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SaaS Interviews with CEOs, Startups, Founders
Masters of Debt: How I bought a $5m SaaS Company Using Debt, Grew to $20m, Then Flipped for a Huge Gain
Dec 14, 2023
A guest shares their success story of buying a $5m SaaS company using debt, growing it to $20m, and then flipping it for a huge gain. They discuss challenges in advertising and sales strategies, acquiring a SaaS company and increasing revenue, transitioning customers from perpetual licenses to recurring fees, and negotiating traditional and mezzanine debt.
22:17
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Quick takeaways
- Look for companies with one-time payment models and transition them into recurring revenue models.
- Consider acquiring Chrome extensions with large user bases and dormant updates for value creation.
Deep dives
Brad's Story of Buying SaaS Companies
Brad is a creative capitalist who buys SaaS companies at low multiples. He purchases a $5 million AR company, only using $2.5 million of his own equity and the rest in debt. He grows the company to $15 million in ARR, sells it, and continues to make significant returns from dividends. However, after two years, the company's size has decreased, and they now generate around $12 million in revenue and $2 million in profit.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode