127: SaaS Businesses – Valuing, Investing, and Exiting with Dustin Struckman

Invest Like a Boss

Sam Marks Johnny FD Derek Spartz

Business, Investing

4.8 • 518 Ratings

🗓️ 28 August 2019

⏱️ 62 minutes

🔗️ Recording | iTunes | RSS

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Summary

Dustin Struckman is one of the founding Partners at Digital Acquisitions. Having sold several of his own businesses through his business partners previous brokerage, they decided to found Digital Acquisitions in 2016 in order to provide exit services to an underserved market segment. They are now one of the leading web-based business brokerages in the world.

During this episode, Dustin will share how to value, exit, and invest successfully in a SaaS business. Learn about the typical deal structures and digital acquisitions including Sam and Johnny FD’s experience selling their business. Listen to the end to find out of investing in a SaaS business is right for you.

Check out the new Invest Like a Boss Summit in California!

Links:

Discussed:

Diversyfund.com - Use coupon code BOSS20
ILAB 10 – Empire Flipper’s CEO: Investing in profitable, cash flow websites

Where we are:

Johnny FD - Tbilisi, Georgia
Sam Marks - South Carolina, USA
Dustin Struckman - West Seattle

Time Stamps:

03:34 - SaaS options that we personally use, today
05:30 - Backing and introduction into the SaaS business market
09:00 - How to value a SaaS business
16:08 - Building the value of tech into a SaaS business
16:58 - “The tech just comes along for the ride. That’s why SaaS businesses get a higher multiple.” - Dustin Struckman
20:20 - Comparing SaaS, eCommerce, blogs, and content site valuations
23:44 - “Things like SEO don’t necessarily increase or decrease the value of the business. What they do is increase or decrease the sellability of the business.” - Dustin Struckman
30:25 - Typical deal structure and digital acquisitions
37:24 - Selling Johnny FD’s first online business
40:02 - Selling Sam’s SkyCig company
47:29 - Leaving room for growth when selling your business
55:04 - Should you buy a SaaS business?

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Transcript

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0:00.0	Everyone, welcome back. We have a great guest on today. We're going to be exploring the wonderful
0:03.4	world of SaaS, none other than Justin Struchman. Justin, oh shit, let me start over. I said Justin.
0:10.8	We're like, you can't get started like that. All right. Hey, bosses, real quick before we actually get
0:16.8	started, I want to thank this week's show sponsor, Diversityfund.com. They help you diversify your
0:22.1	investments like the 1%. I'll tell you more about them during the break. Welcome to the
0:29.5	Invest Like a Boss podcast. I'm Sam Marks and I'm Johnny FD. We're self-made entrepreneurs who invest
0:34.2	our own money and use modern technology to invest like a boss. Join us each week for exclusive interviews with our network of modern investors, business
0:40.9	owners, and multimillionaires to discover new ways to invest our hard-earned cash.
0:46.8	Hey bosses, this is Johnny and welcome to episode 127 of the Invest Like a Boss podcast.
0:52.2	I am here in Tbilisi, Georgia, and Sam, we're in the world all you now.
0:56.2	Back in South Carolina, one of my favorite places in the old US of A. Oh, I love it, man. Good to see you
1:02.2	and join America, and I'll be joining you very soon for the Invest Like a Boss summit in L.A.
1:08.9	Looking forward to that. It will be hosted at Pier Street, and it's going to be great. I can't wait to be out there and Johnny, a little side trip afterwards to Vegas for any of those who care to participate. It's going to be a lot of fun. Yeah, it's going to be a blast. So if you guys want to get more information on that, we set up an official page. It's Invest Like a Boss.com slash summit. You can get all
1:29.8	the info there. Join the Facebook group as well, Boss Lounge, and we can have a discussion there.
1:34.8	Answer any of your questions. Looking forward to that and looking forward to this episode,
1:38.4	Johnny, to learn more about SaaS businesses, super hot category in online businesses and how we're going to value them,
1:46.1	how we can invest in them, and of course, how we can make that big lucrative exit in them.
1:51.1	If anyone's never heard of SaaS, it means software as a service. It's a reoccurring business
1:57.8	model. And it's one of the best types of online business because people sign up for a
2:02.3	monthly fee. And what are some examples? I'm sure there are some software as a service,
2:06.7	things that you personally use, right? Yeah, I think in a business to business sense,
2:10.8	there's the most applications. So there's Adobe, for instance, where you're subscribing
	...

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