Opportunity: $3B+ in transactions across major online brokers & marketplaces. *
15,000- 20,000 deals each year across platforms like Flippa, EmpireFlippers, WebsiteClosers…etc.
Although large aggregators like Thrasio attracted liquidity from institutional investors & private equity funds to the market, most P.E Funds still don’t consider any deals below $1,000,000 in SDE*
This creates a huge opportunity for smaller Micro PE Funds, Holding Companies, and acquisition entrepreneurs to buy deals at lower multiples, increase the value of the business, roll up a portfolio of acquired companies, and benefit from a Multiple Arbitrage when reselling.
In addition, a survey of aggregator valuations in 2022 by The Fortia Group revealed that DTC Aggregators paid significantly more than FBA Aggregators.
*Andrea Balletbo from Boopos speaking at Good Merger Summit (Miami -May 2023)
* SDE (Seller Discetionary Earnings)
Thesis: Acquire established e-commerce brands with strong organic traffic/revenue, high profit margins (30%+). Buy & Build an ecosystem to support the growth of these brands while increasing operational excellence through combined experience, economies of scale, and vertical integration.
Portfolio Construction/Diversification:
“We know what a company is worth in isolation but when combined with these other companies for diversification and economies of scale… the multiple exponentially grows”. Neil Olympio CFA
“The whole is greater than the sum of its parts”
One way to quickly find potential acquisition targets is to review your financial statements and see what other companies are consistently appearing in your expenses. “As a private equity fund manager, you should have no expenses”. These types of deals would be considered “Off-market deals”. Although they’re usually more affordable as you have more room to negotiate with sellers without the presence of a broker, these deals tend to take longer to close.
On Market DealFlow
Website Closers: Most listings are in the $150k- $700K SDE range. Franchise structure with different brokers/franchisees.
Pros: Sellers are ready to sell! Brokers review information provided by sellers and create Offer Memos with key information and insights.
Cons: Broker fees put pressure on sellers affecting the flexibility of deal structures that they accept. Best deals move quick (nurture relationship with brokers).
Flippa: Dealsizes are all over the place. This is a marketplace and not a brokerage. Advisors do work with sellers but but only for bigger deals.
Pros: More flexibility to negotiate with sellers.
Cons: Alot of bad listings. Can be time consuming to filter deals.
Empire Flippers:
Marketplace similar to Flippa but with listings reviewed by E.F.
Pros: Easier to filter good deals.
Cons: Proof of Funds needed to see deals above certain size.
https://webstreet.co/ (Empire Flippers Capital) Connects Accredited Investors to Portfolio Managers.
BizBuysell: Largest marketplace across all industries.
Pros: Less competition with e-commerce deals.
Cons: Not focused on e-commerce so thorough filtering must be done. Nurturing relationships with brokers is key.
Risk Profiles
Financing:
Seller Financing
Cash
HELOC
Boopos
SBA
Private Investors (Syndication)
PE Fund (Regulation D 506c recommended for US)
Buy Side Process:
Source deals from brokers
Filter opportunities using risk profiles
Engage seller
Submit LOI
Due Dilligence
Signed APA
Financing (if needed)
Closing
Exit Planning
Why exit?
“We all will have to exit 1 day, the question is will it be on our terms”?
“If you have 1 buyer you don’t have a a buyer at all”
What’s my business worth?
Buyer’s Future Cash Flow/Expected Rate Of Return
How to increase the value of your business:
1.Increase Future Profits
2. Decrease Future Risks*
*Audited Financial Statements and KPI’s help lower perceived risk.
Questions to ask yourself:
1.What are 3 ways you can increase profits prior to your exit?
2.What are three risks a buyer might perceive that you can decrease or eliminate in the next year?
3.If you plan to offer incentives to key employees, who will help you design and implement the plan?
Types of Exits:
Internal Transfers
Family Transfer
Management Team Transfer
ESOP (Employee Stock Ownership Plan)
External Transfers
Financial Buyer (Private Equity)
Strategic Buyer (Pays the most)
IPO
Asset Sale Vs Stock Sale
Asset Sales are most common
Key Performance Indicators:
Gross Margin (70%+)
Net Profit Margin (30%+)
CAC (Relative to AOV)
AOV
Repeat Customer Rate (Depends on industry such as CPG, Supplements, Kids Toys)
Choosing a broker:
Are they specialized in e-commerce listings or do they sell all types of deals?
Have they bought and/or sold any e-commerce companies themselves?
How many active listings do they have?
Corporate Stucture Vs Franchise
What are the terms of contract with broker? How long will they be your exclusive broker?
Our Team
The Quiet Fund
WSG Advisors
Digital M&A Consulting
Adonis S. Ayeva
Former Data Science @ Coca Cola
Innovation Strategy @ Delta
Started & Scaled multiple e-com brands to 7fig.
Acquired 7 fig portfolio in 6 months
Helped multiple clients acquire deals from $300k$-2m
Neil Olympio
Managing/Diversifying Assets for Pension Funds, Institutional Investors…etc (minimum investment $200m)
Chartered Financial Analyst
Risk Management
Fabrice Foy
Managing Fund with $1B+ AUM
Quantitative Research
Risk Management
Alternative Assets (Helping Institutional Investors diversify… This has been instrumental in attracting investors for our ecom deals)
Drew Paras
Franchise Development Company valued at $100m
Raised 9 figures in Capital for multiple Franchise Brands
Exited multiple Franchise Brands. (Latest is TheDripBar’s exit to Shark Tank Kevin Harrington
Expert in Growth Capital, positioning brands for strategic exits, and creating multiple long term equity opportunities by helping other brands grow (we’re applying this model to ecom/SAAS)
15,000- 20,000 deals each year across platforms like Flippa, EmpireFlippers, WebsiteClosers…etc.
