Speaker 1 (00:00:03) - All right. We got seven minutes on the clock, and we're having a conversation about exiting your e-commerce business. So on today's call we're going to be talking with Mr. Jason. Welcome the show dude.

Speaker 2 (00:00:13) - Thanks, man. Glad to be here. Yeah.

Speaker 1 (00:00:15) - So you help ecom founders exit their business. But actually you do it in a different way. Why don't you kind of give us an idea of what you do?

Speaker 2 (00:00:23) - Yeah, I would say, you know, what makes us unique is we actually help them build it so that it becomes a really attractive acquisition target, and then we help them sell it, sell them. So, you know, a lot of,, bankers and brokers out there focused solely on the transaction, you know, we're different. We help founders build their companies so that when the transaction comes,, they're really attractive to buyers.

Speaker 1 (00:00:46) - So it's really be M&A, where M&A is just mergers, acquisitions. You guys are build M&A, right? That's right. Then sell it now.

Speaker 1 (00:00:56) - Why did you guys come up with this specific approach rather than you know your background's investment banker. Why not just take the approach of transactional, you know slinging deals all day.

Speaker 2 (00:01:07) - Yeah, well, actually, in our firm, we started at eight years ago. We started that way. We were kind of traditional banking. And, you know, what we found was, you know, we really wanted to work with founders earlier because, you know, every time we were going to do a deal, we kept finding ourselves saying over and over again, if we could have only helped and worked with these guys two years ago, you know, they would have a much more interesting company to sell. We kept saying that over and over, and finally we decided to, you know, stop talking about it and actually do something about it. And,, and kind of pivot our model a couple of years ago. And it's been great because, you know, building I love selling companies, but I also love building them.

Speaker 2 (00:01:45) - So, you know, I get the best of both worlds. And I think the founders do too.

Speaker 1 (00:01:49) - Yeah. What's interesting, and, you know, you're an entrepreneur when you're when you're working in a deal and you're a deal guy. And then you look up and you're like, man, someone should freaking do this. And you say it like 2 to 3 times, you're like, freaking a it's us. We're gonna do it right? That's right. What did the,. Have you taken a company full cycle from you guys digging in with them, taking a look at what their valuation was, building it out, and then seeing post, you guys.

Speaker 2 (00:02:13) - No, no. Not yet. We're actually this year is going to be our first cohort where we're going to be coming to market. So we'll have probably 3 or 4 deals at least this year kind of from once, you know, when we started,, this different sort of approach, we're really excited. Things are looking awesome. I mean, these companies are, you know, much bigger, much more interesting.

Speaker 2 (00:02:34) - I'd say much more valuable. Much I'd say,, more unique than they were when we started working with them. So, you know, we we kind of part of our process too, is we sort of prime the pump. We kind of let the market know, hey, we got stuff cooking in the kitchen that you're gonna like. And so then they, you know, they keep wondering when we're going to be bringing it out. So,, a lot of interested people for sure.

Speaker 1 (00:02:55) - Yeah. For sure. So when working with a founder of an e-commerce business, like before, starting with you, you take a look at maybe their valuations or some KPIs to, to put like a before and after, you know, picture on it. Right when you're looking at an e-commerce before working with them, what are you paying attention to for valuation and KPIs that most founders need to pay attention to?

Speaker 2 (00:03:18) - Yeah. I think the general rule here is, you know, we're looking for attributes that you can build into kind of long term sustainable and scalable value.

Speaker 2 (00:03:27) - Right. So all the kinds of things that might indicate that that's what this company has, or at least some of the foundational elements. Right. So you you know, if it's a product business, you start with, well, well what is the product. And you know, what is the product development capability. You know, any consumer products business, there's none of them that can just stand still. I mean even like Apple, right. We're on iPhone 15. You know, they didn't stop at iPhone one and decide to just keep trying to sell that forever. So I think anything that that shows that there's a long term sustainable, scalable value. So fanatical customers, that's another one., I would say, you know, repeatability. And can you build around a couple of core, say, offerings and maybe, you know, kind of almost build out sort of the land and expand strategy?, things like that are really where we focus and of course, you know, the financial metrics matter a lot to, you know, are the margins there and, you know, a margins that you can build around.

Speaker 2 (00:04:25) - And, you know, one of the hardest things for, for companies to do is they're scaling up is to, you know, scale while maintaining profitability. And right now that's really important.

Speaker 3 (00:04:36) - Scale.

Speaker 1 (00:04:37) - While maintaining profitability. What do most companies do?

Speaker 2 (00:04:42) - Most companies as they scale, and especially if they're trying to scale rapidly, they're going to lose money in burn cash. That's kind of a I'd say a fairly typical approach. However, you know, in today's market, that's not going to get you where you want to be from an acquisition standpoint. So, you know, we're no longer in an era I would call the party era where growing revenue at all costs ultimately leads to a big reward. No, you have to prove that you can maintain profitability and possibly even grow it, as that operating leverage is kicking in as you're getting bigger. And so you know that that's where the market is rewarding,, founder owners for building companies that look like that these days.

Speaker 1 (00:05:26) - Yeah. That's super interesting. Yeah.

Speaker 1 (00:05:29) - When would you say that party era stopped?

Speaker 2 (00:05:34) - Well in e-commerce. It stopped in late 21 early 22.

Speaker 1 (00:05:38) - Okay, what was the cause of that? And then I wanted to give you an opportunity to tell people where to go if they want to do a deal with you. You know, you guys help them build and then exit BMA.

Speaker 2 (00:05:47) - I think a couple things were the cause. One, you kind of were coming down from the post pandemic high., so we had a bit of a bubble for sure. So we were coming off of that bubble. And then you're also, from a macroeconomic standpoint, you were heading into choppier waters,, which we've kind of been in now for a while. They're not bad, but they're choppier. And, you know, so that caused a lot of people with interest rates going up. And, you know, consumer being a little bit more shaky, be a little more risk averse. So you know that that was those are all big drivers for sure.

Speaker 1 (00:06:20) - Sure. So for Ecom founders out there who want your help beefing up the company to sell one day, what's a good place for people to connect with you?

Speaker 2 (00:06:29) - Yeah. You can reach me at Jason at GW Dot partners or just go to GW Dot partners.

Speaker 1 (00:06:36) - GW Dot partners, right. Not a.partners.com GW dot nope, not.

Speaker 2 (00:06:41) - A.com, just a dot partners.

Speaker 1 (00:06:43) - I love it. Cool. Hey everybody out there you fellow dealmakers. I hope you're enjoying the seven minute chats about deals. If you have specific deals that you'd like to talk about or learn about, head on over to the deal Scout com fill out a quick form, let us know your thoughts, and always reach out to our guests and do a deal with them. We love you guys and we'll talk to you on the next episode.