture for you as a business owner. The business you built with blood, sweat, and tears is on the verge of graduating into a sale. You are about to relinquish your ownership and the prospect of a beach vacation in Ibiza is swimming before your eyes...

And then the deal just... falls through!

Andrew Gazdecki [00:23:28]

Yeah, unfortunately we have, um, you know, <before you sign a letter of intent, I think a lot of founders get really excited. Like I got a letter of intent and then you start spending the money in your head and, but not all LOIs close.

Yong-Soo Chung [00:23:43]

That's not the only nightmare scenario, by the way. There are some that are way more painful.

Andrew Gazdecki [00:23:47]

like where you go through due diligence for three months and then at the end of it, they re-price. Re-price means they found something bad and now they wanna lower the price because they know you're exhausted and you're probably gonna take it.

Yong-Soo Chung [00:24:00]

Imagine how incredibly frustrating it must be to have all that money suddenly disappear… 

ut, guess what, Andrew has a surefire method to deal with the disappointment of LOIs not closing...

Andrew Gazdecki [00:24:13]

before you sign an LOI, there's so much you can do to prevent a deal falling through and having one of those nightmare scenarios. But to avoid that, I always recommend a

Yong-Soo Chung [00:24:23]

I'll tell you what Andrew recommends in a bit but first, I want to give a shout out to our most adorable sponsor since this podcast began, my wonderful French bulldog (pause) Humphrey!

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Okay, let's get back to our episode with Andrew Gazdecki on how to sell a successful startup.

Before the break, Andrew was telling us about the disappointment of LOIs not closing and how to avoid it from happening to you.
Here is what Andrew recommends.

Andrew Gazdecki [00:25:59]

before you sign an LOI, there's so much you can do to prevent a deal falling through and having one of those nightmare scenarios. But to avoid that, I always recommend a pre-LOI signing call where you just get on the same page with the buyer, get really aligned on, okay, like what are we gonna do for due diligence? Do you have any references I can call for people you've worked with or companies that you've acquired, how to go? So goodwill is really important.

Yong-Soo Chung [00:26:25]

That pre-LOI signing call, combined with having an attorney in your corner can work wonders for the deal.

Because, every deal is perpetually at the risk of being 'killed', especially if you let things drag for too long...

Andrew Gazdecki [00:26:37]

time really does kill deals. So longer, you just let things kind of drag out. And if you're not, you know, you're probably running the business during due diligence, revenue drops, um, also just, you know, surprises kill deals too.

Yong-Soo Chung [00:26:52]

Deal killers number one and two - time and surprises.

Andrew Gazdecki [00:26:57]

...as a startup founder, you don't want to hide anything. So it's going to come out in due diligence and that kills deals all the time.

Yong-Soo Chung [00:27:04]

Deal killer number three - hiding information.

Andrew Gazdecki [00:27:07]

Um, and then another big one is just financing. How is the buyer going to finance a deal? So you'll work with a lot of private equity firms. They'll say, Oh, we got it. Da da da. Um, but if they're going to be fundraising in the background to get the deal closed, you want to know that upfront.

Yong-Soo Chung [00:27:23]

Deal killer number four - uncertain financing.

Andrew Gazdecki [00:27:27]

Like that's a very common thing. It's just a leveraged buyout, but the buyer should at least be saying, Hey, we're going to have to pull together, you know, half of this raising debt or whatever it may be, but you should be well aware that that's happening because they may not be able to secure the capital in time. And it's kind of a risk that you're taking on, but if you know the risk upfront, again, it's just that goodwill between you and the buyer and how comfortable you are with those terms.

Yong-Soo Chung [00:27:51]

And, of course, there is THIS classic red flag, which is ALWAYS applicable.

Andrew Gazdecki [00:27:56]

if it feels too good to be true, it probably is, that's another kind of key one.

Yong-Soo Chung [00:28:01]

...or this one:

Andrew Gazdecki [00:28:02]

We see a lot of people sometimes just firing out letter of intents without really doing much due diligence.

