16 episodes

Welcome to The Deal Closers Podcast - a Tech & Internet M&A Discussion. Each week, join Randal Silvey and various experts with discussions in Mergers & Acquisitions in Tech & Internet space. From selling amazon companies to valuation principals in the sector, this is the one stop shop podcast for information in the M&A space for different types of eCommerce and tech companies. Available on your favorite podcast player.
See acast.com/privacy for privacy and opt-out information.

The Deal Closers Podcast Website Closers

    • Business
    • 5.0, 3 Ratings

Welcome to The Deal Closers Podcast - a Tech & Internet M&A Discussion. Each week, join Randal Silvey and various experts with discussions in Mergers & Acquisitions in Tech & Internet space. From selling amazon companies to valuation principals in the sector, this is the one stop shop podcast for information in the M&A space for different types of eCommerce and tech companies. Available on your favorite podcast player.
See acast.com/privacy for privacy and opt-out information.

    Selling Amazon FBA Brands with David and Leah Cupps

    Selling Amazon FBA Brands with David and Leah Cupps

    What would you do if overnight you became a millionaire?
    Maybe you’d move to a new city, buy a new house or a car. Or maybe you’d look for a way to make your newfound wealth grow. 
    For Amazon Seller experts David and Leah Cupps, they decided to use the cash from the sale of their first business to continue growing their wealth and pursuing their business passion.
    On today’s episode of Deal Closers – A Tech & Internet M&A Discussion, the couple shares the story of how they transitioned from Amazon sellers to business sellers and offer some great tips on how to make a business the perfect fit for buyers.
    In this episode, you will learn:
    What the drivers were for starting their first business. (01:04)The experience of selling an Amazon business for the first time. (03:32)The stress factors involved in selling a business. (05:09)How David and Leah managed to reverse-engineer the process of selling an Amazon business, in order to grow the potential of their next ones. (07:48)The characteristics of a good seller, from their perspective. (08:52)How to make the transition easier for both the buyer and the seller. (10:16)How to build your audience, to have more control over how the sales are grown. (13:55)Why Amazon is the go-to platform for selling your products. (18:27)What to spend your time on, as a first-time seller. (21:34)The importance of having a specific plan for a specific goal. (22:38)David and Leah’s advice for business owners. (24:47)
    Resources:
    websiteclosers.comWebsite Closers: Need Help Selling an Amazon Business?
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    • 26 min
    Leveraging Affiliate Networks in Your Business with Nate Lind

    Leveraging Affiliate Networks in Your Business with Nate Lind

    Remember when you first decided to start your eCommerce company? It probably felt like a roller coaster, with so many decisions to make, so much potential to grow and still, so much risk masked by unknown factors.
    Now, when you decide to sell your company, that roller coaster starts all over again.
    On today’s episode of Deal Closers - A Tech & Internet M&A Discussion, Jason and Ron from WebsiteClosers.com talk with an expert of affiliate companies, Nate Lind, about the benefits of joining affiliate networks for your business.
    Nate Lind has successfully launched 23 supplement and eCommerce brands, grossing over a million dollars each, since he started, in 2011. He brings a high level of experience in this sector and fully understands the day-to-day challenges of Internet Entrepreneurs.
    [01:12] What was Nate’s first eCommerce selling experience like?
    He was interested in buying a supplement company, but the problem was that the owner was the brand and it was hard to separate the two of them. The owner didn’t want to continue to be involved in the business, so the transition was going to be really hard. Nate managed to partner with a couple of folks and successfully launched the supplement brand.The upside of this deal was that he got to learn so much about the supplement and eCommerce businesses, just through the due diligence process and from his previous business experience.
    [04:24] Have you found, yet, what a good buyer is?
    The easiest ones for me are people that I’ve got a personal relationship with. They’ve been coming to my events and there’s hundreds of people that have been to my past trade shows or my masterminds, and I’ve got a personal relationship with them.I’m guessing every broker within the firm has an inner circle of buyers, people that they know have funds or they know can qualify for funding. What happens over time is we build relationships with each other, and that turns into an immediate win.Also, the people that I’ve done business with are through a third party – so there’s a lot of referrals too.
    [06:47] Why would affiliate and off-Amazon direct sales companies also appeal to buyers?
    Most of the businesses in the off-Amazon universe and in the Amazon universe are home-based businesses, and that’s what most people are looking for. They don’t tend to have a brick & mortar presence.If I were a family office and I had a couple of brands sold on Amazon, before I started rolling up too many of those, I’d really look into an affiliate network, I’d look into some alternative sort of company that will give me the spread of risk into other opportunities because the entire world that we know here, in the Amazon space, can completely change overnight.Amazon banns certain products, but that doesn’t mean they are illegal – it’s just that they have their own rules as it relates to what they will and won’t sell. When it comes to the additional platforms, it makes it a lot easier to launch new products and a lot less risk.
    Resources:
    websiteclosers.com
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    • 15 min
    Small Businesses and SBA Loans with Stephen Speer

