Thriving With or Without Funding (Acquire.com)

[00:00:00]

Andrew: People, I, idolized and admired and now they're, you know, supporters of my company. So it was, it was very humbling to have them want to invest

Jason:

This is funded a show where founders who raised millions in venture capital share the gritty side of what it actually took to get that money in the back.

I'm Jason. Yay. Not too long ago. I was trying to get my ideas funded. And back in the day, I was a VC listening to founders, pitch me for money.

If you only know me as the host of a podcast called funded. You might think, I believe raising venture capital is the only true successful path forward. But that's just not the case. There are numerous paths to success that don't involve outside capital. And I'm a huge fan of all of them. For those of you who do decide to raise, make sure you check your intentions. [00:01:00]

Is it because it feels like the right thing to do for your business. Or is it because you associate success with being venture backed? This isn't an ivory tower criticism. I point this out because I know firsthand how easy it can be to associate being bigger with being better. To chase the path that feeds your ego and not your soul.

Andrew goes Decky founder of acquire.com knows a lot about only raising from VCs when it's the right move for the business. He bootstrapped his previous company to a significant exit. And acquire.com. Well, It's a marketplace to help entrepreneurs sell their small businesses. Most of which have not taken a dime of outside funding.

In fact. A lot of Andrews marketing, dissuades entrepreneurs from raising money. Rather than viewing VC dollars as a shortcut to success, he emphasizes the significance of creating a business of value first. Andrew's belief is [00:02:00] by focusing on the foundation of delivering value to customers. Entrepreneurs can set themselves up for long-term success with, or without venture dollars.

And as the saying goes. You can't build a skyscraper. On a shaky foundation.

Andrew: I was always kinda like, I guess you could say hustling. I had, like, I did all the, the typical cliche stuff. when I was younger, like at EBS store when I was like 13, uh, you gotta be 18, actually be on eBay. I was selling

Jason: I was bending the rules.

Andrew: yeah.

Um, I had a number of just different, like I was always just, I guess, just figuring out ways to make money.

You know, I grew up in a town called, uh, San Clemente and it's a, it's a really nice area, beautiful area,

but,

I didn't really grow up with [00:03:00] too much. and I go over to my friend's house and, uh, just see like huge mansions and stuff like that. And, uh, you know, right by the beach. Amazing place to grow up.

But, um, you know, I think, what, really instilled entrepreneurship in me was, um, you know, entrepreneurship now is super trendy. It's, you know, everyone wants to be an entrepreneur. Everyone wants to start a company and I think that's awesome. Um, but for me it was just out of necessity.

I, you know, I needed to make money to buy, you know, stuff. I wanted new skateboard, whatever it was. Uh, so yeah, I mean, I, you know, thinking back, you know, I was kind of a troublemaker, God, I got in trouble, nothing with the law or anything like that, but, um, You know, I, I grew up skateboarding grew up, always was some sort of idea or something.

And then, uh,

like

other things,

Jason: Where were you shy? Growing up?

Andrew: I wasn't like the most, um, I'm like [00:04:00] half introvert, half extrovert. I think I've always kind of been that way. Uh, so no, but.

Jason: we were afraid to make the ask, I guess, is what I'm getting at, you know.

Andrew: No. Never, no, never, never, never, never. No. I always say, I mean, the answer is always no, unless you ask. So I was always asking, I was always asking questions. I was, oh, I had, You know, when I go over to my friend's house, I'd always want to talk to their parents and be like, what do you do? how did you, become so successful or something like that?

Um, I was always very curious. I still am today. I love learning. that's probably my favorite thing is just diving in on something, I guess. You know, one thing I'm really grateful for is I, found my passion, I guess, really early in life, which was just business. just kind of the rush of when something works or you, sell something, on eBay or, you know, these were, when I was a teenager and then everything kind of just [00:05:00] progressed from there, but I'd say you just, I've, I've always kind of naturally

been good at sales and maybe that helped. I don't

know.

Jason: Yeah. No I think, the background that you have is different. Some from some of the other people I've talked to who have come from technology and, software and building things that require a lot of, time and effort in the beginning before they can even start selling. But your background is with eBay.

You know, you started an eBay store. And so the moment you start an eBay business, you're selling and you're generating revenue. And so when you say you found your passion, it sounds like you found this passion for business, probably this idea of like solving a problem and getting, extracting value out of that.

And so your path into business, maybe didn't lend itself to thinking about raising outside capital right away. Can you tell me a little bit about your first experiences with business and whether or not this idea of like bringing on [00:06:00] capital, even hit your brain or when that became a concept to you?

Andrew: I mean, I was a teenager. I didn't even know what raising capital was. So, for my first business, uh, it was a company called Bizness Apps like my first real, business with employees and stuff like that. we only raised a hundred thousand dollars. and even that felt like an enormous amount of money.

I was 21 at the time.

Jason: Wow.

Andrew: but.

Jason: Did you raise that from?

Andrew: Uh, two individuals, Robert Strazzarino and another individual named Christian Friedland.

Jason: Got . It.

Andrew: they were basically just two entrepreneurs in my college town. I went to CSU Chico state, um, and they were great mentors. And I learned probably everything I know about

business, from them. They were, super hands-on. They didn't make a lot of angel investments. And so that allowed them to spend a lot of time, uh, really helping me shape the business. at one point we were doing daily [00:07:00] updates and then cause the business began growing so fast. Like every day was kind of different.

