
Churn Buster Gets Acquired - michaelbuckbee
http://churnbuster.io/acquisition
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patio11
That's awesome news -- I (well, AR) had been a customer since very early days
in the life of the product. It integrated pretty painlessly and basically gave
us an accounts receivable department without having either myself or my sales
rep having to spend lots of time calling $29 a month accounts to see if they
were soft-canceling or just having transient billing failures. The ROI on it
was stupendous -- I remember saving $100 in MRR in the first two days on a $50
a month plan.

Anecdotally, there seems to be a wave of mini-acquisitions going through the
small-SaaS-osphere this last year or so. I think it's an interesting
development, partially do to the obvious reasons (money for founders is nice),
partially as it frees up founders to move onto their next level, partially
since these seem to be better digested than acquisitions in VC land, and
partially just because it is interesting to see this side of the fence
maturing a bit.

~~~
goldvine
That's really great to hear, Patrick.

We're pretty excited about how we structured the deal, and it's definitely not
the way things are done in Silicon Valley. Even down to the expectations of
our investors. We're setting out to grow a profitable business with the goal
of early and lasting distributions for investors...not with the goal of an
eventual mega-exit.

Happy to answer any detailed questions specifically about the
structure/acquisition process (negotiation/due diligence/lawyers/etc),
something you know plenty about :-)

Also of note, we didn't use an escrow account, or a website broker. This
probably saved about $20k-$30k. We had an advisor, JD Graffam of SimpleFocus,
that helped coach us along the way based on his experience acquiring products
like Ballpark App.

~~~
porter
I'd be interested in this. How was the deal structured? What did your due
diligence phase look like? What sort of multiple of revenue range is this in?

~~~
goldvine
Can't specify any financial details (sorry!), but the whole process lasted
about 3 months.

Legal fees were reasonable using a local attorney that another startup
introduced us to (with experience in M&A).

Due diligence included reviewing ROI reports (how well the product works for
clients), financial reports of the company (where does revenue stand, how fast
is it growing), current customer lists, past customer lists, all support
conversations (how happy are customers, how fast are support requests
handled), and gathering listings of accounts in-use that would need to be
transferred.

We decided on a purchase price before entering due diligence, but saved equity
offerings until after the deal had closed. At that point, we brought in our
investors, and offered Andrew a priced option to invest (at a higher valuation
than the purchase price based on the expanded team and advisors).

If you don't have guidance from someone with experience, you should probably
use a broker. And if you don't know the seller super-well, you should probably
use an escrow company for the transfer of assets. In our case, we knew we were
working with a stand-up guy based on our friendship with Andrew, and how
wonderful he was throughout the entire process.

Let me know if I can answer anything else! Matt

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aculver
Hey all, I'm the creator of Churn Buster.

Over two years ago I was working on Stripe web hook emails for a client and
spending way too much time tuning, tweaking, and maintaining them. Every
little improvement was yielding even greater conversion rates and more money
in the bank. At that point, I suggested that instead of paying me so much to
maintain the in-house dunning system on their behalf, I could create a service
that did the same thing but better, and charge them $200/mo instead. The plan
was to subsidize the cost of development by selling the product to friends who
were having the same problem. I've been working on it and growing it ever
since.

I'm really proud of some of the incredible companies and brands I've had the
opportunity to work with in the last two years, (some of them are listed on
the new product homepage,) but I'm also really pleased to now be able to put
the product into the hands of Matt, Joelle, and Ken and let them take it's
growth from this point forward.

Happy to answer any questions anyone may have!

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goldvine
Thanks for sharing, Michael!

Matt here, new CEO of Churn Buster. We're so freaking excited about working
with Andrew, and our other investor Rob Walling (getdrip.com).

Andrew has really built something special here and I think his excitement
shines through in his announcement video.

If you have any questions about the acquisition/round of funding (it was
pretty unique) or about churn, failed payments, etc. just post 'em here!

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TeeWEE
Wow, the website of churn buster explains NOWHERE how churnbuster actually
works. Just pointing to tweets, and saying you have "algorithms" doesnt cut
it. This is a crap landing page (for tech savvies). But maybe only marketing
guys are landing at that page.

~~~
zeeshanm
patio11 summarized churnbuster pretty well here:

>> [Churnbuster] integrated pretty painlessly and basically gave us an
accounts receivable department without having either myself or my sales rep
having to spend lots of time calling $29 a month accounts to see if they were
soft-canceling or just having transient billing failures.

------
michaelbuckbee
I posted this as I'm just constantly amazed at what a dynamic and big
ecosystem that Stripe has created around itself.

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adraper
I've known Ken for many years, and I can say without doubt Churnbuster's
exactly what he's great at. I've also followed what Matt/Joelle have done for
awhile and think quite highly of the whole team. I'm sure they'll do some
great stuff with this product—i'll definitely be referring it to many people
in the future!