Although large aggregators like Thrasio attracted liquidity from institutional investors & private equity funds to the market, most P.E Funds still don’t consider any deals below $1,000,000 in SDE*
This creates a huge opportunity for smaller Micro PE Funds, Holding Companies, and acquisition entrepreneurs to buy deals at lower multiples, increase the value of the business, roll up a portfolio of acquired companies, and benefit from a Multiple Arbitrage when reselling.
In addition, a survey of aggregator valuations in 2022 by The Fortia Group revealed that DTC Aggregators paid significantly more than FBA Aggregators.
*Andrea Balletbo from Boopos speaking at Good Merger Summit (Miami -May 2023)
* SDE (Seller Discetionary Earnings)
Thesis: Acquire established e-commerce brands with strong organic traffic/revenue, high profit margins (30%+). Buy & Build an ecosystem to support the growth of these brands while increasing operational excellence through combined experience, economies of scale, and vertical integration.
Portfolio Construction/Diversification:
“We know what a company is worth in isolation but when combined with these other companies for diversification and economies of scale… the multiple exponentially grows”. Neil Olympio CFA
“The whole is greater than the sum of its parts”
One way to quickly find potential acquisition targets is to review your financial statements and see what other companies are consistently appearing in your expenses. “As a private equity fund manager, you should have no expenses”. These types of deals would be considered “Off-market deals”. Although they’re usually more affordable as you have more room to negotiate with sellers without the presence of a broker, these deals tend to take longer to close.
On Market DealFlow
Website Closers: Most listings are in the $150k- $700K SDE range. Franchise structure with different brokers/franchisees.
Pros: Sellers are ready to sell! Brokers review information provided by sellers and create Offer Memos with key information and insights.
Cons: Broker fees put pressure on sellers affecting the flexibility of deal structures that they accept. Best deals move quick (nurture relationship with brokers).
Flippa: Dealsizes are all over the place. This is a marketplace and not a brokerage. Advisors do work with sellers but but only for bigger deals.
Pros: More flexibility to negotiate with sellers.
Cons: Alot of bad listings. Can be time consuming to filter deals.
Empire Flippers:
Marketplace similar to Flippa but with listings reviewed by E.F.
Pros: Easier to filter good deals.
Cons: Proof of Funds needed to see deals above certain size.
https://webstreet.co/ (Empire Flippers Capital) Connects Accredited Investors to Portfolio Managers.
BizBuysell: Largest marketplace across all industries.
Pros: Less competition with e-commerce deals.
Cons: Not focused on e-commerce so thorough filtering must be done. Nurturing relationships with brokers is key.
Risk Profiles
Financing:
Seller Financing
Cash
HELOC
Boopos
SBA
Private Investors (Syndication)
PE Fund (Regulation D 506c recommended for US)
Buy Side Process:
Source deals from brokers
Filter opportunities using risk profiles
Engage seller
Submit LOI
Due Dilligence
Signed APA
Financing (if needed)
Closing
Exit Planning
Why exit?
“We all will have to exit 1 day, the question is will it be on our terms”?
“If you have 1 buyer you don’t have a a buyer at all”
What’s my business worth?
Buyer’s Future Cash Flow/Expected Rate Of Return
How to increase the value of your business:
1.Increase Future Profits
2. Decrease Future Risks*
*Audited Financial Statements and KPI’s help lower perceived risk.
Questions to ask yourself:
1.What are 3 ways you can increase profits prior to your exit?
2.What are three risks a buyer might perceive that you can decrease or eliminate in the next year?
3.If you plan to offer incentives to key employees, who will help you design and implement the plan?
Types of Exits:
Internal Transfers
Family Transfer
Management Team Transfer
ESOP (Employee Stock Ownership Plan)
External Transfers
Financial Buyer (Private Equity)
Strategic Buyer (Pays the most)
IPO
Asset Sale Vs Stock Sale
Asset Sales are most common
Key Performance Indicators:
Gross Margin (70%+)
Net Profit Margin (30%+)
CAC (Relative to AOV)
AOV
Repeat Customer Rate (Depends on industry such as CPG, Supplements, Kids Toys)
Choosing a broker:
Are they specialized in e-commerce listings or do they sell all types of deals?
Have they bought and/or sold any e-commerce companies themselves?
How many active listings do they have?
Corporate Stucture Vs Franchise
What are the terms of contract with broker? How long will they be your exclusive broker?
Our Team
The Quiet Fund
WSG Advisors
Digital M&A Consulting
Adonis S. Ayeva
Former Data Science @ Coca Cola
Innovation Strategy @ Delta
Started & Scaled multiple e-com brands to 7fig.
Acquired 7 fig portfolio in 6 months
Helped multiple clients acquire deals from $300k$-2m
Neil Olympio
Managing/Diversifying Assets for Pension Funds, Institutional Investors…etc (minimum investment $200m)
Chartered Financial Analyst
Risk Management
Fabrice Foy
Managing Fund with $1B+ AUM
Quantitative Research
Risk Management
Alternative Assets (Helping Institutional Investors diversify… This has been instrumental in attracting investors for our ecom deals)
Drew Paras
Franchise Development Company valued at $100m
Raised 9 figures in Capital for multiple Franchise Brands
Exited multiple Franchise Brands. (Latest is TheDripBar’s exit to Shark Tank Kevin Harrington
Expert in Growth Capital, positioning brands for strategic exits, and creating multiple long term equity opportunities by helping other brands grow (we’re applying this model to ecom/SAAS)