And then we moved to like weekly, monthly, and then quarterly, So, yeah. And then just long story short on that business. ran it for about eight years and then, um, it was acquired when I was, 29 and, after that started, crpto company for some reason. I literally started building the company while my first business was, in due diligence and then jumped Right.

in and, for anyone

listening. And if you

sell a biz, yeah. I don't recommend that because you don't get to like celebrate the win or anything like that. I've literally went from like one challenging problem company team to manage to another more complex, challenging problem team to manage. but that's what I enjoy. I mean, I just love building businesses and,

Jason: So-so business apps. I mean, you did raise a [00:08:00] hundred thousand dollars, but that was like two different angels. Like I wouldn't call that raising massive capital. So for all intents and purposes, that was, that was a bootstrap business. And you ran it for, I guess, eight years before selling it. and this next business, uh, obviously just kind of

monkey barring from one to the next. Also you didn't wait for outside capital or you started building it.

Andrew: well, so for the crypto business, we ended up raising 700 K for that. So just like a small jump up

but I put, a good amount of money into that business before raising capital. I've done that with all of my businesses is all typically put in, at least enough to get the product market fit. Uh, like at business apps we were generating, I believe, I dunno, let's call it like a hundred K years, something like that. And that was self-funded through a different business, which was a mini job That I had created that gave me like some unique insights. There was a job board that connected mobile developers with [00:09:00] businesses, and I kept seeing the same job posted over and over and over.

And so I just saw like, oh, let's make a template and then I could sell the template.so I sold that job board and use that as initial seed funding.

Jason: right. I, and I think that's actually a good part of the conversation to get to, because, so you start MicroAcquire and, I've been a follower of yours for a while now and have watched MicroAcquire, kind of um, just come out of the ground, running with a really, really strong voice around what it means to serve businesses and what you need to start a business and what you don't need to start businesses.

So when you started MicroAcquire, did you think it was going to be a large venture backed business, or were you able to see the sort of initial strands of, um, a profitable business or, or a self-sustaining business from the get go. Like, how did you think about MicroAcquire as you were starting

it?

Andrew: Yeah, good question. Um, so the answer to that would be now [00:10:00] I actually started as a side project. I kind of just looked at the market and. I saw zero innovation in terms of, acquisitions. Uh, my two previous businesses finding a buyer was the hardest thing in the world. And so I thought there had to be a better way, something specific to start up something specific to

SAS. And I just couldn't find anything in the current solutions and optionality for say smaller businesses, let's call like 10 million or less revenue. You'd have to pay like a business broker 15%, which is like a small seed round. So I looked at that and I'm like, okay, if it really felt like a, like a wealth front, you know, financial advisors situation where, a lot of the parts of an acquisition, you know, they're very complex, but it's all manual.

A lot of it happens offline. And so I thought, you know, what if we made a [00:11:00] marketplace where, we remove the middleman and we have that buyers and sellers connect directly. So I kinda just thought to myself, you know, as I was selling, Bizness Apps, you know, if, if I just wanted to sell the business and find buyers immediately, like what would it take for me to list a business on a marketplace? And, uh, yeah, so I was just scratching my own itch and then it just took off, but by no means that I started thinking like, I'm gonna change the landscape of M&A, um, you know, I kind of was just dabbling at first. And then as it started picking up, I really saw just how, cause, you know, when, when you put something out into the world and then a lot of people are like, oh my gosh, like.

Thank you for building this. Like, I can't believe is doesn't exist yet. you, you start to get this real feedback from a large amount of people and it's very consistent. And I think that's a, a good way [00:12:00] to, you know, kind of, not push all your chips in all at once. You know, I kinda, built It

myself, generated. I think we got to let's go. 600,000 annual recurring revenue, um, before taking any outside capital.

Jason: wow.

Andrew: So there was,

Jason: So this was, this was still a side project. You said you had your you're scratching, this itch, you knew it was a challenge because you know, you, you sold a company before and you felt that disconnect between buyers and sellers.

but talk me through a little bit about that. The momentum as it was building, like throughout probably just a landing page or something that represented this idea, um, how did you go from that to 600 K with zero money?

Right.

Andrew: No actually. So I did the opposite of what I would recommend. I overbuilt the marketplace because my thought was, if I was going to really, you know, if a startup was really going to list on a marketplace, I kind of needed to out startup [00:13:00] them if that is like a term where, you know, it looks beautiful, the user experience, you know, instills trust.

And

Jason: Uh, you wanted them to feel safe.

Andrew: yeah. So I really invested a lot in, you know, the initial prototype or the initial MVP, if you will. And, uh, had no business model at all, everything was completely free. You could sign up. He started talking with sellers immediately. we did that for about a year, so. Basically all customer support all listings vetted by me, every single newsletter written by me. Uh, what else? Product, man. Everything was ran by me for, yeah, about a year and a half, but it wasn't like work. I mean, I just enjoyed it so much. I'd wake up from like four to, like I'd work till like midnight, every single night. And then I'd wake up like super excited to cause I wake up and then I'd see these really, really interesting, companies looking to sell and, most of them are bootstrapped, you know, they were, you know, [00:14:00] self-funded and

they were

Jason: just want to pause and say, say like, you're about to talk about these entrepreneurs and their excitement, but as I asked you about it, and as you were talking about waking up early, like just that smile, that creeps on your face and sort of a light in your eye that that's, it's a really special thing to see and to hear right.

You didn't need capital. You weren't making money necessarily, but you saw the problem that you were solving and it feels like it's something that really lights a fire. And I think that's kind of what drives a lot of great entrepreneurs.

Do you feel like you're always chasing that or is that just something that is kind of natural to you?

Andrew: I'd say, you know, well, before I started MicroAcquire, I kind of use this like a framework and it, it started with the customer. So I'm a big advocate of, you know, you have to love the customer that you're serving and you have to love the problem that you're trying to solve. [00:15:00] Otherwise, it's just gonna be, it's going to feel like work, and then you're going to be competing against someone.

that it doesn't feel like work and they're going to work twice as hard, twice as fast, uh, and maybe with a little more love and, you know, like they really, really want this problem solved and that's just basically built like my video game or like, yeah, I want to go play

Jason: that's a great quote.

Andrew: and

a

and it was just such a cool business.

