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Tiny (tinycapital.com)
588 points by omarfarooq 55 days ago | hide | past | favorite | 152 comments

Thanks! Macroexpanded:

The Berkshire Hathaway of the Internet (2017) - https://news.ycombinator.com/item?id=28806500 - Oct 2021 (42 comments)

Andrew Wilkinson and Tiny Capital - https://news.ycombinator.com/item?id=23739381 - July 2020 (16 comments)

Berkshire Hathaway of the Internet - https://news.ycombinator.com/item?id=13905777 - March 2017 (112 comments)

Tiny is basically as advertised. A few years ago, I tried to sell one of my businesses to them (Zack) and he was straightforward in his reason to pass back then (profit too low). Took about a day once I had my metrics sorted.

The experience was positive and re-enforced my understanding of important growth metrics and product storytelling.

Sounds good. An instant NO is better than a dragged out and expensive NO.

Also good dating advice.

Indeed. Bested only by ghosting.

I have to disagree. Only in the rare case of potentially dangerous people with no way to hunt you down does ghosting seem appropriate. Everywhere else it strikes me as irresponsible, callous, and potentially damaging to the ghost's reputation.

Rejection does not have to be harsh. "I don't think we're a good fit," is easy to say, hard to argue with, and provides no concrete mistake for the rejected party to feel bad about, if that's something you want to avoid. (Personally, at least after sufficient time has passed, I prefer someone actually tell me what they didn't like, but not everyone feels safe doing that.)

Ghosting is better than no?

Allow me to be cynical for a moment, for the sake of debate: if your business is profitable, why sell it for what Im assuming is going to be low multiple to a non-strategic buyer like Tiny?

Maybe you are burned out of running a company and want to do something else with your life or another business adventure. Or maybe the fun part of the business is done (ie building) and now its optimizing.

Also maybe you dint see the future is as bright as the buyer. Lots of reasons to make a move.

All things being equal, you would not sell a _growing_ profitable business for a low multiple to a non-strategic buyer.

You would, perhaps, sell to a PE firm like Tiny when you believe you've exhausted growth.

That, or the traditional 3 D's: death, debt, divorce.

Sometimes, a business is profitable, but doing something else may be more profitable (and that does not necessarily mean monetarily). When you have that insight, it's time to sell.

I run a profitable business (1.5m+ revenue at 90%+ margins). I would love to sell it and do something else. I even think you can grow it in relatively straightforward way, I just don't have the energy to make it happen. Sadly it's a niche business, might be difficult to run by outsiders. The reasons I want to sell are that I want to do something else and that I am already set for life (maybe not fully Fat Fire but very close).

With your experience do you think it is possible or how realistic it could be to put some talented person as a manager instead of yourself and thus allow yourself to do something else without actually selling it?

There for sure are tons of people willing to manage someones else business if you pay them well. However how talented or good they are is a totally different thing.

Maybe the business isn't profitable / exciting enough to make the founders want to continue dedicating their time to that particular company / business model, but could be appealing enough for another organization to add to their portfolio.

Yes, having been through situations like that you can feel bummed and dejected at the time because the deal didn't go through, but when you look back it can seem like a really positive learning experience.

What sort of profits are they looking for?

It is a little hard to judge what is "Tiny" when things called "Pre Seed" ( What is that anyway ? ) that goes up to millions.

From $500K to $30MM.

It's listed at the bottom of the page along with 3+ years operations, high margins, simple business, unique, and ethical.

>It's listed at the bottom of the page

Thanks. Somehow I completely missed it.

But Wow that isn't tiny at all to be honest. $30MM profits is massive.

> profit too low

> important growth metrics

> product storytelling

Yup. Everything that's wrong with (predominately US) modern business culture.

Product doesn't matter, storytelling is. Nothing matters, inflated growth metrics do. Profit doesn't matter unless it's high (for some definition of high), but even that doesn't matter if you have hyperinflated growth metrics.

Everything that's wrong with (predominately US) modern business culture.

You're confusing "business" with "investment".

Business is the act of making money right now. Buying stuff, selling stuff, providing services, and making enough money to keep the lights on. That's really important stuff. That's how we pay our mortgages and buy food and XBoxes. When you're running a business that stuff should always be front and centre. It's what's important to employees, and the economy, etc.

Investment is the act of using money now in order to increase the amount of money you have in the future. Profit, product, and metrics right now are much less important if you're thinking about what happens in 1 or 2 or 5 years time. A company with a good-but-not-great product today could be the next Apple if they're able to realize the potential of the market - that's what investors are looking for. They don't really care how much a business is making today if they're thinking about where it could be in 5 years time.

> Business is the act of making money right now.

No idea what type of business you're running. Businesses always looks ahead (unless it's a scam-and-run operation, of course). And investment is also business.

However, the incentives have now been twisted beyond all recognition.

See also, https://en.wikipedia.org/wiki/Keynesian_beauty_contest

It doesn't even matter if the business will have profits, it matters if the business will look to future investors like it will have profits.

If only this were Keyne's most famous theory. I believe he (or the greater school of thought built around him) did argue that stimulus through discounted interest rates should be balanced in a timely fashion. But I have to look around the world and wonder which - if any - of our leaders is brave enough to do this? The long trend downwards in interest rates everywhere has not had the desired effect and there are a lot of negative side-effects. But on paper the CPI is kinda OK so it's not a problem, right?

Without my glasses on, I read that as Kanye’s and was really confused for a good minute.

Keyne West is a well-known creative genius

Kind of like crypto, nfts, or stocks right?

And not actually caring about the problem at hand.

"Dude! We could make so much money if we made X!" - but do you actually care about X? Why is money the only reason people are setting up business and solving problems? It should be secondary, a happy side effect of solving hard problems (which people will thank you for with money.)

If someone solves a problem of mine because they're motivated by money instead of the problem domain I don't really care.

Are you upset that the gas station operator doesn't have a hobby about gas?

ppl aren't very good at solving problems they don't have. i imagine it's hard to design a good/efficient gas station if you've never used one before. service reps/tech support aren't very good if they don't use the product. software sucks/is slow to use unless the designers also use it on the daily and feel first-hand what the pain points are.

I can jive with the idea that people aren't "very good" at solving the problems they don't engage with, but I think it's important to acknowledge that plain old "good" can be enough.

To wit, I'm not going to be upset if tech support takes 3 minutes to process my question and reads out an answer from a pamphlet in monotone if it is indeed a solution to my problem. And there is some software that I use _despite_ its pain points because it solves problems I have.

> gas station operator

They didn't build the business. They're an employee.

Because people want to pay their rent and eat. “Hard problems” take a lot of work and time and no one is going to pay me to ponder on a tricky algorithm [1]

[1] actually there is. It’s called “academia” and from what I’m told it’s pretty miserable to be in

Agree. Very hard problems or big investments (e.g. rail network, infrastructure at a country level, basic research with high risk of failure that will take decades) you usually have some form of state agency running it.

PS: have not heard a good word about academia from numerous friends in it. Might be regional (EU) but still...

> Agree. Very hard problems or big investments

Who said anything about hard problems or "big investments"? I never said that. Why are you saying that?

> Because people want to pay their rent and eat.

That's the wrong reason to set up a business, but the right reason to simply get a job.

> “Hard problems”

Who said anything about hard problems? Are businesses only designed to solve hard problems?

The thing people (read: businesses) want to pay for is a) increased revenue or b) lowered costs. You better have a _very_ compelling story on why your product does one or the other, and why they should pick you and not one of your three competitors.

They passed due to lack of sufficient profit so I’m not sure you’re point.

Product storytelling doesn’t mean smokes and mirrors.

They’re buying businesses so it seems like criticizing them for caring about high profit is misplaced.

It seems to me that the opposite tendency would vastly decrease the pace of innovation

> vastly decrease the pace of innovation

What innovation?

A close friend of mine sold them a business. They are quick as advertised but pay bottom of the barrel multiples. Helpful if you need cash quick I guess.

We sold Unicornhunt.io to Tiny Capital a few years ago and it was a relatively painless experience ( selling up is an emotional thing as is ) and I'd strongly recommend to any indie founder looking to exit.

Feel free to email me on benjamin@peaceandlove.io if you want to discuss it further.

Did you have more than $500K profits at year before selling? What it was the sold EBITDA multiplier?

I wish companies would indicate which countries they operate in!

When it's not mentioned I just assume it's US only. Which is usually the case.

IIRC Tiny came out of MetaLab and MetaLab is Canadian.

Don't know if they might be registered elsewhere though. They probably are.

If so, no wonder. I've done a lot of data analysis contracts over the years and they were, by far, the most concerned about protecting user privacy way before it was cool. Tiny sounds just like their values.

Sometimes I wonder whether I should go and try to buy a micro SaaS business (I am an SWE) that's already out there just for the sake of trying to learn the ropes on how to do a business.

Convince me this is a bad idea.

I think it's a lot harder to pick a good business than you think. Many "micro" sized businesses have significant issues and avoiding them requires you to know all the right questions to ask.

If you are able to make the right pick and the size of the deal is something you're comfortable seeing go to zero, it may be a good learning experience.

However, you'll be learning to acquire and keep a business alive, not start a business through this. Some things may remain the same depending on the stage of the business but if you're looking for experience starting a business, I think starting on and failing will be better training (and free)

Yeah I expect this. I think I would like to start from something I am somewhat familiar with.

Interesting note about "acquiring and keeping a business alive, not starting a business", I am under the impression that these two skills are related, if not the same.

They're definitely related (and more so the closer to start a business is). Depending on the business you may be benefiting from research, product/market fit, marketing, experiments, and on and on.

It's not that the stuff you would do isn't relevant to starting your business but that it's not the complete picture.

I think it's a great idea. I'm a SWE and have purchased three now. It seems way easier to run 3 micro businesses than it was to deal with everything that a typical job entails. I think the risk is quite low for most SaaS products.

If you don't mind sharing, how did you discover and pursue your targets? Would love to learn more on this.

how much did you spend on each and were there any buyer protection clauses (like earnout) you put in place?

Wow interesting! Please share!

The book E-Myth is about just such a scenario

Will take a look! thank you

Perhaps try to build your own and run that instead? To be honest I think you'd learn more about how to buy a business than how to run one if you bought one instead.

Starting a business is a lot harder than running one.

If you buy a business, you have the opportunity to scale and fix issues (code, business model and otherwise). Starting something from scratch involves a lot more work and skills.

> Starting something from scratch involves a lot more work and skills.

Starting vs. buying/scaling requires a different set of skills and perhaps different work, but roughly the same amount as starting. Source: I've done both.

I have no experience in doing it, and also don't have an idea that is worth selling :(

See also https://open.store/ for Shopify stores.

Andrew Wilkinson, co-founder of Tiny, has done a lot of podcast interviews. If you consider selling your business to Tiny, you should listen to a few of his interviews first to learn about his startup journey, Tiny's approach of buying businesses, and himself :) Search "Andrew Wilkinson": https://lnns.co/2lXRHeZc17A

What's the catch with this, I wonder? If it's so easy to cash out, what does that mean for the price at which you cash out?

How does Tiny manage to stay non-interventionist as they claim?

It's interesting but I think there has to be more than what's pointed out here going on

The catch is that your business has to be in pretty darn good shape. They won't just buy any company, you have to prove it is stable, profitable, and growing.

> you have to prove it is stable, profitable, and growing.

I just cannot imagine selling my business if everything was pointing upwards like that.. but people are different I guess

I can; it's if you want to cash out now instead of accumulate money over the next twenty years. Plenty of people who do that trick (start a company, cash out) a few times. They call themselves "serial entrepreneurs", which either means the above, or they've left behind a long string of failed businesses.

> or they've left behind a long string of failed businesses.

The best kind of serial entrepreneur :-)

I guess in that sense Tiny is kind of like Pipe for founders

The website gives an example:

> You've got early employees, investors, or a co-founder who wants to leave or cash out. You want to swap them for a friendly new face who can add value and help you grow the business.

This is common in professional groups (like law firms or medical practices) when a partner is looking to retire.

Selling out is common; I just hope and think I would not do it, but who knows. I've never been in the position to sell out :-)

Unless you plan to a) run the business until it fails, or b) pass it to your offspring, you're going to sell at some point, right? Given that, it makes sense to give at least some thought to what that point might look like before you get there.

I guess you're right; just sounds so sad to sell a company just when things are looking good...

It's sadder to have to sell when things are looking really bad.