Yong-Soo Chung [00:28:08]

...and this one:

Andrew Gazdecki [00:28:09]

I've also seen scenarios where you'll get an LOI that says, Hey, we're going to buy your business for $5 million, but there's no discussion or language around how is that capital going to be received? And then you get all through due diligence and you get to a purchase agreement and then it's 10% cash on close and then 90% seller financing or something sharky like that.

Yong-Soo Chung [00:28:30]

Andrew's advice in this matter is pretty simple and straightforward.

Andrew Gazdecki [00:28:33]

So just really being clear and having a plan on how to increase the likelihood of your LOI closing and then just being clear on, um, you know, who you're working with, are they, can you, are they reputable? Um, what do they like to work with? Do they have a capital, all those things and really, really decrease odds of having a nightmare scenario.

Yong-Soo Chung [00:28:51]

We've almost reached the end of the episode but before wrapping up the episode, I want to share an incident that is the perfect encapsulation of Andrew's entrepreneurial tenacity and never-say-die spirit.

It happened a few years ago, in 2016, when Bizness Apps was running at full steam.

Andrew Gazdecki [00:29:07]

I believe it was maybe 2016, they came out with a new rejection rule, 4.2.6 that essentially would ban any app built with template of components.

Yong-Soo Chung [00:29:20]

I believe it was maybe 2016, they came out with a new rejection rule, 4.2.6 that essentially would ban any app built with template of components.

Andrew Gazdecki [00:29:28]

So that was basically everything we use. It was template adapts. You could drag and drop different features.

Yong-Soo Chung [00:29:33]

And, Apple decided that Bizness Apps was, indeed, infringing the rule.

Andrew Gazdecki [00:29:39]

the ironic part about this ruling is even the people at Apple didn't think it made sense. And the person that we spoke to is like, listen like... it's just the rule. I don't know.

Yong-Soo Chung [00:29:50]

Which is when Andrew tried, what he calls, a 'Hail Mary' move.

Andrew Gazdecki [00:29:54]

So I, I cold emailed, um, one Saturday night, just hail Mary from the one yard line.

Yong-Soo Chung [00:30:03]

The story of how that email ended up saving Bizness Apps is available as a bonus segment, crafted exclusively for premium members of First Class Founders.

Premium members also get access to the raw interview, where you can listen to Andrew narrate the story of how he built and grew his two startups - a job board called Phone Freelancer...

Andrew Gazdecki [00:30:21]

I think I called it get-app-quotes at one time. I can't remember. I was like 18, 19, 20. And, uh, what I did to grow the job board was I literally spent an entire -I remember this- a whole winter semester where everyone goes home and I probably spent thousand hours just commenting on every single blog I could find that had anything to do with the iPhone or iPhone apps or anything like that. Just, Hey, if you have an app idea, go to phonefreelancer.com

Yong-Soo Chung [00:30:52]

...and the extremely successful Bizness Apps.

Andrew Gazdecki [00:30:56]

if there's a market that you think is going to be big, I always like to say, you want to make a obvious bet to you that's going to become obvious to everybody else in the future. So I knew that mobile apps were going to be big. I had a lot of, I could have been wrong, but, um, I had a lot of conviction around that and so phonefreelancer was just my way of like, let me increase my service area luck and see if I could find something. And then that led to, um, business apps.

Yong-Soo Chung [00:31:24]

Listen to the whole raw interview by becoming a premium member of First Class Founders. Premium members also enjoy a ton of other perks - such as access to a private feed, AD-FREE episodes that are released a WEEK early!

To become a premium member, join the First-Class Founders membership today - go to firstclassfounders.com/join. Look for a link in the show notes!

Andrew Gazdecki [00:31:51]

I just have one gear, you know, it's just kind of, uh, let's just say I still work just as hard. I just, I think the, the way I work has changed just cause, you know, once you build a business, you make so many mistakes, you make every mistake in the book. So I, I feel like I've avoided a lot of those mistakes, but I still make mistakes. I still have to have hard conversations. I still have to, you know, work with my team on strategy. Um, at a marketplace is super complex. You got to basically get both sides of the table and then we're selling businesses. So every business is super complex too. I feel like I couldn't pick a harder business to start, um, which is exciting. And then it's also rewarding because when we're successful, um, you know, we materially change people's lives. And I know that sounds cheesy, but it's true. If you sell a business for millions of dollars, that is going to benefit your children and your family and give you optionality in life.

