SaaS Interviews with CEOs, Startups, Founders
The Capital Efficient Founder: $2m in, $12m dividends out, Just Exited
23 Mar 2021
Chapter 1: What is the background of the guest and his recent achievements?
the business grew from 7 million, I guess, five to seven. And then last year we did 20 million making six.
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And you'll get interviews three weeks earlier from founders, thinkers, and people I find interesting. Like Eric Wan, 18 months before he took Zoom public. We've got to grow faster. Minimum is 100% over the past several years. Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise.
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My guest today is Brad Miller. He's a serial entrepreneur who successfully bought, built, and sold several companies with extreme capital efficiency. Most recently, grew awareness technologies revenue 400% organically and through acquisition with a 37% EBITDA margin with investors making a 9X ROI.
Previous to that, he built Silver Sky from startup to $60 million in revenue with $10 million in EBITDA. After recapping the Goldman Sachs at $150 million, it was later sold to BAE for $250 million. million. This guy knows what he's doing. Brad, you ready to take this up? Sure. Shoot. Tease people first.
We already interviewed you several times as you were building awareness technologies, but quickly talk about the capital infrastructure behind awareness tech. So did it start off as a search fund? How did you get the deal done?
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Chapter 2: How did the guest structure the initial deal for Awareness Technologies?
And they kept hoping for some big deal to close, and it didn't, and they needed to get something done. And the VCs had guaranteed a $2 million emergency line of credit that was due at the same time, and they didn't want to make good on it.
So we were able to basically buy it by taking over that $2 million line of credit and then pay the investment banker fees and lawyer fees that they couldn't afford to pay because there was no cash changing hands.
Yeah.
And so fast, so fast forward to, you know, pre pre deal. Did you guys still each on 50% and then how much debt was on the books?
So, yeah, so no, I, I had a 10% option thing that I had exercised. We had also taken out 12, and a half million of dividends along the way. And so we were both already in the money, if you will, on our original investment. The two acquisitions weren't financed with equity, they were financed with debt. So we didn't put more money into the business, we were only taking money out.
And so yeah, at the end of the day, you know, we had maybe six or 7 million, well, we also had four or 5 million of cash on the balance sheet when we did the deal. So net debt, we probably had a couple of million. Yeah. Yeah. We were very, we were very cashflow generative. As I said, we made 6 million that last year.
And so, yeah, we probably had, we probably started the year with 9 million of debt. We probably paid off, you know, a million or so. And, but we had 5 million of cash on the, on the books from that year. of pure profit zone.
So what was the sale price?
Well, you can sort of backwards, and I'm not sure I'm allowed exactly to say, but like I said, the combination of the dividends and the price was just shy of $50 million.
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