324: Tim Schumacher — The Bootstrapper's Mindset
Download MP3Today, I'm talking to Tim Schumacher, the man who almost bought my business. We'll be talking about private equity, what it takes to build a really good, sellable bootstrap business, what funding options exist, and what AI is gonna do to the industry. This episode is sponsored by acquire.com. More on that later. Now here's Tim.
Arvid:Tim, it is really, really nice to meet you again. We we have a history between the both of us, and, it's been quite quite a pleasure to watch your journey over the last decade or so. It's been quite a while for you. You cofounded this amazing domain marketplace, SITO, and there's I o two, the the business behind AppLoc plus. And you were involved with Ecosia, and you were running SAS Group and so many more online businesses.
Arvid:You know what I wonder? Like, do you ever feel the desire to start your own small solopreneur SaaS business again just for the raw joy of building?
Tim:Well, funny that you asked that. And and, by the way, I mean, this is a podcast, but for those who are looking at the video, I think our t shirt shirt say it all. You're wearing a t shirt that says building in public, and I'm wearing a t shirt saying r, a r r. And I think that's the difference between people. There are people who are really great between 0 and 1, and I think you're one of those people, like really great, build an MVP, build something from scratch.
Tim:And I've I've been there early. I've been a coder for the 1st 10 years, kind of between 14 24 maybe. But I I I discovered over the last decade, I would say, that I'm really good between 1 and 10 or 1a100, but not from 0 to 1. It's a very different skill set, and that's why I started SaaS Group because they take businesses who are already at 1 or 2 or something but needs to be taken to the next level, and I still started something. I also started Climate Fund, which is essentially we also build that from scratch.
Tim:But I to be honest, I couldn't imagine sitting down and coding a project really and getting it to the very, very initial phase. It's like, that's just not me.
Arvid:Oh, that's funny. Yeah. There there was a talk at MicroConf just in Atlanta a couple weeks ago about the different kinds of motivation between people. And some some people really have this long term vision. They really wanna build something massive.
Arvid:They want to build something that impacts a lot of people. And then some people just want to tinker on their little projects, right? That's what they want to do. It's nice to see that we both have kinda similar trajectories, but very different ways of doing it. I really, really like this.
Tim:And both is needed. I mean, for for society to thrive, for entrepreneurial societies, you need both of those people. You need, the builders, and the scalers.
Arvid:And and you kinda you accumulate these people. You gather them up. Right? That's what SAS Group does. Yeah.
Arvid:How how is SAS Group been doing? When we talked, for the the last time, like, we talked face to face was actually in Berlin when I was still living there. Was must have been, like, 2019, like, early 2019.
Tim:Before corona or or a year before corona. So it must be 5 years, when we first met met. Yeah.
Arvid:Because the it's it's so long ago. It's crazy. So many things have happened along those those lines. So we we were back we could talk about this story kinda later if you want to, but I wanna see where has SAS Group gone from those days when we were still chatting to today? Like, what has happened over the last 5 years for you?
Tim:A lot a lot has happened. I mean, back then, we were just getting started. I I like, we were interested in your company. I think we can transparently say that. We even put in a bid, you and your wife, you build an awesome business, and we were very interested in that.
Tim:Put in a bid, and it probably would have been our second or third business, so very, very early. Now we have 20. We have 20 SaaS businesses worth 60,000,000 AR. We've been all along the way, we've been acquiring businesses between 1 10,000,000 in ARR, always with the goal to taking it to the next level, keeping keeping what what's made the businesses great until then, but inject the things which were missing. That's that's our playbook.
Tim:And, of course, it sometimes works really, really well, and we scale businesses 5 x over revenues, went up from my one business, for example, from 2,000,000 to 10,000,000 within 2 years. But we've also other businesses where it didn't work, where the revenue was totally flat and we did a lot of good things, but it just didn't move the needle. But, overall, I think the the model has been working and SAS Group is now, we have 60,000,000,000 ARR, 300 people across 30 different countries, fully a remote company, yet very entrepreneurial, very, very operationally driven. We're not financially people. We're we're operators, and, we like to build a company.
Arvid:That's awesome. And and I looked into your portfolio because I wanted to see what was going on there, and I was kind of almost shocked in a very good way to see so many businesses that I have used in the past. I was just looking at, like, towers, a tool that I regularly use. Pre render was a tool that I used back in 20 14 and 15 or something. Like, I've been I've been with these tools for a long while and, like, we're work for 2 like that.
Arvid:There's there's so many, really, really interesting tools that are very developer centric in many ways too in in the portfolio. Of the tools. Yeah. How how intentional is that? Like, how how intentional is your portfolio allocation there?
Tim:So, we're kind of in between. We're opportunistic when good deals come up, but also we know what we know and what we don't know. And probably the 2 topics which we know best are developer tools and online marketing tools. Developer tools in particular, the background of my cofounder. My background is a bit more in online marketing, though that's what I gravitate to.
Tim:Your business would have an odd one out because we don't know much about education. But we know a bit about marketplaces. As you mentioned, I founded sedo.com, the domain marketplace. So some of the dynamics of marketplaces when you have, new case teachers, students on the other side, and the the SaaS tool in between. That's I I like that logic a lot, but it would have been a bit bit more opportunistic.
Tim:Developer tools are certainly one our sweet spots.
Arvid:Yeah. That makes sense. And it it usually makes sense to kinda go with what you really understand. Right? So it's just just I you know what?
Arvid:Like, as a developer myself, building my own new company on on the side or, I guess, as a main thing right now, it really depends on how much time I spend any given week. I I do use a lot of developer tools, but my usage of them has changed over the last couple weeks or a couple months even with, like, you know, the advent of LLMs and AI and all these little, you know, tools that all of a sudden make certain tasks that were just regular work, make make them non work. Like, you just give a command and and it happens. Do do you see this affecting both your portfolio companies and companies in the field in general? Is AI something that you keep an eye on as a as a p?
Tim:Absolutely. I mean, that's that's probably the biggest shift since the advent of the Internet, for better or worse. I think we've seen some areas where, services are made redundant, where we're worried that, it could change things. We have other services which suddenly become so much more valuable because we can we can inject AI into existing business models, and they're suddenly 10x more valuable because they're not they're not, for example, providing information, but they're they're interpreting information and they're suddenly, they can replace entire departments. And so probably the people who should who are using them should be more worried than us.
Tim:But, of course, we're making a big push of, of ejecting AI in all parts of the company, whether it's it's efficiency gains, whether it's the business models, whether it's used as a funnel. So for example, writing our own, custom GPTs for the for the, CheckGPT store, I think we should do more. It's we're still a very small team, that that does it. Plus, of course, a lot of the developers in the in the group who do it as a side thing, but we probably should should double down on it a bit more. But as always, it's like so so many things to do.
Arvid:Yeah. And and everything changes, like, every 4 days. Right? Right. Yeah.
Arvid:That's the other problem there. I I do wonder though, and and we talked about this, earlier. There is platform risk in AI. Right? There is they particularly if you use OpenAI's, like API systems or if you use, like, the anthropic stuff, Claude and whatnot.
Arvid:Right? Like, the moment you you work on somebody else's platform, that is a risk for businesses. And for a company that wants to have a diverse portfolio, them all depending on the same platform is probably not the best idea. How do you deal with that?
Tim:Well, tricky. I mean, one thing is using different tools. On on the other side, it's it's just a I think it's a it's a risk we have to assume in certain areas. There's there's no way. I mean, it's a bit like getting traffic.
Tim:Well, you depend on Google. It's like, okay. What what's there to do is, like, you just make sure that you don't screw it up and you don't do any black hat SEO tactics which can get you banned, and you do it, you play by the rules. And, but, yeah, that's that that's a tricky business. I mean, that's that that brings us, of course, to the question of the power of the big tech companies in society and also how how how Europe is handling it versus the US, versus Asia.
Tim:That's probably a it'd be a separate topic, but, yeah, that's, of course, I think every every entrepreneur is rightfully worried about this because we're all dependent on big tech, and we've seen lots of cases where, companies have been wiped out overnight, whether it's through regulation or through, some change of some big tech company.
Arvid:Yeah. Yeah. I do you're right. It's like the there are so many threats and you can't monitor them all
Tim:because that's monitor them more.
Arvid:You can
Tim:we can do certain and I think and that maybe brings us also to one of the main topics of the podcast, on the exit question. As a as a portfolio company, if one of our companies goes bust, well, that's that would be great, but it's like, we we live on. As a founder, you usually have all your eggs in one basket. You have your net worth, big chunk usually at 1 company. And we we know that that makes founders nervous.
Tim:They might have worked 4, 5, 6 years on on a business. They've created something with millions of revenues but not taking a lot out very often. And then it's like, okay. If that thing goes bust, that's that's that's tragic.
Arvid:Yeah. Yeah. That's like over relying on kind of external technologies that then employed your business, not a smart choice. But something, like you said, that you really don't have much of a choice of anymore because everybody else is also doing it right. Like there's this kind of hurt mentality of everything needs AI that if you don't use it, your customers might go to the guy who promises something newfangled even though it's just a chatty p t wrapper inside of their their business.
Arvid:Right? So, yeah, that's the risk. Let's let's talk. I like this idea. I like the idea of, going a little bit into the meat of what acquisitions are all about because a lot of listeners to this show are founders, either 1repreneurs just starting out or people on a journey to hopefully a 1,000,000, 10,000,000 in ARR.
Arvid:Wouldn't that be great for everybody here? So let's let's talk about the I would like to hear the markers that you look for, like the success markers or, like, the, you know, the the indicators of future success in a SaaS business? Because that's what I always wondered about. Like, what does an acquirer thing makes a business acquirable? Do you have a list of these?
Arvid:Like, do do you have you probably have an internal playbook to go through, and obviously, that's probably a secret. But do you have something that you would give founders as kind of an indicator of what they should aspire to?
Tim:Sure. Yeah. Of course. I mean, at at the end of the day, I think everybody looks for for profitable growth at the end of the day. So, are you able to acquire customers at a at a decent price?
Tim:So kind of the the CAC to LTB ratio, are those customers staying? So churn, but also upsell, downgrades, developments, looking at the cohorts, looking at how happy are clients at the end of the day, and then that all resulting in in the overall MRR graph. So all of that is not rocket science, but I think we're all looking for making clients happy, providing some service which is valuable to some people. It doesn't have to be everyone. Usually, like, if you please everyone, you please nobody, but you you need to have a defined target.
Tim:Yeah. I mentioned, for example, Git Tower earlier. That's a very typical business we would look at. It's a super niche topic. A graphical interface for Git, loved by a lot of developers, but it's also a very small group.
Tim:It's also a small company, but it's a real love brand. And that that would be a typical one we'd look at because it's people who are very sticky. They stay with the product sometimes for 10 years. It's also a small ticket. So the the the price of this product is, like, €69 or dollars a year.
Tim:So people don't really worry about this. It's not a big it's not a big price tag, and that they stay for a long time and also usually propagates virally into an organization. Once one developer is using it, the next one is using it. And so we look at a lot of those metrics, and at but at the end of the day, all those metrics will tell us, people out there are very happy users of this product. And if there are chances that that's is a good product, of course, if we then later do our due diligence, we look at everything else, we look at how is the organizational set of the company properly documented, who we are employing and freelancers and those sorts of things?
Tim:Is is legal stuff proper? Is there some marketing setup? So we we tech, TechTD on quality of code documentation. We look at all of those things, but at the end, probably revenue and revenue oriented metrics give us the best idea, of customer happiness.
Arvid:I love this perspective. Like, do people love it? Well, yeah. If they love it, it will show in the numbers. Right?
Arvid:That's that's quite obvious. That makes makes perfect sense to me. It sounds like you're looking very much at at niche products or niche businesses. Like, would would you ever go for a company that has, like, higher aspirations that doesn't wanna be just just and I mean this in the best sense of the word, the the Gits graphical client of choice, but like the client for all databases everywhere? Like, for example, like, would would you go for these these bigger aspirational things?
Arvid:Or would you wanna keep it in some kind of lane, some kind of niche?
Tim:We we have some businesses which have the potential. Now the downside of businesses which have a which play in a very broad field is that they also have a lot more competition. I'll give you a practical example. Our portfolio, we have a CRM called pipeline, pipeline CRM. It's a great CRM, low price, especially for small and medium enterprises, doing a great job.
Tim:But but the CRM market is huge. There are hundreds of CRMs competing. It's a tough market and probably tougher than we expected. And so, yes, the company can have bigger aspirations, but there is always a big difference between aspirations and reality, and that's harder to grasp with this. We have some companies where from from a nimble beginning, we still have the feeling they can become something bigger.
Tim:Another example for the or an example for this would be scrape by API, scraperapi.com. We loved it because it's basically the it it it providing scraping with an API. So it's basically it's a developer approach to scraping very similar to what Stripe did for payment. And, the company was also quite small when we bought it, but we really like the super development folk developer focused approach. And there, we have the feeling that can grow into something bigger because getting data, access to data, and, yeah, packaging data in a way that people use it.
Tim:And the Internet is full of data, but it has to be delivered at some point. That's that's a broader mission and one where we can grow the company, and 2, but also the the broader you get, the the higher the competition. And we're not we're not venture capital companies where we expect companies to be funded with tens or even 100 of 1,000,000 over the course of their lifetime to then become unicorns. No. We're actually we're big.
Tim:We actually we like the term bootstrapper mindset. And a bootstrapper mindset is kind of profitable growth. You only invest what you make, but that, of course, also limits growth a little bit. But it we feel it's it's just a very healthy DNA of every company.
Arvid:Yeah. That that sounds like yeah. And instead of going for the unicorn kind of hockey stick exit and all the complexity that comes with that, you really just want sustainable revenue focused growth. That is that sounds that sounds like a very approachable thing. I think this also attracts the right people.
Arvid:Right? Both both in the sense of the businesses that you can get to acquire because there's, like, an alignment there, and I guess in in the employees that you hire to work on these things. That's that's really cool. I I would like to know, like, your hiring strategy really. And, again, you don't have to disclose everything.
Arvid:But, when we sold our business, not to you, unfortunately, almost almost, we always sold to you, we were using a technology that most people in the the company we sold to didn't understand. Like, we had Elixir as as our base framework. Right? Like, that was it wasn't PHP. It wasn't Ruby.
Arvid:That's stuff that people would have known. It was something more niche. Would you acquire a company that has some kind of esoteric or obscure technology and then hire for that, or would that be a deterrent for you?
Tim:Well, it it it might be a little minus on our checklist, but we would still acquire the company if everything else is right because you can always hire those people. It's not a big problem. Sure, you know, we we we love it if there's there's some standard stack. We also always have kind of a best practice, toolset, but that that's more for kind of the SaaS tools we use. So for example, I don't know, we would always use Usasnap for, UX research, and and so we have a stack of things which we always use for everything.
Tim:But when it comes to the actual programming languages of the of the tool itself, we're pretty flexible, and and then we just hire the right people.
Arvid:That's cool. That's that's that is, I I think, a great opportunity for people who are kinda more in these esoteric fields, right, as developers to to get into a bigger portfolio of interesting things and to get the synergy effects between different tools, which is really cool. And, also, it's, I guess, good news kind of for people who have chosen a weird stack to start with, because, you know, that's that's the problem. If you and you mentioned this earlier, all your eggs are in this basket, and you're not gonna refactor all of your code base just to make it sellable. Right?
Arvid:So you have to well, the question is maybe I should ask you, what do you do to make your business more sellable even? Or maybe it has an esoteric situation or maybe not. But what are the things that you expect in a business that comes to you or that you find that depending, what should they have ready to even continue the conversation?