Yong-Soo Chung [00:32:38]

Andrew sees acquire.com as a helpful ally for all startup founders. An ally he wishes HE had when HE was going through acquisitions himself.

Andrew Gazdecki [00:32:48]

I kind of feel like I'm just building something that I wish I had when, you know, I was going through, you know, acquisitions because it is confusing. It is daunting. Even just finding a buyer is really difficult to do. Um, and then going through due diligence is can seem wild. And then, you know, you just feel outmatched in terms of whether you're selling to a strategic, they're like a multi-billion dollar company or a private equity firm, and they're like a deca-billion company or something like that. So you just feel like, you know, you're, you're just this little like David with Goliath and so, you know, I thought it would just be a great opportunity to level the playing field

Yong-Soo Chung [00:33:19]

And THAT, in fact, is his vision for the future of acquire.com

Andrew Gazdecki [00:33:23]

I would love to get acquire to a point where we really, we, we standardize and we really streamline the whole acquisition process to a point where we have the standard form LOI. We have the standard form purchase agreement where we're able to take these mundane parts of the acquisition process and really streamline them for both you as a startup founder and then also buyers as well. So more transactions get done. Um, and that also includes things like making it easier to prepare due diligence items or show the financial health of your business. And we've done a lot of innovation around that, such as, you know, we have an LOI builder where you can literally build an LOI and send it, download it as a PDF and sign it, um, we have a P&L builder as well. So just, I think building out that vision to a point where, you know, we're, we're truly able to kind of shift the paradigm of how acquisitions are done. That would be my goal. If we're able to get to a point where our products we truly does help you maximize your exit faster and easier than, you know, previously in a manual world, um, that that's my goal in the next 10 years.

Yong-Soo Chung [00:34:35]

If I were to sum up this episode and Andrew Gazdecki in one line, I don't think I could put it any better than Andrew himself:

Andrew Gazdecki [00:34:41]

I think it's one of the coolest jobs I could have made because I love startups and I get to look at them all day.

Yong-Soo Chung [00:34:48]

If you are an entrepreneur with a startup, Andrew has only ONE piece of advice for you.

Andrew Gazdecki [00:34:53]

just keep at it. You know, like every, no startup founder knows everything. And every business owner makes mistakes. Every entrepreneur, it's hard, you know? So I would say just, you know, keep at it and just keep going. Cause I think a big part of entrepreneurship is learning on the fly.  Like I learn new stuff every day.

Yong-Soo Chung [00:35:12]

It is also what he would tell himself if could start from scratch all over again...

Andrew Gazdecki [00:35:17]

just never stop learning. Cause business is always changing from. The marketing playbooks I worked 10 years ago, they don't work anymore. Same with sales strategies, same with recruiting, same with culture, like it all kind of changes. At least I've noticed a lot of differences this time around. So just always be learning.

Yong-Soo Chung [00:35:36]

If you learned something from this episode, do share it on your favorite social network and tag me so I can re-share it to my audience! I'm @yongsoochung on X and you can find all my other social media handles in the show notes.

As for Andrew, you can connect with him on twitter-slash-X at:

Andrew Gazdecki [00:35:3]

@gazdecki or LinkedIn, just Andrew Gazdecki on LinkedIn, or just shoot me an email, andrew@acquire.com.

Yong-Soo Chung [00:35:58]

And, if you enjoyed listening to this episode with Andrew, you might also want to listen to episode number 56 with Tibo Louis-Lucas titled "From Bankruptcy to Millionaire in 2 Years: How Tibo Louis-Lucas Built and Sold TweetHunter & Taplio for Multi-Millions." In this episode, Tibo shared his incredible journey of resilience, innovation, and true entrepreneurial spirit. Premium members can also listen to how Tibo structured HIS deal when he sold TweetHunter and Taplio.

Andrew Gazdecki [00:36:34]

I was exceptionally good at clarinet and middle school where I was like first chair in the eighth-grade band in sixth grade and then like my high school tried to recruit me, but I only did it cause my mom made me play clarinet. I hated it.