Cause I got to look at startups all the time and I'm kinda like, I always joke where I say, you know, some people like to play tennis or, you know, whatever on the weekend I like to play start-up I like looking at different startups. I like to read different business books. I, you know, that's, that's what I am wired to do, I, I guess in a

weird way. Um,

but,

but,

Jason:

uh, so what I was going to say is, as you were launching MicroAcquire, I can't even remember why I came across you on Twitter. Uh, but I started following you [00:16:00] on Twitter and, seeing the content you were putting out and having been a venture capitalist, myself and a venture backed founder, who then transitioned over to, um, after my last company exited, knowing that I didn't want to raise money for my next company.

I had seen all sides of this conversation around what types of startups, venture capital and their venture capital bootstrapping, and you came out loud and proud about, what it means, to start a company and what you do need and what you don't need to start a company. And very specifically talking about how venture capital wasn't the answer.

It's not the answer. It's not always the answer. And I don't necessarily, I definitely don't think these are mutually exclusive thoughts having that thought and then also raising venture capital. But I wonder if you could talk a little bit about this progression of building something that you love, just because you wanted to scratch your own itch and then finding out there is revenue to be made and then getting to a point where, [00:17:00] you know, you're building this great bootstrap business and you realized, huh?

Maybe I should raise money or huh, maybe I need to raise money. Can you talk about that transition a little bit?

Andrew: Yeah.

uh, so we've done three financings. do you wanna hear the story of the first one?

Jason: Yeah, definitely

Andrew: So I have a template that I've sent more than a hundred times to just different investors. Like, Hey, please follow up in like four to six weeks. I'm like super busy, but really appreciate the support.

I'm sure if someone the same, this has maybe gone that email, but, um, I, I had zero intentions of raising any capital. I didn't, you know, it just hadn't, it really wasn't like my plan. but, uh, I met with, my first investor, Jeremy Devine, who I had known for. I met him about seven years ago during introduction.

Um, from my first angel investor, Christian [00:18:00] Friedland uh, we went to In-N-Out and got burgers and I randomly asked him about some of his favorite investments. And, he's a very humble, smart, just, I can't say enough good things about the guy and, uh, the story goes, I, you know, we were circling around like a small seed round, and then I was like, ah, I don't want to do this.

it's not enough capital to really, cause what I wanted to build was a pretty extensive, like I got to a point where I realized to really build out the product vision. This is going to be capital intensive. Otherwise it's just going to be a deal full platform, but we wanted to innovate on things like legal doc creation.

We wanted to . Make due diligence easier. So you can assess the health of the business easier. You can look at revenue expenses and kind of stitch together PNL. Um, we wanted to make transferring assets easier. Like all of these are or could be different companies. Like the products are so complex, [00:19:00] uh, financing, escrow, You know, like really re rethinking, you know, how acquisitions, in the lower end of the market are done.

And so I kept pushing and again, it's just me, it's literally me and I had one person to help with customer support and which I just kept going. And, uh, . We were going to close a small seed round. It was like a 200 K investment. And I just said, nah, I'll just fund it myself. So I wired 200 K from my personal bank account.

I did this. You could probably pull it up, but it's a funny tweet on the MicroAcquire Twitter account, I wrote like we just closed our seed round from Andrew Gazdecki and, uh, it was like $200,000 from my own account to continue funding the business. so I invested quite a bit of my own money just to you know, [00:20:00] really just building out, um, you know, really finding product market fit and continuing to grow both sides of the market of supply and demand and, really just kind of feel out how big of an opportunity was this. And as every month went by, it became more and more obvious that, this is, this could be something that could help millions of entrepreneurs across the world.

Jason: When we come back, Andrew tells us the story behind his first round of funding that wasn't from his own piggy bank and how it came into play.

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Andrew's been focused was always the business. He never really spent a lot of energy on fundraising. If anything, he avoided investors and ran the opposite of a process. Whatever you was doing well. It was working

Andrew: So. after, you know, turning down Jeremy, the first time, he just said, Hey, let's catch up in like two weeks. And I, so I've also never made a pitch deck. so we just get on a call and I just walk them through kind of my thoughts on the business and where I think it could go. And I'm thinking about. You know, kind of like, we want to build like the Zillow of M&A, if that's an analogy and, uh, just on the spot, he just was like, this, and we'd love to work with you. can we just invest 2 million at XYZ evaluation, which was, we negotiated a [00:22:00] 2.2 million for 10% and that was it.

And I was like, okay, And then we put that money into digital engineering resources, to continue building out like the marketplace and the product.

Jason: Yeah, but before we continue, because cause you ended up building much more and attracting more capital, uh, I think the easy thing for an outsider to hear is like, oh God, this guy just didn't even build a deck. Didn't do anything. And, and was able to raise money without even trying, like maybe, maybe I can do that.

And so like, it's really easy to say it happened really quickly, but you're about to say, I want to get your reaction to that. And what you about that

Andrew: yeah, so here here's, what I would say is if you want to raise capital, ask for advice and if you want, um, uh, what I'm saying, the

phrase wrong.

Um,

Jason: at, you know, sometimes when you ask for advice, you get [00:23:00] capital and sometimes when you ask your cap, most times when you ask for capital, you

get advice.

Andrew: yeah, so my focus was so much on building the business and not on fundraising. It was almost zero on fundraising. I was focused entirely on moving the business forward. So I'd create what I'd call momentum decks, or just traction decks where, you know, user counts, like, but I wasn't like outlining the problem or anything like that.

Like if it wasn't obvious to you, then, you know, okay, I'm not going to explain, I'm not going to sell you on this. Like, this is basically, you know, how fast we're growing. This is kind of like the numbers that I'm seeing. Um, so I would say, you know, the best way to raise capital and then. Building in public really helps a lot too, because, you know, that's another way of just kind of like, yeah.