Tim:So, I mean, first of all, revenue growth is probably profitable revenue growth is the strongest proponent of all. Then you can look over a lot of other things. But sure, there are a lot of housekeeping things. You could sum them up under the term due diligence readiness. So you're basing you, as a founder, you get a DD list.
Tim:You'll find them on the web. It's like, what do acquirers look for? And then you go through the list. And it's like it starts with HR. I don't know.
Tim:Do the freelancers have IP assignments? Do have people proper employment and sign noncompete. So very, very basic stuff which you can just do a little bit of housekeeping, and then it goes into tech. It's like, are the licenses proper, properly used? Is the is is the code documented?
Tim:Is the code quality monitored? All of that. And you can work on all of those things. And interestingly, all of those things are stuff which you should do anyway on your path to growth. Because the growth the the larger you get, the more, yeah, you you will have to make sure that all of those things are happening anyway.
Arvid:Yeah. Yeah. You have to keep your house in order to be able to eventually put, like, a a for sale sign in front of it. Right? Nobody wants to buy a derelict house.
Arvid:That makes perfect sense. And I I think that's I think the important part is to start early. Like, I I've I've always been trying to tell people, keep your account separate from the start. Right? Like, don't have your financials, like, mired with your personal financials and your business, and, you know, don't log in with your personal email, those kind of things.
Arvid:You can start on day 1 effectively if you don't wanna do it right. Okay. So let's let's talk a bit the about the process. So if people do the due diligence with you, how long does it usually last? Do you have, like, a with you guys in particular, like, how long do you usually take to look into somebody's, like, stuff?
Tim:Let me actually start a bit earlier because it a lot depends on the time before. So we have founders that come to us basically ready with all the materials. Everything is done. They've made up their mind. They might even have a broker, for better or worse.
Tim:And then that's where we start. Like, we have a founder call. We like the business. We quickly lay in LOI that's can be, like, 2, 3 weeks. And then we go into DD and to answer the question that that's probably 4 to 6 weeks, depending on the size of the business from LOI to, close the work pretty fast.
Tim:But the bigger question is the time before, like and and I I'd be also curious kind of your thinking there when, you know, you made your made up your mind. Do you want to sell? When do you want to sell? To whom? What is the price.
Tim:And that period is can be years or at least months. And and and that's why kind of I interrupted is because it sometimes overlaps with a deep, deep process. We sometimes see founders who were even not ready in their state of mind when they come to us. Others are totally ready, but a lot is like those processes overlap, and then also those housekeeping things overlap. They don't have their house in order.
Tim:We've had processes where this whole thing has taken almost a year. Crazy case. And I think it was very healthy for the founder to get out and just, yeah, also also focus, life and for other things, because it was a very painful process. Great company, painful process, but we have other cases where this process takes 4 weeks. So it really it depends a lot on founder readiness and on, yeah, already also is is is your household.
Arvid:Yeah. Okay. Yeah. Like, I I guess every business has its own story. Right?
Arvid:Every founder has their own background, and then everything that comes of that also is unique. I I get that. But 4 to 6 weeks plus however many years to found a needs, you know, like, that's that makes sense to me. Okay. That's that's that's pretty that's pretty fast.
Arvid:That that kinda that sounds like, a, you'd know exactly what you're looking for. Like, I guess after 20 properties, you you have it down. Right? You you have figured out what you need. And you also you just wanna keep going.
Arvid:And that's that's my next question here really is, like, what happens after that? Like, what how do you treat the businesses that you acquire? Like, what what happens to, I guess, the founder's baby? That's my own perspective, you know, as a founder having soul. Like, what happens to to the thing that you give out?
Tim:That's a that's a great way to put it. That's how we see. It's like it's your baby. You've you've, you've pawned it. You've, yeah, you've educated it and grown up, and now it's you're parting ways.