Well, if someone want to buy my doomed company; that's not all sad :-)

Selling out in other industries is looked down upon (eg former indie musician selling out for a mainstream record contract), but business is, well, business. Better to be honest with yourself that your heart's no longer in it (if it's not), and sell to someone who is.

> Selling out in other industries is looked down upon

That is certainly true. When people have a ton of money and sell out for even more money, that's always somewhat looked down upon I guess? Either its Joe Rogan or Notch, it almost seems sad to see people want to get richer when they're already absurdly rich.

The strangest thing about wealth (or power) is that once you get it; you seem to loose control completely. From that point on; all you want is even more money or power.

There are probably many examples of people who managed to give up power or money, but the majority seem to want hang onto it...

It can be stable, profitable, and growing and you might still be burned out, or have an even better idea you want to focus on, or just want a change.

True; but from what I've seen it seems most people who start businesses have a very hard time letting them go, even when they are doing badly; but I guess there are circumstances where it makes sense to sell out.

By selling you get to access the money NOW, instead of waiting (and working) for years.

There will usually be tax benefits as well (capital gains vs income).

I would also have to assume if your business is all those things you're likely going to be leaving something on the table in exchange for the convenience of the process. (Which might be a perfectly rational thing to do when you're ready to exit!)

I imagine it has to be something that another company can generically understand and take over. A startup where the founders deep domain knowledge / connections is the key - that domain knowledge / connections go when the founder leaves.

If that's the case then why are they ok with the founder leaving? I don't think this is a scam or anything, I just wish I understood the mechanics of how their business works better than I do

By the time the business is "stable, profitable and growing" the founder is likely far less important than in the beginning.

There have to be processes in place to manage the business's day to day operations, and a good management team that looks to the future. You can't maintain a business at that level while still being dependent on a single person so the business at the time of sale has to be capable of continuing on without that person present.

You might be relying on the top person for the “growing” part even if everything else can tick over nicely.

They are going to expect that the founder can leave a functional company.

A company that requires them to build a leadership team or hire replacement talent to maintain doesn't sound like what they are looking for.

If needed, the founder should do that first.

yeah, good for if you want to develop another business but not detatch yourself from that one for example.

They're ops guys. Andrew and his partner Chris work off of the Buffet/Munger model used at Berkshire Hathaway. They buy good businesses they think are undervalued and then bring in their ops/logistics experience to (if necessary) install a new team, get any loose ends cleaned up, and then send them on their way (retaining ownership via Tiny).

They find ATMs, upgrade their software and case, and then let them run. Over time, if you're good at it (they are), you build a portfolio that is consistently cash flowing vs. a bunch of lottery tickets like the traditional VC model.

In case someone from the company is reading, the current background blue color is quite harsh on eyes, especially when reading text.

Please try using #3f51b5 or something similar. Other than that, love the design.

Another opinion: pastel blues like #3f51b5 remind me of Facebook; current #1a21ff feels unique and it's comfortable enough to read for me. Especially given a rather low amount of text combined with cards with different backgrounds.

I like it. Reminds me of DOS.

Is there a story behind the cruel-sounding "Cap table cleanup" heading? It says:

  > You've got early employees, investors, or a co-founder
  > who wants to leave or cash out. You want to swap them
  > for a friendly new face who can add value and help you
  > grow the business.
It feels like they're insinuating that there's usually a painful process in enabling people to cash-out and leave? Is this because of the whole "golden handcuff" thing and the risk of everyone just wanting to leave immediately? To me that's always seemed like a larger problem in how we arrange early equity. Incentives are malformed.

It's a positive thing, just written weirdly.

E.g., an early employee takes a moderate salary plus X% equity.

Normally that person is stuck waiting until a liquidity event (like an acquisition, IPO, or late-round funding where some private shares can be sold).

But if the startup has shifted from hypergrowth mode to realizing that it's going to be profitable and stable, then that liquidity event won't ever happen.

So Tiny is basically saying, hey, if you've incentivized your people with equity, but you're no longer on the VC exit path, you can set up a deal with us where those people may choose to sell us their little slices of equity, which gives us some ownership and gives them the financial windfall they were originally hoping for.