I didn't make a pitch deck, but you kind of make a pitch deck because you're introducing your company to someone for the first time. But I was showing, you know, revenue [00:24:00] numbers, like from 200 K I still do, just to inspire other entrepreneurs and show them like, you know, Hey, you can, build something out of nothing too.

Like, um,

Jason: And I think what's really important is that you met Jeremy, you said seven years before he invested. Right. And he's been watching you build businesses and sell businesses. and so what you said is, exactly right. It's like a lot of founders when they need to raise money, have to build. Big like a really great deck because they are rushing into the game and need the money.

They're about to go out of business or whatever, and they need to be able to onboard and investor to understand what they're building and who they are and convince them as quickly as possible to be able to get them comfortable enough to raise money. Whereas. You were focused on the business. You happen to meet investors along your journey.

And when it came time, this investor is seeing an opportunity and I'll tell you there there's nothing that excites an investor more than hearing now. [00:25:00] So the first time Jeremy trying to invest and you're like, ah, you know what, I'm just going to fund it myself. And then he hears more progress and more progress.

Those are the deals that investors will fight to get into. So, um, yes, maybe, I guess it sounded like it happened quickly, but you know, it's a lot of work and a lot of company and relationship building that, that went into that. So

Andrew: Yeah, no, I, completely agree. I think I oversimplified it, but yeah, I think it just, it rings true in terms of, you know, and I think . Even after you raise funding, your focus should like, I hate the term. the number one thing a CEO should be doing is always be fundraising. And you should really be always trying to improve your business, like build a great team, have an awesome culture, make sure everyone is aligned in what you're doing.

being a good leader, growing the business, creating happy customers. When you focus on those things, everything just kind of takes care of itself. But,[00:26:00] you know, I talk about this a lot, openly, but I feel, you know, when all you read about is big fundraising headlines and like, you know, XYZ company raised 50 million, then a day later they raised like a hundred million.

It's like. It skews entrepreneurs to think that, you know, to be successful, you have to raise a bunch of capital and that's really, what valuation and all these vanity metrics that really do not matter. you know, it creates an environment where people are more focused on fundraising than actually building, a business of value.

And So I think just having the focus of, and even like, now.

like I'm still completely, working just as hard, just as much, because I still love what I'm doing, um, more

than never,

but Yeah, But now I get to play with a bunch of friends. Um, you know, cause we've obviously expanded, but I think, I think that's one thing that, you know, has, and that's why I've been [00:27:00] so outspoken about, my thoughts on not raising venture capital.

Like I do not. I think 99% of entrepreneurs should avoid venture capital at all costs. and I'll give you two reasons why, um, number one, it just depends on your goals. Like, I truly believe a lot of entrepreneurs just wanna make, you know, they want to be financially secure. Um, and the best way to do that is to bootstrap a business because I think the stat is like 98% of acquisitions are under $80 million. So just do the math on that. And then, out of the companies that do raise capital only 1% become a unicorn. And actually, I don't, I think that's just to a unicorn, but unicorn like acquisition or IPO, I don't know the stats, but let's just assume that. 10% of that 1%. So you have a 10th of 1% to get to a liquidity event if you [00:28:00] raise capital. So statistically, if you raise capital, your chances of making any money at all, go down dramatically, especially if you raise a bunch of capital, the more capital you raise. Uh, your buyer pool goes down because there's only so many people that can acquire a company for not people, excuse me, companies that can acquire a company for billions of dollars.

And then, you know, you have to get lucky along the way, like you have to have flawless execution. but if you just like, for example, I'll use MicroAcquire a, as an example. You know, if I had just bootstrapped it and just kind of kept it as like a simple, less advanced deal flow platform. I'm still adding a lot of value for a lot of people.

And I'll be in a lot of entrepreneurs. I could sell it whenever I want. but I wanted to, you know, really build out something that I think would change acquisitions for entrepreneurs all across the globe. And, um, that was really [00:29:00] kind of the mindset shift of, you know, Hey, this, if I really assembled a team to invest in all of these different products, I think we could

build something really special that can impact a lot of people. So,

Jason: Yeah. So, so actually that shift in mindset, this is something dig into because the first raise you talked about was. You know, you wanted to build more, but like you're having fun. And so you'll just fund it yourself and some people want to invest, but you don't need their money. You'll just fund it yourself.

And then you end up taking venture capital, which, which does change the game. Right? So now you are on the treadmill and you know, that you need to get to this next proof point. Can you tell us a little bit about when you went out to raise the next time? Was it any different, how did that set of occur and what was going through your mind then?

Andrew: Yeah.

Good question. So. We originally thought we could build out our entire product roadmap with the capital that I had on hand. [00:30:00] Um, and so the original capital raise was, um, like two and a half million, which is a lot of money. but to really be the products we're building, you know, we needed separate teams for each.

and so the second capital raise, we went. Um, it was really just other investors that were users of MicoAcquire. They had asked to invest and so, um, the second fundraise, I think it was about over a year ago. Um, I just reached back out and said, Hey, we're looking to raise a little bit. Like, I think we started with an idea to raise another 2 million, and there was so much interest that we went to. I think it was five and they were all MicroAcquire users. So I kinda got lucky. There were, you know, my, customers were angel investors and venture capitalists and successful startup [00:31:00] founders. So that made raising capital very, very easy, because they had used the product and then also their investors themselves. so that, period that happened from initially, you know, reaching out to say the first investor, I can't remember who the first one was, but, um, it took about a week to fully, um, you know, fill the round if you will. and again, it was because I think people really wanted this to exist. They were all startup founders.

That second round. I focus the majority on, you know, entrepreneurs, for strategic purposes. One for, you know, access to additional shown deal flow. and then to just, you know, you're building a company, you know, I'd love to learn from you. And I get a ton of really great advice from my investors, which has been amazing people I look up to, you know, people, I, you know, idolized and like admired and like now they're, you know, [00:32:00] supporters of my company. So it was, it was very humbling to have them want to invest and, um, use that, capital to, again, expand. engineering and operations.