    Small Businesses and SBA Loans with Stephen Speer

    Small business is the backbone of the United States. Without ambitious entrepreneurs starting small businesses, the economy would take a huge hit.
    At some point, for many business owners, there comes a time when someone offers to buy the business.
    But, where do these people find the funding to buy a business?
    On today’s episode, Jason and Ron from Websiteclosers.com, talk with expert Stephen Speer – the founder of eCommerce Lending Inc. – about SBA loans, how buyers acquire them, and what myths and misconceptions there are around SBA loans.
    [01:15] What is an SBA loan?
    SBA – Small Business Administration – is a department within the Federal Government;The Federal Government, through SBA, offers 75% of the loan, to banks that lend money to small businesses;There are several types of SBA loans, but the only one available for business acquisitions is called, “The 7(a) Loan”, which comes with a specific set of rules;It could be one business or 50 businesses – you’re allowed up to $5 million balance of SBA loans.
    [02:50] The advantages of the SBA process:
    For a seller, the SBA process is really important because they can get 85-90% of the entire deal in cash at closing;The buyer gets an entire decade to pay back a loan, through the cash flow of a business;The interest rates for SBA loans are reasonable and much lower than what you might see if you’re trying to get a commercial or a personal loan;There’s a lot larger buyer pool that can afford to get into an SBA loan because the down payment is so low.
    [05:37] Who are SBA loans built for?
    They’re built for small business owners and in the business acquisition world, they’re built for buyers of businesses;Loans up to $5 million pretty much cover any need for any small business owner –for example, real estate loans, business acquisition loans, equipment loans, etc.
    [06:22] What sets eCommerce Lending apart from other sources?
    They’re not a bank, meaning they’re not lending their own money;They are facilitating transactions with their lending partners;They put together the structure of the deal and work from start to finish with their buyers;Their value is their expertise and the fact that they are very flexible. For example, if a lending partner doesn’t like a deal, they’re able to switch gears without restarting the process, and offer it to another one of their lending partners very quickly;They collect every bit of documentation required and ask as many questions as possible before the loan goes into underwriting;If there are weaknesses in the deal, they address them up front, because the underwriter is going to ask the same questions.
    [09:25] A piece of advice from Stephen to anyone interested in buying a business with an SBA loan:
    It’s imperative for any buyer out there, to get pre-qualified before beginning their search. At eCommerce Lending, they offer their time, free of charge, to speak with buyers.
    Resources:
    websiteclosers.comeCommerce Lending Inc.
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    • 11 min
    Getting the Buyer That's Going to Close

