#95: Bootstrapped, Scaled, and Sold a SaaS-like Tech-Enabled Services Business

05/31/24 • 68 min

Jeff Corn is the co-founder and former CEO of Virtuance, one of the US's leading real estate photography and marketing providers. In 2010, Jeff was in the real estate investment business and wondered why it took $10,000 and nearly a month to get professional photos for new listings. He and a cofounder started taking photos to serve busy real estate agents to learn what was needed and improve the quality and speed of delivery with technology.

Virtuance started with the vision of a software-only solution, but the business started growing with a high-quality, done-for-you service with a fast turnaround, powered by its technology, partners, and systems. The company grew steadily every year without any outside funding to eventually serve more than 20,000 real estate agents with 100 employees and more than 300 local photography partners.

This tech-enabled services company has SaaS-like gross margins. re-occurring revenue, and some profits In 2022, Jeff successfully sold Virtuance to Diakrit, a global real estate marketing technology company backed by private equity investors. Jeff stayed on for two years after the sale, until last month.

Quote from Jeff Corn, co-founder of Virtuance “The biggest reason that founders fail is that they actually fail to launch. The hardest thing to do is to fricking push your product and get it out in the world– because it’s messy. It’s certainly far from perfect, and it may not even work very well. But getting that feedback is so important to figure out what to do next.

“I see too many founders try to perfect it before they get it into the market. And then when it gets into the market, they might think it’s perfect, but the market may not. And at that point, they already invested too much in it. It’s not that we’re shipping something that we don’t think works; we are shipping something that we know checks just one of the boxes that our customers need.

“It’s just human nature that we want to put out good work, we have pride in our work. It’s one of the one of the real paradoxes of entrepreneurship is that we are all perfectionists and Type A personalities. We want to control it and we want it to be right, but also to be successful. The only way to succeed is to let go of some of that, to allow our teams to do the work, and be able to ship an imperfect product to get real feedback.”

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#94: Practical M&A Advisor Explains SaaS Valuations and Acquisition Trends – Adam Haynes

Adam Haynes is a managing director at GLC Advisors, an M&A advisory firm that helps bootstrapped founders to successfully sell their companies. The software advisor team at GLC has been working with practical software founders for over 15 years and has completed over 100 software transactions.

In this expert interview, Adam shares:

What has changed in software acquisitions in the last 20 years and recently through 2024
What are the valuation ranges and factors for practical SaaS companies under $10M revenue
The 7 key areas that founders should be working on several years before an acquisition
When should a SaaS founder consider using an M&A advisor

Quote from Adam Haynes, M&A Advisor at GLC Advisors “When you are selling your company and the buyer is looking at all your challenges and problems, founders should know that deal breakers are very rare. Buyer and seller want to get a deal done, and there are ways to navigate around them .

“You can’t have a software company without tech debt. That’s okay. Nothing’s perfect, but you need to have a remediation plan for it. If you were going to close a couple of big deals during diligence and you don’t, or they get delayed, the valuation may take a hit. Or they might inject some structure like an earn-out if you can get these two deals signed.

“But if you don’t own your IP and don’t own or clearly license all your code, that’s tough to navigate around. Or if you’ve infringed on somebody. That can be a dealbreaker, but it isn’t that common.”

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#96: Expert Explains Payments Monetization For Your SaaS Business - Brian Abernethy

Brian Abernethy, founder of Utopaya, is an expert in helping SaaS leaders navigate the complicated process of adding payments monetization to their product offerings and business strategies. With a long history in the payments industry, Brian has worked with hundreds of early-stage SaaS leaders and their investors to optimize their payments strategies.

In this expert podcast interview, Brian explains the basics of payments monetization for practical SaaS founders, answering questions like these:

When should SaaS companies consider monetizing payments and when is it not a good fit?
What are the first steps to adding a profitable payments offering to your SaaS product?
What’s happening in the payments industry to make it easier or harder for SaaS companies?
How do investors value payments offerings in a SaaS business?
What are the biggest misconceptions and mistakes that SaaS companies make when get started with payments?
How can SaaS businesses lower their payments bills for the credit card customer they take from their customers?

Quote from Brian Abernethy, principal at Utopaya “Most software companies are looking to include some type of fintech offering. Payments is typically the first one of those. These software companies want to own not only the bigger portion of revenue, of course, but also mprove the customer experience.

“Recent consolidation in the fintech and payments industry has created new options for SaaS companies to monetize payments. The big payments providers are now much bigger and have moved upmarket, creating a gap. Many new payments players are designed for smaller SaaS companies, with purpose-built platforms, APIs, and more support for integrated software solutions.

“There are more compelling solutions for SaaS companies to launch truly white-labeled, profitable, and easier-to-implement payments solutions. Also, the market data show that it does positively change the customer experience, so these smaller payment companies are winning share at a fast clip. “

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