Jason: is this when you were able to bring on, um, some of the, A Lister angels that I see in your cap table, we'll pump Naval, Sahil, Ryan Hoover

Andrew: uh, so Naval came in the first financing was with, uh, Jeremy Levine, Naval, and Andres Klinger. And then the second financing was like the big sort of group findings.

Jason: got it. Got it. And is that people finding out about your company via Twitter and wanting to, you know, sort of reaching out and wanting to invest? Or did you go after them?

Andrew: A mixture of

both. So word gets out kind of quickly. but I did reach out to, I have a list of people that I admired and I thought could add a lot of value to MicqoAcquire. And so I just reached out and said, Hey, we're [00:33:00] I'm, Andrew, I noticed you use MicroAcquire. We're looking raise additional capital.

Um, I'd love to have you on board and it kind of just had a snowball effect,

um, from

there,

but.

Jason: and saw some it, one thing I'll point out is, uh, you got really lucky. you're in one of two categories. So you're in this one category of businesses that venture capitalists know very well. So one category where there are multiple, unicorns multi-billion dollar companies. His note taking apps.

There's like a, there's a weird, a glut of multi-billion dollar note taking apps. And the joke is that, well, venture capitalists, when they see someone pitch a note taking app, they understand it. They're like, oh, this is a problem that I, that I have that I want to, you know, fund, uh, it turns out there's another one which is buying and

selling companies,

So there's this funny joke about venture capitalists, um, and it's reflected in the number of. Billion dollar note taking [00:34:00] apps. There are, it's like if a venture capitalist really truly understands the problem, they want to invest in that company.

And it turns out like one of the only categories that venture capitalists really understand is note taking apps. That's why notion and Evernote and, and roam and all these companies that raised hundreds of millions of dollars. but it turns out you landed in a second category, which is near and dear to a venture capitalist heart, which is seeing companies get acquired.

And so you just landed in this great place where VCs will use your product on the side, see companies, they know, use it on the side and, um, really, really want to invest. So it's really, it's, it's very cool that you've been building this product.

and then you raised one more round of capital. Is that right?

Andrew: Yeah, so that one. but to your point too, there was, I mean, if I'm just thinking through, you know, the reasons to invest in MicroAcquires, you know, let's say you're an angel investor or a VC fund. [00:35:00] I've helped some of my investors portfolio companies

sell on MicroAcquire. So they almost get the return back from, you know, selling companies on MicroAcquire, and then I've had.

some of my investors buy multiple companies on

MicqoAcquire

so it,

I definitely did get lucky there. So, um, maybe next time I'll build a, a new note taking app into it the end of MicroAcquire and just go crazy. Um, Yeah.

the second fundraising was, um, prompted by, Shrug Capital.

We had a call, um, one of my favorite firms, that had been Moshi, and, uh, they just offered, they wanted to put in a, what they call just a core check. And I said, sure. And then I went to Jeremy, got his thoughts and said, um, what's your thoughts on maybe raising. another [00:36:00] round of capital, so he can really hit the gas.

Cause I identified a few areas, where we could really expand, you know, our cause we have four ways that we make money at MicroAcquire I really wanted to hit the gas on too. and so basically they prompted the raise and then. All the other investors in that race were, existing investors from the previous round.

So I believe only one new investor came into the third financing. Yeah. one new investor and then the rest were, just insiders doubling down on their, existing investment, into MicroAcquire. So, and I think that happened because number one, they saw the progress I was making and, I always try to do my best to give really detailed monthly updates with, you know, how everything is going, how many acquisitions.

the volume of acquisitions, how many users are signing up? how is revenue doing? And so I [00:37:00] think, that happened over, uh, Thanksgiving week, and I believe only, 10 or 12 investors were involved in that. so again, I just reached out to existing investors saying, Hey, we're going to raise a little bit more money, to invest here, here and here.

Jason: Yeah.

Andrew: they were all interested in, it, it went pretty smoothly, so I've, I've been pretty

lucky in

terms of,

you know, I guess venture

capital

found me, um, rather

than

the other way around

Jason: Yeah. I think again,

what might be easy for someone to do is just kind of. Be annoyed at hearing this story because of how easy it was for you. Quote unquote, easy, but easy is not the right word to use. Right. It's like you did all the

right things,

Andrew: Yeah,

but I would say

the amount of work I put into building the business, like if, if someone made that comment, like, Hey, okay, this this kid just, you know, it's so easy for him, but it's so hard for me. I was working like an unhealthy amount [00:38:00] just to make. Cause I, I truly, truly believe this business needed to exist for entrepreneurs.

And so I was willing

to work.

Jason: A hundred

percent.

Andrew: Literally every waking hour to make it work. And sometimes it's what you need to do. You need to build the

business into existence. And that's kind of where I go back to, like, you don't really need financing you know, venture capital is really just a tool that accelerates, you know, things that you want to do within your business. By no means

you need venture capital. So if you're spending all your time, you know, pitching investors, hearing no, you should probably just spend that time focusing on your business, like talk to your customers. I used to just sit on live chat, even on the weekends. I just sit on live chat. I've learned so much from customers like previous, like Passfield acquisitions, like writing down different problems or ways to solve things. just like having that focus on the business makes fundraising easy. So you're putting the hard work where it should be, which is on again, [00:39:00] putting value in your business and creating value for your customers. instead of trying to, you know, impress whatever VC with your pitch and your story and your deck's super pretty or whatever.

Like, I guess from, from my vantage point, most investors. Like it's important, but I think, what's more important is, you know, are you capable of building, you know, a big business and is this a big opportunity in terms of market size and is this, you know, something that is in line with your personal ambition?

