Eran Galperin
speaker
76 appearances
1 recordings
1 series
first heard Aug 2024
last heard Aug 2024
Eran Galperin’s voice in public audio — every appearance, attributed to the second.
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Appearances
When it started, I initially, first of all, the language that they use in a lot of this inbound is very vague. I didn't think it was about buying the company. I thought it was venture investment, basically. They talk about growth equity, like we said at the beginning. At that time, I didn't know exactly what that meant. It's like, oh, are you interested in growth investment into your company?
I'm like, no, you know, I'm bootstrapped. Not interested in that. Eventually, one of them actually used direct language. And I'm like, okay, interesting. I think we're too small, but let's talk and see where it's at. And we were too small at that time, but I started to get a sense of how things might go.
And between 2021 and 2023, I must have taken close to 40 calls with different private investors, search funds, all sorts of different constellations. And I really got a pretty good lay of the land as to what a potential outcome might look like and at what revenue numbers it would make sense to sell. And I started having this kind of mental funnel in my head.
It's like, okay, if we hit those benchmarks, maybe it's time to start thinking about running a process.
That's definitely an option. And some people do this, but I started to feel some burnout. Even in 2021, I ran the company with a bootstrappers mindset, always hiring maybe a couple of steps later than I really should have because I'm optimizing for profits. It's really hard to disconnect the revenue going into the company from your own finances, right?
At the end of the day, anything that's left over in the company is your revenue personally. And I was doing a lot, just maybe doing too much. I was feeling burnout. And at some point, it's like, you know what? I would be happy to take a step back and let somebody else run the company.
There's also, you know, when you're at a smaller scale and you self-select for the customers, everybody is nice and it's a pleasure to work with. But as you hit a certain scale, the small percentage of people that, I can't think of a better word, just nasty people, and you have to deal with them,
And it gets to the point, those people are above the level of even, you know, a full time customer service person to handle. It leaves a dent in you. You know, it always feels like they're going to ruin your company's reputation. We had people like trash us and all the social media channels for the pettiest stuff. I have stories that just make my blood boil when I think about it.
And it's like, I just don't. want to deal with it. There's this emotional connection as a founder CEO that maybe a professional CEO would not have because they didn't build the company. They don't feel it in their bones when somebody is just saying nasty things about them online. And yeah, I just wanted to kind of remove myself a little bit from that.
So because we received so much inbound interest, I did really have a lot of insight into where an optimal result might happen. And it did seem to really funnel around female in an ARR. That's where a lot of the bigger players that can actually pay the big multiples start getting interested. At the lower ARR, it's... There's definitely interest, but people would try for bargain.
The multiples are lower. The terms are not as good. And I saw a very direct line to that number. With our growth numbers, I was running this kind of projection P&L where If we continue at the same pace that we've been growing and add a little bit to it every few months, and it ended up being almost to the dollar accurate all the way up to 3 million.
So as long as I was continuing with the trend that I built there, I'm like, you know what? I'm good. I don't need to sell now unless I see like crazy warning signs. And by the way, those crazy customers, those were the warning signs. Like, is this it? Is this where I'm like taking a... Tumbled down the death row for the company.
That did make me wonder, maybe it's time to sell now before I really run into that customer that tries to ruin our business. But yeah, as long as we kept on that trend, I'm like, I could see the path. It didn't seem too long. So if it was like five years into the future, I would not be able to do it. But it was about two years into the future.
I'm like, I think I can hold on for that and have a life-changing outcome there.
Yeah, the process was much more stressful than I anticipated. And it's mostly psychological in its core. First of all, it's a very technical process. That's another thing that I didn't anticipate. Everybody reads about due diligence. It seems like a very straightforward thing. You just provide the documents for the company. You let them look at your code base. And you're done. And it's all great.
But it's actually so technical and complicated. There were times during due diligence, and it's mostly around stuff like taxes and company structure, that the other side's legal team would just disappear for like three, four days a week looking into something. And I'm like, is this a big problem? Is this a small problem? Is this taking down the deal? I just have no idea.
And this kind of like ambiguity where you have no idea if
things are going well or not for weeks at a time it really gets to you eventually and it's a lot very minute things written in some contract from three years ago and it's like is this a problem it looks so minor is this really a problem and they're like we don't know we're gonna need more time to find out it's like sounds bad you know but you just stick with it eventually you get food due diligence and then you have the purchase agreement aspect
I thought once we're done with due diligence, like we're done, you know, we just need to sign the contracts and get on with our lives. But hell no, that was just half of the process. It was crazy.
Yeah, you just don't know those things. Luckily, I had Einar to provide some emotional support. He told me that basically his role once the process starts is to be therapist for the founders. And it pretty much ended that way. Every time I would go to him, it's like, how big is this issue? It's like, don't worry, it happens in every sale process.
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