Tim:And, so so first of all, I think we our our intention at SoFi has also always worked. Our intention is always to to keep your baby and to to grow it further. So we keep the name, which to me also as a founder was always super emotional. And for Gabler, I'm still super glad that cedar.com is still cedar.com, which is the name I I, like, when I started the company almost 25 years ago. But also that also the other things that that the the business does isn't completely screwed up and, and that it's really kind of a more managed growth.
Tim:So what we actually do is during due diligence, we develop a plan together with the founder. This is where we want to take your business over the next 3 to 5 years. And sure, we can deviate from this business over time, but we wanna have a general understanding. And every business is very different. So we have some businesses where they have a too high cost structure, and we preserve the company and everything.
Tim:But we're like, hey. You know, we we have to, streamline the company. A few people have to go, here's why. We're adding some people in other fields potentially, and we want the founders and the team to understand why we're doing those changes. And and I can guarantee you, like, in 100% of the case, the company was better off afterwards.
Tim:Because, also, you you develop a certain blindness as a founder of, you know, you have your view, and, and it's great to have an outsider looking at any business. The same for us when we did a financing round. It was great to get challenged by outsiders, who looked at your business for the first time. So so developing that plan together on where we're taking it is is, the most important thing. There are other cases where the businesses are super bootstrapped.
Tim:There's like we've had businesses where it's just the founder and maybe one employee, and we're like, we have to get 5 people into this business as quickly as possible because this business, the bust factor in this business is just credibly high, and that makes us nervous. And so there's the other way around. So, sometimes we can even repurpose people from other businesses, but it's just we we want to have that hypothesis of where we want to take it, or is it is it product led growth, marketing, how those deliver? Is it pricing? Is it sales?
Tim:Is it internationalization? Every business is different, but that that's kind of what's fun for us but also what makes us, unique, I think, in a way that because we see so many businesses, we we can we can usually pinpoint to what a business needs the next step of growth, and that can, together with a founder, execute
Arvid:on it. That's cool. That is awesome. I I first off, I love that you're working with the founder. Like, so many, you know, so many people who acquire want the thing and they keep it for themselves.
Arvid:But the and, like, you know, the founder is the source of wisdom for the business. Right? Like, they know they know things that they don't even know they know. Right? This is the kind of tacit knowledge that they have.
Arvid:They they they might just be able to make a choice that you don't understand why they made it, but it's the right one. So that that is really cool. Do you do you usually keep the founders on? Is that is that contingent on on this on the exit?
Tim:No. It's not contingent. So for us, it's important to do what is right for the founder because we can't like, we don't wanna force anyone. There's that's also part of that decision making process, prior to a sale is for the founder, does he or she want to stay on board or leave? Or sometimes it's one founder leaving, the other one staying.
Tim:Sometimes they're, okay. Okay. I'm gonna do this for another year, but not that. So we have all sorts of things. I think we can work with everything.
Tim:In short, it it it has an impact on price. Like, we've had cases where the founder is like, I've burned out. Here are the keys. I'm out in 4 weeks. That doesn't really help the price.
Tim:We instant pair a fair fair but you can't do an earn out. And and, of course, that's it's a different case. But then we've other cases where the founders like, this is my plan. I'm gonna execute that together with you. I'm gonna put half of my, half of my proceeds from the sale into that earn out.
Tim:Well, that founder is really putting his money where his spouse is. And then, of course, we're able to be we're able to pay more. We can do everything and everything in between, and everything is fine. I think it's just important to be honest and be like, hey. What's what's my life goal?
Tim:How does it fit into this? And also be frank, not every founder should stay. We have had cases, where the founder was the real bottleneck, where other people took over and they were just a lot more organized, and the founders are great in this 0.21 or maybe 0 to 0.5. But afterwards, they were, like, out in their comfort zone, and we could bring other people in who could manage the business much better than the founder. Not every founder is a great leader in the long run, and every case is a bit different.
Arvid:Was there ever a situation where you you went into Didi and you you started talking to the founder and you noticed, oh, no, we could never do this. Like, we could not find the right people to do this. Or they're doing it so weirdly that it wouldn't fit into our portfolio. Was it did that
Tim:We have that. We have that. The cultural fit is important. So we have had deals where, like, after talking to the founders, or even working with them for for a little bit through the, we're like, this isn't going to work. It's like they're just they they they're probably all good people, but they just don't fit into SAS Group and how we view things, and it will be a constant battle.