I think that that

came across, um, with a lot of

investors and it made the

decision easy. I can only speculate.

Jason: I

think, there's a lot to say on that topic, but, I usually love asking founders. you know, what's a piece of advice they'd give an early version of themselves or another founder that's going out there. And, you know, you already gave one, which I think is amazing, you know, focus on the business, really focus on building a great business and funding will [00:40:00] come.

Can you think of a second one? Any, any other specific thing you'd like to share.

Andrew: yeah.

I would say. when you build a startup, it could be whatever you want. you know, there's this thing where, and this happens to a lot of people that raise capitals. like you mentioned the treadmill. Like where you feel like you always have to be making these like short-term decisions to impress the next set of investors, because that's what your investors want you to do is raise more capital.

Um, but your investors make no money when you raise additional capital. So I guess I would say continue that focus on customers and really building a business of value and not just trying to build. You know, a fundable thing that just keeps raising money, money, and money until you're at a point where, you know, you're either gonna be acquired for, you know, a lot of money or maybe it's just value.

Add a lot of money. You got to grow into that investment. I mean, raising money. is, is [00:41:00] kinda if you, if you raise money before you're ready, it's like putting rocket fuel in a rocket. And if you put that rocket fuel and you're not ready for it, like your business is

going to explode. So I'd say just stay focused on, um, customers, but, Going back to a different point, you know, focus on, you know, something that you, you, you do for free. Like I ran MicroAcquire for free for over a year because I truly enjoyed it. And I think when you can find a business that you would actually do that for, and, you know, I'm fortunate that I was able to do that and not have a salary and drawing revenue from the

business. Um, I mean, I think those are the founders that go the farthest is because you don't really care about, you're

not thinking about money. You're thinking about, you know, the impact that you can make and, you know, the value you can deliver to like the, the funny part about MicroAcquire , you know, I've, I've accepted.

We could fail, you know, every startup can fail. you know, that's [00:42:00] just how startups work. Um, but even if MicroAcquire does fail,

we've made, you know, a ton of entrepreneurs, you know, millionaires, you know, and I think that's a win in itself. So you know, if you, if

you want

Jason: create your video game.

Andrew: Yeah.

create your video game.

and then, you know, and then the second part of that would be, you know, write down what you want out of a startup.

Like if it's just a few million dollars or which is a lot of money and you just want to be financially secure, avoid venture capital at all costs because you can get there a lot faster and really with a lot of headaches. Um, cause you know, I I view MicroAcquire as a business I want to run for the next decade. But you know, if you're just looking to, become financially secure yours and you know, there's not a lot of data on this, but I truly believe your stats are your chances. are just so much higher and I see it every single day at MicroAcquire. So, Just, you know, find something

that you would do for free

and then focus on [00:43:00] just, you know, creating as much business value and not impressing investors. And the rest of just kind of takes care

of itself.

I love that. Before our interview, I was so excited to pick Andrew's brain and hear about the craziest businesses he's seen on acquire.com.

Andrew: this story I like to tell the most about just the most. And this is like how much opportunity there is with software today. So there's this business that was this simple, it would basically like if I took a screenshot of your face, it would just remove the background.

So you'd have like a PNG with a transparent background and it was making. Let's call like 500 to a million, 500 K to a million profit. That's all it did. And the whole strategy was like search engine optimization. So if you type in like background remover for image or something like that, and it's sold for like 3 million bucks and it was ran by one guy, everything was automated.

It was just like a internet vending machine, just printing money. It was, [00:44:00] I've seen several businesses

like that, but, you know, people might kind of be like, oh, well, like why would you build that? And not a big thing. And you know, that guy or the person who sold it, you know, walked away.

Jason: that's probably super happy.

Andrew: Uh, yeah, I, I would hope so.

Yeah. So we get to see, we get to see a lot of fun businesses, and then also very niche to like a CRM for a dentist is one I've actually seen. I didn't know, dentists, you know, needed a CRM.

Um, Uh, you know, just really niche software and it just kinda opens your eyes to this different world of like, again, you don't need to build a billion dollar business to be successful as an entrepreneur. And that's, really our goal with MicroAcquire whereas we want to help support those businesses and just show the world like.

Hey Like, yeah, there's this path that you read about all the time, but there's also

this other path that

a lot of other people, should check out because it might be a little bit more practical and realistic [00:45:00] depending on what

your goals

are.

Jason: alright. Awesome. Well,

Andrew, thanks so much for the time. Uh, as a really

fun conversation.

big fan, um, you're still having fun. It sounds like you have a fun.

Andrew: Yeah. man. I

mean, I do, I need to talk to cool people like you all day. I'm a good,

cool

starters all day. Appreciate you

have

me on.

Jason: That was my conversation with Andrew Gaz. Decky founder of acquire.com. The best online marketplace to buy and sell startups. When we come back, we'll see how stumped my producer pages. I have a feeling she's getting the hang of some of the VC lingo

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When I heard people talk about magic, mind, this super productivity [00:46:00] drink. I was really skeptical, but a friend convinced me to try it and totally changed my mind. When you drink magic mind, you just have this focus kind of wash over you. Like those distractions that normally make you do the things that you don't want to do.

Those are gone and it's been kind of amazing for me.

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Hey, Paige.

Paige: Hi Jason.

Jason: so what'd you think about the interview with Andrew gsi? Actually before that, uh, had you ever heard of Andrew GSI before? I.

Paige: No, I had not, but I am very, like I said, I'm still [00:47:00] assimilating into this world of, people building companies. But

Jason: Yeah, I, and I'm so glad because there are so many characters online to follow, and Andrew is one of them. Uh, before we even did the interview, I knew of him and I was following him, and, uh, he did this great thing where he, do you know what cameo is? It's like you, you can hire celebrities to do random videos.