It just means you need a liquidity event. Many investors don't want to cash out early stage employees, many PE will only want to buy the whole thing. If the business can't take out a loan or similar, and those staying can't afford it, you need a new investor who's up for this type of restructuring.

pg and others commonly cite founder divorce as reason startups fail. If Tiny et al can workaround for this (liquidity + recruiting network), they can unlock value that would otherwise get destroyed by shutting down a nascent startup prematurely due to human conflicts.

Just a heads up that you don't need to add a new ≪ for each line of text in the text area, everything after the first ≪ will be quoted untill you double 'enter'. Cheers

Not really. HN doesn't support any quoting syntax/formatting. There's a common convention in use of putting a ">" (not "<" or the more relevant ">") at the start of a quoted paragraph. The "problem" with the above comment is they indented the quote, which formatted it as code, which wraps strangely, so they wrapped it manually.

Oh very silly of me. Thanks for the correction.

The wording really creeps me out, it's kinda condescending like, we'll just work our way in and tell you how to run your business.

For B2B SaaS and dev tools/infrastructure there is https://xenon.io/ which operates with similar principals it seems.

For a data point, they bought Baremetrics and immediately removed the cancel button (which itself is a Baremetrics feature!). Now you have to call them to cancel.

I guess that is exactly the kind of stuff you'd expect a SaaS PE firm to do, but it still feels a bit sleazy to me. IIRC the founder reported that from his perspective, they handled the purchase well though.

They probably have a checklist of best practices (depending on the interpretation of "best") they immediately apply to almost every SaaS they purchase.

(Principles. Lots of people making this error these days. A principal is e.g. of a school, or a loan.)

Principal investor is a term of art in the industry. It has other financial meanings as well.

Principles are ideals you adhere to or uphold. They are also concepts used to implement a design. Principal and principle are homophones, and they are commonly mixed up.



Are you disagreeing with me?

No, I was just trying to disambiguate the terms. Sorry if it came off that way.

Yeah, some guy in finance wrote a whole book using that stupid term!

> We pay finders fees of $25,000 to $200,000+, all you have to do is intro us.

hmmm - not a bad payday just to be a referral

Yeah there's got to be a catch there, nobody works for 'just a referral' that doesn't result in something significant.

Obviously the finder's fee is only paid if it leads to a deal.

Typically 'finders fees' are only paid out on a successful execution, don't see why this would be any different.

The founders also have a Spotify marketplace sidekick to Tiny https://www.wecommerce.co/

Shopify, not Spotify.

Now I'm left wondering what would be needed to piggyback on the spotify success, though. A marketplace for in-podcast-advertising? A (digital) agency that helps musicians sort out "all their Spotify administration, artwork, etc" so they can focus on making music?

Funnily enough, Tiny is in an adjacent market to this via one of their companies, Supercast[1]

[1] https://www.supercast.com

Anyone here sold to them?

Curious about what kind of ARR multiplier they use.

Can anyone say how much it costs a founder to go through the process of being propositioned and then either rejecting the suitor or be rejected by them?

This is quite interesting. Are there any competitors/similar companies?

Not looking for IAC, but smaller upcoming companies.

Similar but different: a company called MicroAcquire[1] facilitate the buying and selling of small companies, though unlike tiny[2], don't acquire them themselves.

[1] https://microacquire.com/ [2] https://www.tinycapital.com/

MicroAcquire is just a marketplace, and IMO not that good (as a customer looking to acquire).

Tiny is explicitly modeled as a mini Berkshire Hathaway for tech (they also, as a sideline, sell bronze busts of Charlie and Warren). An easy exit for those who don't want to see their work dismembered. They also part-own WeCommerce, a canadian public company doing the same for shopify apps/themes/agencies. (disclaimer, I also am a shareholder--no advice)

Can you elaborate more on your experience with MicroAcquire as an acquirer? Is it that you don't see enough deals? Not the right size? Bad companies?

I'm not affiliated with the company. Just stumbled upon it a few weeks ago and was curious about the deals stats (size of companies, stage, etc.).

It's not horrible but I haven't found anything I like on it yet. One issue is that the UI kind of sucks (hover state button for more info on a company, vs clicking the name of the company, which is always redacted until you contact them). I would like more info on the companies before contacting. Another is that the microsaas category seems to be very micro on the traction/revenue and very macro on the multiple/pricing. Like if people are getting these prices good for them, but it's not attractive for me to wade through right now.

It feels like I'm more likely to find something vetted and legit at a reasonable price through a broker like FEI.

Looks to me to be similar in approach and philosophy to Constellation Software (https://www.csisoftware.com/), which has done very well.

It looks like regular capital but really tiny


That background blue is hideously bright and hurts my eyes when I try to read any text on my desktop monitor. Why hasn't anyone told them that?

Why is it automatically a problem on their end? Maybe your monitor brightness is turned up too high. It's perfectly fine on my monitor.

More to the point, the people that are generally visiting their website are not the sort of people that would be wasting their time moaning about the colour of a website.

If someone moaned about the colour to them, I'd wager a bet that they'd know to never do a deal with that person.

Probably because for the people that visit their website, the last thing they'll notice is the brightness of the background color.

Maybe they even feel that discomfort, but the rest is enough to keep them going.

This reminds me Apple in the early 2000s: a simple message promising a fundamental improvement in some aspect of the world.

If it lives up to the message, this would grow into a massive fund, just as Apple grew into a trillion dollar plus company, and like Apple, this capital would enable this company's to realize its vision at a global scale.

The free market is a beautiful thing.

I like this new style aesthetic that I’ve been seeing on a few sites. minimalism the right way

From the wired article: “It really boils my piss to be honest,” says Jack Hurley, a Leeds-based illustrator who says his main output is “daft seaside posters.”

Ooh there is a name for that style! Didn’t know that.

I see it everywhere. It feels very generic most of the time. Some graphic artists do it well though.

What other examples do you like?

I found it easy to use and it left no ambiguity around what Tiny is and how it works

It's sooo much blue though

Do you buy legal entity based in EU (Italy)? or only US?

What happens after Tiny acquisition? Cost cutting?

I worked in a US group that acquired competing SaaS products. The individual teams were small and had jack of all trades. The group prided themselves in attaching rocket engines to the bikes they bought. They could outsource specific work to India (yours truly) and other countries, hire top engineers, consultants and designers full time to improve multiple projects, monitor uptime and performance, build a big customer care team (India and other countries) and more.

I'm speculating, but based on friends who work in this industry the apps are put into maintenance mode, with one hired/contract developer in charge of two or three apps — assuming it's a SaaS app that doesn't need a team.

If the product is still on a growth trajectory or needs a specialised team I think it's a very case-to-case basis. Cost cutting is one tool in the toolbox, and it's usually only used when the owner thinks the product is already dying and wants to squeeze value out of it. From what Tiny says they might not be buying products like that.

That said, I feel like the Baremetrics emails started getting a little more spammy and frequent once they were bought, but I might be mistaken, it was a while ago. It's possible there's a growth hacking team that Tiny has that takes over all the products.

do you have to sell 100%? is 49% possible?

Also, how small the businesses are? What if you're doing 7 figures ARR?

Is anybody else super tired of this aesthetic:


I know companies all jump on design bandwagons, but this one of these hideous illustrations of amorphous blob people is not only one that every company has been riding for the last few years, but should have never existed in the first place.

Not to mention the egregious usage of 90s HTML hyperlink blue. I get it, that ugly is ironic and cool, etc, but I'd really like to just pass through this phase of ironically self-aware, ugly design.

I recently learned this has become a meme and is called (amongst other names) "globohomo" art style.


A more politically correct name suggested by Consumer Aesthetics Research Institute is "Corporate Memphis": https://cari.institute/aesthetics/corporate-memphis

"globohomo" meaning "globalized homogenization". Nothing to be offended by.

At least their images are connected to the message somehow.

Most of the sites I see using this nowadays just slap them there like font icons, i.e. just to look cool with the graphic having absolutely no relation to the text.

Almost as tired of as of "incredibly". Thus, incredibly, deeply, profoundly tired of.

This use is what linguists call a "generic intensifier". It is somewhat less bad than misused "exponentially" or "literally".

oh my eyes

Don't like calling out things, but Sophia with GirlBoss got lucky.

Do they accept NFT projects?

> but Sophia with GirlBoss got lucky.

Without some background and/or numbers that really is "calling out things". Could even be considered gossip or slander.

I'd never heard of GirlBoss before, but I put it on my podcast-list just now because the topics look very interesting.

I hate this art style. Facebook and related have been pushing it for a while and it has become just repulsive to see now.

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