    Getting the Buyer That's Going to Close

    Putting your company on the market, especially in today's world where tech companies are increasingly more valuable, the kind of deal you want to focus on is the deal that will bring you closer to your desired number.
    There are many, many layers to this process and buyers don’t grow on trees, so you have to be aware of some common practices of the industry before you dive deep in trying to sell your company.
    On today’s episode of Deal Closers - A Tech & Internet M&A Discussion, Jason and Ron are joined by another Websiteclosers.com broker - Lassiter Mason – and they talk about the process around selling a tech company, industry trends in M&A, and some of the mistakes first-time sellers make.
    [02:11] The reasons why tech companies have more demand than brick & mortar businesses:
    People get more and more interested in having things delivered to their home;The tech world is continuously developing, and advances are made in robotics or AI;The tech side is not location-specific, so it’s much easier to get a deal done.
    [04:45] Then and now - the evolution of the M&A industry over the past 10 years:
    Five years ago, anybody with a little bit of spare time on their hands opened up an Amazon account, got widgets on Alibaba and just sold them. Now, you can’t do that anymore. If you’re on Amazon, you have to be far more sophisticated if you’re going to compete and succeed;The size of the deals have changed – it used to be hundreds of thousands, now we’re talking about millions and tens of millions of dollars;Now, buyers and sellers have the support from professionals like accountants or attorneys, whereas in the past you could hardly find people specialized on these e-commerce needs;In the past, all traffic was driven through websites. Slowly but surely, people began selling on Amazon and now almost everybody is in the e-commerce space.
    [10:57] Some rookie mistakes sellers make:
    They don’t have good books – You have to have the books before you can go to market because the first question buyers are going to ask is, “Let me see the books.”Sellers can get a little crazy on their tax returns – they play around with inventory, which affects the cost of goods sold. This, in turn, affects their chance of getting financed by the bank;Sellers take their foot off the pedal and stop trying to grow the company – we always talk about selling on the way up, you always want to sell with growth and you want to continue to grow during this process – this is a two to four months process, so it isn’t something that happens in a day;Sellers have expectations that are way beyond what anybody would be willing to pay. It’s important to understand, as a seller, that if your expectations are not reasonable and they’re not within the market, your opportunity to close goes down tremendously because you also have to understand that the buyers that are out there will work with you after the close. If your expectations are too high and you’re pressuring too much, they know what it’s going to be like after closing, and they don’t see you as a “reasonable person”.
    Resources:
    websiteclosers.com

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    • 19 min
    Broker Interview: Tom Howard

    Broker Interview: Tom Howard

    We hear a lot from our broker experts, Jason and Ron, on the show. Each week, they come in and drop nuggets of wisdom about the ins and outs of the industry.
    But in this business, there are a lot of companies to sell and a lot of obstacles that can come up. With so much going on, there are plenty of professional brokers out there.
    On today’s episode of Deal Closers - A Tech & Internet M&A Discussion, we’re bringing in a different voice, Tom Howard, another broker from WebsiteClosers.com. Over the last 20 years, he has built, launched, and sold new small businesses mostly around financial services and technology.
    [01:35] What do you find unique about the tech side of the industry?
    One of the unique things is the pace of deals. In tech and in the online world in general, things just move really quickly;In the tech space, the sellers and buyers are all over the world, and it makes no difference where our company is located, for the most part, in this virtual space.
    [08:43] Looking at the industry when you first started out in your career, Tom, what did it look like then, compared to now?
    When I started out, the owners that were coming in, they had started businesses maybe as a side gig or just to generate some extra cash flow and in a lot of cases, the businesses had grown and outdone their expectations. Most of those early businesses were driven more by AdWords or organic SEO traffic, and Amazon was a channel but not necessarily a primary channel;Watching how things have changed on Amazon, is unbelievable. Even though for some reason people see Amazon as being a big risk, from the standpoint of a retailer, they’re a much more comfortable place to be because you know what you’re going to get with them;About 75% of all search for consumer goods now starts with Amazon, rather than Google, and over 50% of all e-commerce sales happen at Amazon now.
    [13:00] What about some of the things that might have stayed the same?
    Something that stays the same, and always will, is the fundamentals of business – proprietary value, clean financials, growth, product differentiation, lack of concentration. The overall risk profile that you put on a company is relatively the same;Buyers are still investors and they’re looking for a rate of return on their investment;Good businesses trade and weak businesses have far less value, if any.
    [16:48] What have you found helpful for buyers and sellers to find success in the deal process?
    From a buyer’s perspective, it’s critical to know what you are looking for before you start shopping, so I encourage buyers to define, in as specific terms as possible, exactly what they’re looking for so that they’ll recognize it when they see it, because if they don’t recognize it, it’ll be gone if it’s a good business;As a buyer, particularly if it’s your first venture into tech, it’s very important to look closely at the seller and make sure that this is somebody that you can work with, that’s committed to your success, that’s going to help you have a seamless transition;For sellers, it’s important to be transparent – no business is perfect, so just get it out on the table and try not to persuade or sell your business. The objective, really, is to find the perfect match between the buyer and the business, so what we’re really trying to do is to make sure we understand what’s important to the buyer and we let that buyer determine whether this particular business is a good fit;When it comes to a good broker, he knows which businesses are good, bad or decent, but he also knows the best businesses. So, when you’re working with a good broker, you want to stay with that broker and have direct contact on a regular basis, so that when he gets a good deal, he’ll come to you to take a closer look. So, the object of being loyal to an accomplished, knowledgeable, successful broker is ext

    • 37 min
    The SBA Process

    The SBA Process

    Business is a lot like a game of Monopoly. There are properties and companies available for sale and sometimes you have the money, sometimes you don’t.
    But unlike Monopoly, in real life, you don’t look to Rich Uncle Pennybags for cash and get out of jail free cards. In reality, when it comes to business, you get a lot of help from the banks, the Government, and brokers.
    On today’s episode, of Deal Closers - A Tech & Internet M&A Discussion we’re taking a closer look at SBA loans - which weren’t always around and buyers used to have to search for other ways to fund these major deals - and Jason and Ron, from WebsiteClosers.com, explain the process very well.
     [00:40] What is SBA and how it started?
    The Small Business Administration (SBA) is an arm of the US Government and they put together something which is very unique to the world. It’s basically an opportunity for banks to have coverage as long as they follow certain rules of the US Government when they loan money to businesses;The reason they started the SBA is because sellers would get ready to retire, they would own a business, they would employ people, and there would be no mechanism at the end for them to turn their business over in an organized fashion to another person, meaning that they either shut the business down and laid the people off or they would hand it to somebody and get a very small down payment and then rely on payments over a long period of time – so it didn’t create any retirement mechanism or anything for a seller.
    [02:38] Why the banks are interested in the SBA process?
     The bank doesn’t have a lot of downsides;Usually, 75% of the loan is guaranteed by the Government. If there’s a recession, that amount might even go to 90%;It doesn’t take them long to recoup the original amount that they have at risk.
    [04:50] What are some of the rules of the SBA process?
    The SBA lenders are required to use tax returns – they’re everything to the SBA process - for what is called, “A debt service analysis”;
    You have 10 years to pay the debt off;The interest rates are anywhere in between 6-8%;The banks are lending based on the historical cash flow of the company and not some assets that are on the books and on the balance sheet as collateral;You have to have a resume that shows that you're not necessarily experienced in the industry, but that you have life experience that would accommodate the new company that you're about to take on;There's going to be a Q&A and even smart people sometimes are asked questions that they're not ready for.
    [11:45] Why the SBA route is attractive for both buyers and sellers?
    From the buyer’s perspective, they’re getting to amortize this over an entire decade, which makes it a lot more likely they’re going to be successful paying that debt.For the seller side, they’re getting 85-90% of the entire deal in cash, at the closing table – and that’s a bit rare in M&A, especially as you get to larger deals;A buyer is going to be a little bit more flexible than they otherwise would, since the vast majority of the deal is going to be a loan, so they might be willing to even go up 10% higher than they otherwise would, because they know it’s going to be amortized over an entire decade – so from a seller’s perspective, this should look very attractive.
    [15:56] In addition to all these rules, what are some things buyers wouldn’t expect, that are good to know?
    A buyer that has had no experience at all, first of all, needs to go and talk to a business broker. I would not talk to an accountant or a CPA or an attorney or a bank - especially not a bank because if you walk in, without any experience at all, or any relationships at all into a bank, your disapproval rate is over 90% - you are highly unlikely to get approved for an SBA loan if you don't have those relationships;If you have collateral, the ban

    • 28 min

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