He got the actor that played Russ Hannaman on Silicon Valley. To do this over the top selfie video promoting, um, acquire.com and Andrew Gki. Uh, and that was great. He's a great follower. You should follow him.

Paige: I will definitely be doing that after this. I, one of the things I actually noticed while listening to this episode is he just, he doesn't even mean to, it seems like, but he has such a good sense of humor. Without even realizing it. Um, and the way he expresses himself with this, like calm confidence, [00:48:00] he doesn't even realize that he is doing it.

And it was, he was really, um, it was, I enjoyed listening to him.

Jason: You can tell that he's having fun. You know, you can tell that he really enjoys what he's doing. Even the interview was part of his company and he loves doing it. Um, you know, this is, that's just the thing that gets you amped to talk to certain founders for sure.

Paige: Yeah. And that's why I enjoyed, um, hearing about his background and honestly kind of where I had. My first open-ended question,guess I would say, uh, because you were asking about his childhood, you know, how he grew up and something that I noticed is that he said being an entrepreneur was out of necessity and.

I guess I have like a counterclaim to that because, you know, we all come from different backgrounds and, he was mentioning he grew up in a very nice area, and he didn't grow up with as many things as the people surrounding him.[00:49:00] so back to my point is he said that it was out of necessity that he became an entrepreneur, but what I've noticed is, Some kids who grow up with similar backgrounds to him, that honestly, that makes them feel like even more, they can't become an entrepreneur cause they feel like they don't have the resources, they don't have the network.

So I guess my first question for you, would be, do you think that certain people are almost just born to be founders and have that mindset because not everyone in his situation grew up viewing the world in the way that he did.

Jason: Yeah. What a funny question. Um, funny because, I was chatting about this with my entrepreneur friend at dinner about like, Are the things that go into a founder that is successful and a founder that is a venture backed founder that's successful. And I think there are probably a few characteristics that help someone get down the certain path or, uh, be someone that's predisposed to enjoying [00:50:00] what entrepreneurship.

represents but I don't think it's, you know, I don't think it's one profile and, and only this one profile that ends up becoming an entrepreneur or ends up being a successful entrepreneur. I've seen people from very different backgrounds, people with a chip on their shoulder, that needed to prove something, someone that grew up feeling like.

Everything they wanted was always out of reach and they wanted to get to it really quickly. And the only way to short circuit that was by building their own business. And then sometimes people that grow up with great means, who got everything,because they don't have any risk of I don't need to make money.

It. Allows them to leverage their own intelligence, their existing network, and just go for broke and go really big. Because they can, right? Like if they fail, they have something to fall back on. And I've seen all those profiles work out. So yeah. I'm not surprised that you're like, huh, I've seen different profiles.

It's definitely [00:51:00] possible.

Paige: I guess the reason I was just so intrigued is because when he was speaking about it, he was like, it was out of necessity. And I think regardless of the background that you come from, I guess not with every single founder, but with a lot of successful founders,

They have this necessity to solve a problem and to create something, and I just, really wanted to point that out because he said it was such, uh, I don't know, such confidence that he just knew that that's what he had to do.

Jason: I think it's a good call out. What? I mean, it's your own personal framing of that necessity. Right. But you're right. Like. Every founder that we talk to that is successful and has gotten to the next stage and beyond, they have their own framing of why this is like a burning necessity for them. Some people, it's like Andrew felt like he needed to get these things that were out of reach.

Other people wanna prove something. Other people just like wanna scratch and itch or like have to solve a problem. But yeah, if you don't have that [00:52:00] burning like feeling like what I'm doing right now, like I have to be doing this. Um, it's gonna be a hard road, so,

Paige: And I think that that's something that investors can recognize as well. I think maybe that's one of the things that attracted so many investors in the end, along with, with, you know, many other factors.

there's another question I wanted to ask you about, which is when he finished working on his first business, I can't remember the name right now.

And as soon as I think during,while it was getting acquired, he started working on his next business. And I feel like this is semi common within founders who wanna create multiple businesses, before they even finish the one, before they're already thinking about it. And he mentions how he recommends maybe you take a little bit of a break

Jason: and he's like, but I didn't do that.

Paige: Yeah. Right, right. Exactly. I just wanted to you to talk about, you know, some of the benefits maybe that might come from, [00:53:00] you know, staying on that motivation acceleration train of trying to build something else and, you know, maybe point out possibly some of the downsides, cuz I think you've experienced something similar as well.

Correct.

Jason: Yeah, that's right. I mean, I think it's very common for entrepreneurs to. Just want to continue entrepreneur, and they're probably good, good drivers for that. And they're definitely negative drivers for that. I think the good one is that at some point people just get addicted to slash fine, pure enjoyment in like the problem solving and the constant problem solving and the, and running the playbook around building a business that, like when you think about what do you wanna do, like.

You're not doing it because you need to make money anymore or you're not doing it because of a potential outcome. You're doing it because like if I had a decision to do five different things, I would still choose to just work on this next business. It's [00:54:00] not, you know, Andrew talks about this like, he's having fun, we talk about this.

He's having fun, and it's like, it's just, what's the next hobby he would work on? Well, it would be another business. I think the dark side of that is that, And this is my disclaimer for other people, cuz I've, I've felt this too, which is, um, this feeling like you have to, or like this feeling like it's, if, if you don't continue become being an entrepreneur or, or building businesses like.

You know, no one will respect you. Or if it's all like externally motivated. and so I, I do think people should hear the same advice that Andrew gave, which is like, take, take time off, develop a diversity of experiences and hobbies, like, um, try

Paige: Yeah, see where that

intention is coming from. See where that intention's coming from, and if it is internal and you genuinely just feel that necessity to solve another problem, hell yeah.

Jason: But find some time, but find some [00:55:00] time with your friends and family and, some other experience as well. I think that's probably something that Andrew would recommend as well.

Paige: Yeah, definitely. there's something else I think I wanted to touch on.which is

all of his investors for his second raise were actually users of acquire. And I just wanted to know your thoughts on that. I know that he, acquire is, is within the VC world and people use it all the time, but he was seriously being chased by investors.

And I want just your thoughts on why you think that was.

Jason: Yeah, I mean, and I think when you can do a few things all at once is one, like start building real traction and momentum in a business while also keeping. The investor community aware of what you're doing. And then finally kind of giving investors a bit of the cold shoulder, a bit of the like, oh, like I'm not gonna raise from you.

I'm just gonna do it myself because it's such a great [00:56:00] business. And then I'm not gonna raise from formal venture capitalists. I'm gonna let my customers invest first. Like so VCs, you can't even get in there now like that. I always tell people like the most powerful words that a VC can hear is no. Like turning them away just makes them be like, oh my God, they don't need my money.

That makes me want to give them money more. So I'm sure some of this was very calculated and parts of this are just like running a good business, right? I'm running a good business that doesn't need outside capital and I don't wanna waste time investing or fundraising. So, I'm just gonna keep running my business, and if VCs want to hear about me, they can.

So by the time that he went to go do his first raise from outside investors, like there were already, there was already so much heat around him and awareness of his deal and excitement to do that, that once he kicked off whatever process he ran, there was already this [00:57:00] like pressure and scarcity around how much people wanted to do the deal.

That that's why it became so smooth.

Paige: And he touched on this in the middle of the episode talking about how, you know, all these founders focus on on the raise. And he was like, you should be focusing on the culture, on the environment, on the team, on how can you literally perfect your process so much within your company that. It's honestly just the natural next step to get some capital to accelerate the growth of your company.

yeah. step one of running a great fundraise is run a great business. And I think most, maybe not most, a lot of first time founders skip that step and they just think they need a raise. And because Andrew had been through the game a couple times, he knew, he just wanted to build a great business.

Jason: And if there was a point in time where outside investor capital was the thing that he needed to accelerate the business, then he would do that and not [00:58:00] the other way

around.

Paige: I think the media also has associated raising a lot of money with successful business, whereas it's supposed to be successful business. Raise a lot of money in a way, or like, that's the more natural way to look at it. and I think it, it leads, you know, sometimes founders to, and we've talked about this before, but like founders to feel trapped in feeling like they have to raise because that's what gets the media's attention.

But as from Andrew's perspective, which he touched on numerous times, it was about building the best possible business and then, if people want to help him accelerate that, Then it's gonna happen because they're gonna recognize the success that's already there. So yeah,

I just, I appreciate his mindset.

Jason: Yeah. The ultimate irony of having Andrew Gasek from acquire.com unfunded is that. Andrew's big thing both for his company and his own personal belief is that you shouldn't raise venture capital. Like 99% of entrepreneurs should not raise [00:59:00] venture capital. They should run their own business. They should be playing for a small exit, and he wants to give the best platform and experience to, making that process as painless as possible.

And you know, as ironic as that is, it's, it's almost not ironic because I believe it too,

Paige: Yeah.

Jason: I, I love the work of trying to help founders who are, uh, dedicated to building a venture backed business, um, and helping them understand how to raise capital the most effective way. But I find that, 90% of my work is kind of convincing a lot of people that they shouldn't be raising venture capital and neither.

Certainly Andrew doesn't think this, but my message is definitely not this either. Like my message of you shouldn't raise venture capital isn't you're running a bad business. It's that it's just not the right fit for you. You can run an amazing business with huge financial outcomes without re, you know, raising venture capital [01:00:00] and, and it's a great message to put out there to make sure that people are going down the path that's right for them.

Paige: Yeah. Wow. it's been cool to, learn a lot about the fundraising process through you and. And a bunch of different PCs and founders because I think that, a lot of founders, don't learn about the fundraising process until you're in it and you're raising, and I think it's cool that we're creating an opportunity for founders to learn about it beforehand.

So then they can really decide, you know, is this good for the business? Is this just something external that I think I need and they can, make a more. a proper decision around what's the best for them. but I think that's a really cool way to almost wrap this up. AndI just wanted to mention something that he said that I loved, which was, find something that you would do for free and just keep creating value, and maybe you can add your own thoughts on that.

But I just, I just loved that so much and I just wanted to share it again for [01:01:00] people to hear.

Jason: I think it's spot on. Spot, spot, spot, spot on. A hundred percent. And I'll flip it around to you. Uh, To end this and say, what is that thing that you would do for free that you might sell on acquire.com in a few years? What do you think that could be?

Paige: Oh my gosh. You're talking to me. I thought you were talking to the listeners for a second. Something that I would be interested in is I've thought a lot about, I would like to create something where I actually go into other businesses and I help create, uh, stronger.

Communities and connections within them. You know, whatever business that might be. It could be any type of business. because I just like to get involved with groups of people and, you know, foster, a better environment. I'm not sure if I could sell that on acquired.com or I even if I would want it to get acquired cuz I wanna be there.

Um, but yeah, that's the one thing that's been toying around in my mind as of lately.

Jason: Well, you'd be awesome at that and I'm sure Andrew would help you sell that on [01:02:00] acquire.com if you got to

Paige: Yeah, I might have to reach out to him,

Jason: if you're looking for more insights, strategies and support around the process of fundraising. Subscribe to our weekly newsletter@fundedpod.com slash newsletter. And find me on social I'm at J Ja. That's J a Y Y E H on almost every platform. I respond to newsletter replies and DMS. So hit me up.

This episode was produced by page Randall.

Paige: Hey guys.

Jason: Thanks also to John or Lee from adamant.

Jonathan: Hello

Jason: And thanks to Andrew GEZ. Decky for creating a place for entrepreneurs and founders all over the world to control and sell their businesses the way they want to.

As always one last thanks to our fantastic sponsor. Vanta the leading automated security and compliance platform.

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