Achieving big exits in the SMB sector

I gave a talk this week at the Small Business Web Annual Summit on how to achieve big exits for startups serving the SMB Sector. If you don’t know about the Small Business Web Association (and your startup serves SMB), you should sign up. The event featured execs from 400 SMB-focused companies. It was a great opportunity to connect and compare notes on growing great companies in this sector.

Anyway, my talk was on SMB exits. The SurePath team helped me crunch a bunch of data, looking at IPOs, acquisitions, who the most active SMB buyers are and what the key success factors are for companies that achieved great exits in this space.

Here are the slides. Continue reading Achieving big exits in the SMB sector

Exits in Canada: April 2016

Screenshot 2016-05-01 22.41.34

After a strong March, April was a pretty tepid month for software exits in Canada. Highlights:

  • 11 deals announced (15 last month)
  • 2 deals had a disclosed value, the largest of those being $ 14M.
  • 3 of the companies were in Toronto, 2 in Ottawa, the rest were distributed
  • 2 of the 11 companies were VC-backed, the rest were either bootstrapped or had not raised any institutional funding
  • 5 of the buyers were Canadian, 3 were from the US, the rest were distributed
  • 5 of the buyers were public
  • Median time to exit: 15 years (11 years for last months’ deals)
  • Shortest time to exit: 5 years (although there was one stealth company that may have been younger
  • Longest time to exit: 37 years!
  • All of the buyers were strategic. No private equity deals this month. Same as last month.

All in all, a pretty underwhelming month.

It was nice to see Toronto’s Wattpad show up as an acquirer having bought stealth company Anirobo.

As always, I report on these each month. If you’re interested in seeing the underlying data, I keep it here.


The long, windy road to a closed deal


The typical way that startups raise capital is to wait until they have 6 months of runway and then start a roadshow. They put a slide deck, model and pipeline together and hit the road.

Sometimes, this approach is unavoidable. Especially early on when you have less time and runway to be strategic. The problem with this approach, however, is that you are more than likely to get lots of “no”s.

The reason is that you’re asking relative strangers to enter into a multi-year, illiquid, risky relationship with you. You have to raise now. You leave no time for potential investors to track your progress. So, they will probably just pass. Continue reading The long, windy road to a closed deal

Creative ways to scale SMB customer acquisition

Many startups begin life selling to small business (SMB). SMB is a very appealing market. For one, it’s big (30 million businesses in the US alone). Also, they make quick buying decisions. Sounds great!


The challenge with SMB as a customer segment is that each customer is small. It might be easy to get your first few customers. But over time you become a victim of your own success. The bigger you get, the higher your customer acquisition costs go. Hubspot’s CEO Brian Halligan illustrates this challenge beautifully in his recent post ‘why aren’t there more Intuits”.

Building the next Intuit…

If you sell more to the ‘M’ (i.e. mid-sized businesses), then you can build a large inside sales team. This is what Hubspot does. This is also why they raised boat loads of capital. Once they got their fundamental unit of growth working, they never stopped hiring sales reps. Continue reading Creative ways to scale SMB customer acquisition