Cody Halff

M&A @Scaleworks. Acquiring and operating B2B SaaS with $5m-$15m ARR.

[Cody Halff @codyhalff]

I swear this is 90% of how banks win mandates.

[Boring_Business @BoringBiz_]

CEOs giving the M&A mandate to whichever investment bank shows the highest TEV multiple in their pitch deck

[Cody Halff @codyhalff]

@dannypeavey Makes sense. Buyers pay more for numbers they believe in and don't have to rebuild. Doubt it's 2 turns, but it's not zero.

[Cody Halff @codyhalff]

@einarvollset Yep. Most vertical SaaS started as someone replacing a spreadsheet nobody wanted to maintain.

[Cody Halff @codyhalff]

The most annoying part of sell-side processes is how long it takes to get all the details. Waiting 2 months for anything beyond a CIM and a light model kills your momentum, and the details can have a big impact on valuation.

[Cody Halff @codyhalff]

@JesseTinsley Disagree. Even the PEs pulling back on "legacy SaaS" still have reasons to do tuck-ins because their organic growth is hurting. Then there's all the new hold co types. I'm not saying either pays great prices, but there are lots of them.

[Cody Halff @codyhalff]

@gregorykennedy The process part is what I think most people miss. They share a stream of consciousness then get frustrated when the output doesn't line up with what's in their head.

[Cody Halff @codyhalff]

https://t.co/ygFBihP8Hr Makes total sense. Never understood why you’d risk spending 6–9 months in a process just to hear a number you were never going to accept. Have the pricing conversation early.

[Cody Halff @codyhalff]

If a banker pitches you a valuation way above everyone else, ask what they think the other groups are missing. There might be a good answer, but “there’s a lot of buyer appetite in your space” isn’t one.

[Cody Halff @codyhalff]

@jkylemann Philoçoffee

https://t.co/LjsgvBYno2

[Cody Halff @codyhalff]

All cash if obviously preferable as a seller, but I think earn-outs can be effective when there is a gap between seller expectations and the offer. It all depends on 1/ what percentage of the outcome the earn-out is and 2/ the goal posts.

A growth earn-out on a flat business, that represents half of the deal value obviously isn’t fair. But if the business is confidently forecasting 20% growth, having a portion of the deal as a 20% (or even a bit less) earn-out can help buyers stretch to the sellers number while derisking.

But yeah, I’m sure more earn-outs you see are “overly ambitious” than not.

[Cody Halff @codyhalff]

Some hopefully common sense from @edbyrne!

[Cody Halff @codyhalff]

Any SaaS still chasing hyper growth dreams and burning cash is playing with fire.

Companies with solid fundamentals and even moderate growth are the new darling, I don’t think there has ever been a bigger focus on retention for buyers/investors than now

https://t.co/JLYWFPD3E1

[Cody Halff @codyhalff]

@carrynointerest @JosephJacks_ Depends on the VC say it’s 50/50 on getting a bank to sell it vs. just shutting it down. The burn is often too high to have time to run a real process.

[Cody Halff @codyhalff]

@JohnConstas Yes

[Cody Halff @codyhalff]

@CJBlomquist @OhhMar24 @LeBatardShow I can’t see his Elo, guesses?

[Cody Halff @codyhalff]

@pandemicsyn lol it's on my recently played, never stopped!

[Cody Halff @codyhalff]

@JohnConstas stress

[Cody Halff @codyhalff]

@galeforceVC @Scaleworks https://t.co/NqqhnyUhri

[Cody Halff @codyhalff]

@galeforceVC B2B software with 3-10m ARR is our sweet spot at @Scaleworks.