Tim:And then, Eddie, my strong opinion is you should rather abandon any acquisition if there is no cultural fit.
Arvid:Yeah. For sure. Yeah. Because it's also not fair to the founder. Right?
Arvid:So you don't wanna pressure that.
Tim:No. No. Both sides aren't happy. And I think that was one of the reasons why we were attracted to your business, even if the the the topic was a little bit odd. I think as as people, you you're great.
Tim:Like, you would've like, there was an instant fit
Arvid:Yeah. That's true.
Tim:On on the cultural side. And and I think very often that's more important than everything else because you can you can pin the business and you can move things around as long as, you know, founders and and investors see eye to eye.
Arvid:Yeah. And and talking about investors, that's that's one more thing I wanted to talk to you about because I thought over the last couple weeks, we had, on Twitter and me personally, several conversations, around in, like, early stage nonventure, but still significant investment in bootstrap companies. Let's just say this. Right? So I I have a deal with the people at the Com Company Fund.
Arvid:So I'm now both, like, in in the fund as a as a business, and I'm a investor in the in the fund itself, which is kinda weird, but investing in myself. That's what they always say. Right? So, but that is kind of it's not VC money. It's not it's not an investment that expects, like, the the hypergrowth kind of stuff.
Arvid:So that's my personal situation. And I see a lot of founders out there looking for similar things, looking for some kind of angel funding maybe or funding that is bootstrapper compatible. Two questions. First off, what do you think about this kind of stuff? And 2, how does this affect if you're looking into acquiring a business that has potentially this kind of funding already?
Arvid:Because funding makes stuff harder. Right? Like, bootstrapping is great. You know exactly what's in the bank account. But if there's some other party involved, like, how do you think about this as a a potential acquisition target?
Tim:Yeah. No. I mean, it it can make the exit process harder. And we had cases where the founders were like, hey. Yeah.
Tim:They wanna exit. There were maybe 1 or 2 other investors who wanted to exit, but there was one investor with enough shares who were was able to block it, and it didn't happen. So you have to align, you have to align, the stakes much more, which is a different skill set. And so, to to your story, calm, for example, this the the this type of angel like long term, money, it's a I I love it. I love that model.
Tim:It's great. I think the market really needs that because there's a real void between what no money is and angel money, but then also VC money on the other side because the VCs, they VC money, don't get me wrong, is very much needed. I mean, I Oh, for sure. As one project, I'll either run a VC myself, which is a bit maybe a bit ironic, but it's it's in climate tech, which is my other passion. And there, you know, we're we we need huge we need huge amounts of money to decarbonize our our our economy.
Tim:A lot of this is not software. A lot of those things are huge facilities. You need 100 of 1,000,000. It's a very different field. VCs are very much needed.
Tim:We need even more money, in particular in Europe. US is is, especially with the IRA and the Biden is is a lot better off in this field, but but we need a lot more money in this. You can't bootstrap your company. It just doesn't work. In in SaaS, it's a different thing.
Tim:You can't bootstrap a company. It's a very conscious choice. Also conscious choice what you are as a founder is like, what's your appetite for risk, for example, as a founder? What is your appetite for hyper growth for, also dealing with VCs as stakeholders. And and they are really those those vehicles like Calm, they they play a really important role, and I think it's great.
Tim:So so, also to your question, if we look into a business and there's one of those knowledgeable investors in there, it would be positive for us because they also they don't mind an exit. I think it's great. It's more problematic if there if there are VCs in there where it's not aligned with the founders and that it often creates a conflict. Sometimes the conflict is good because it gives them the motivation to then sell. But also, we've seen that motivation to destroy companies, and at the end, nobody ended, ended up getting any money.
Tim:So classic prisoner's dilemma. That is bad, but but Calm would be a good example, and I think there should be more more out there doing this type of financing.
Arvid:Yeah. I I wish I would wish for that too. Like, the there's there are a lot of founders out there who could use it. And if it is a a green flag for you guys, then why why would it not be a good idea to to at least consider it. Right?
Arvid:Like, that's always the thing with these kind of things. You never have to do it, but it's it's good to good to think about. Wow. Well, like, if this was not a glowing endorsement of bootstrapping, I don't know what. Like, that is really, really cool.
Arvid:And I love this because you guys have bootstrapper mindset applied internally, and you wanna see it externally. I think you're very much in alignment with what what I believe and with probably what every single listener and and viewer of this this show believes. Like, that we could do it ourselves with a little help from our friends, but they are actually our friends. Right? That's the idea.
Arvid:It's a it's a community driven effort. That's so cool, man. Where can people find out more about you personally and SaaS Group? Where can where can people pitch their businesses? That's kind of the that's the question for real.
Tim:Can also ping me on LinkedIn, also with that email. Those are basically the main, web views. Used to be a bit more on x when it was still Twitter, but not not much more. So so LinkedIn or email is is pretty much the best way to
Arvid:Cool. I'll be putting that in the show notes. And, yeah, isn't it sad? Like, we we used to chat on Twitter back in the day, and now we're not. We don't.
Arvid:People are leaving the ship, but, hey, I'm still there. So, yeah, thank you so much for having this conversation. I I think it was it was just a nice view from the other side. Like, all of us founders, we always wanna know, like, what's going on? It's nice for you to share, like, what a successful SaaS come like, accumulator portfolio looks like and and what you expect and what you want.
Arvid:Thank you so much for having me chat with me. Really, really appreciate it. Thank you.
Tim:Thanks, Arif.
Arvid:And that's it for today. I will now briefly thank my sponsor Acquiredot com. Imagine this. You're a founder who's built a really solid SaaS product. You acquired all those customers and everything is generating really consistent monthly recurring revenue.
Arvid:That's the dream of every SaaS founder. Right? Problem is, you're not growing. For whatever reason. Maybe it's lack of skill or lack of focus or lack of interest.
Arvid:You don't know. You just feel stuck in your business with your business. What should you do? Well, the story that I would like to hear is that you buckled down, you reignited the fire, and you started working on the business, not just in the business. And all those things you did, like audience building and marketing and sales and outreach, They really helped you to go down this road, 6 months down the road, making all that money.
Arvid:You tripled your revenue, and you have this hyper successful business. That is the dream. The reality unfortunately is not as simple as this. And the situation that you might find yourself in is looking different for every single founder who's facing this crossroad. This problem is common, but it looks different every time.
Arvid:But what doesn't look different every time is the story that here just ends up being one of inaction and stagnation. Because the business becomes less and less valuable over time and then eventually completely worthless if you don't do anything. So if you find yourself here already at this point, or you think your story is likely headed down a similar road, I would consider a third option, and that is selling your business on acquire.com. Because you capitalizing on the value of your time today is a pretty smart move. It's certainly better than not doing anything.
Arvid:And acquire.com is free to list. They've helped hundreds of founders already. Just go check it out at try. Acquire.com/arvid, me, and see for yourself if this is the right option for you, your business at this time. You might just wanna wait a bit and see if it works out half a year from now or a year from now.
Arvid:Just check it out. It's always good to be in the know. Thank you for listening to the boost of founder today. I really appreciate that. You can find me on Twitter at avidkar, a r v e r I k a h l.
Arvid:You find my books and my Twitter core stat too. If you wanna support me and this show, please subscribe to my YouTube channel, get the podcast in your podcast player of choice, whatever that might be. Do let me know. It would be interesting to see and leave a rating and a review by going to rate this podcast.com/founder. It really makes a big difference if you show up there because then this podcast shows up in other people's feeds.
Arvid:And that's I think where we all would like it to be. Just helping other people learn, and see, and understand new things. Any of this will help to show. I really appreciate it. Thank you so much for listening.
Arvid:Have a wonderful day, and bye bye.
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