?? I'm No Economist #18: The re-founder profession
?? Welcome to a new issue of I'm No Economist
You may have missed me last Friday, but it's for good reason. I needed a rest from my first week as an Entrepreneur in Residence (EIR) at Antler.
I am 1 of the 65 selected founders-to-be among 2,000+ candidates to be part of one of the biggest Venture Capital programs in the world.
I’m here to connect with like-minded people to create the newest startup that will take on its sector and change the world.
Antler is a Venture Capital firm with 25+ offices around the world, with a presence in every continent and an ambitious plan to fund 6,000 startups by 2030.
I know they will make it since they’ve already funded 920 in the last 5 years. One of them is airalo, which just raised its $60M Series B.
If you want to meet in person I'll be in Cubo, the biggest innovation hub in Latam until November. Hit me up!
You'll notice that this edition is not your usual Friday receiving of You Probably Heard About.
That's because I'm rethinking how I can provide you with intelligent information so that you can reflect and make your own decisions on things that really matter.
Instead, I have some news. Stay tuned!
?? Acquisition entrepreneurship
While looking for high-growth opportunities, I found out there are hundreds of bootstrapped, profitable micro and small tech businesses for sale.
These businesses, in fact, I prefer not to classify as companies yet. They are founded by indie developers who do not want to spend time in product distribution. The reasons are many. But most of them prefer building new products and becoming serial sellers.
They're not really into growth strategies. Or maybe they are and would grow if they could. There are many reasons for handing over these projects to an interested buyer - from “too busy to operate” to “I need cash for personal reasons”.
"I have a full time role leading dev teams. I also work 10-20 hours a week on a friend’s startup and I have 2 kids. I’m fairly exhausted and haven’t had the energy to tend to this"
I’m looking to continue building other projects and ideas."?
- Sellers of exciting projects.
That's it. These sellers see an opportunity to hand over their projects to someone with marketing and growth experience (and $) who can find new growth avenues.
???? The re-founder enters the room
If you don't know me, I'm Leo Torres, founder of I'm No Economist. I'm an experienced marketing professional who has spent 99% of his career working in the innovation ecosystem, especially customer acquisition and growth.
To a business that is in its super early stages, I'm the perfect asset to come into the picture and help it go from a (little above) zero to 1 and beyond.
As an entrepreneur, I learned how to discover and deliver new products to market. A scrappy skillset that is useful to startups, Valor 1000, and other corporations around the world.
That's why spent the last couple of years of my life as an Innovation and Growth Consultant, where I find, assess, and connect innovative projects together and help them innovate efficiently.
From early to late-stage companies, I've been in tech within different verticals: legal, tourism, real estate, education, martech, and fintech. The main companies I worked for are Zarpo, Company Hero, Bitso, Defy (founded and exited), Beta-i, and most recently an Entrepreneur in Residence at Antler.
Here are a few of the experiences I've had with the businesses that I've been involved with:
Not only as an operator but as an angel, I've invested in early-stage startups to solve deep-rooted problems in Brazil such as health, nutrition, and tax.
That makes me increasingly confident that I can put my experience as an operator and investor to work to build a new thing.
? The timing's right
Taking external factors into consideration, this is the perfect timing for building a cash-generating business.
The macroeconomic climate of high interest rates, a terrible wave of valuation markdowns, zero to low profits, and marginal growth, make investors look for operators who understand how to build and grow a business sustainably.
Investors are looking for savvy entrepreneurs within proven verticals. They want a steady return in profitable businesses with shorter mandates - cash is king!
Personally, this is the perfect timing for me. I’m No Economist is the result of a deep reflection about my Ikigay.
I worked my whole life as a Growth professional, and that's exactly what these businesses need. And doing so as an investor/operator is where I can truly generate long-lasting value.
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?? Who's doing it already?
This is not new. Buying and operating companies is a proven formula done since the dawn of time by private equity firms. However, within the private equity game, there are those that act more like a holding company.
Either buying and operating - with no exit plan ahead of them, or others that are keener on the idea of improving margins and flipping the businesses they buy. Let's dive into some examples.
1. Constellation Software (CAN ????)
Those who find the most success buying and operating companies forever usually do so within Vertical Market Software (VMS) businesses.
VMS is a $123B market globally and 28% of the overall software market, billing $100B every year. This type of business is on a steep rise, and it's expected to grow up to $400B in size by 2032 at a 12.6% CAGR.
On the top of the VMS Holdco food chain is Constellation Software, the biggest in the game, with a $43B market cap.?
The company acquires small VMS players, with an average price of $2-4 million. Median deal size of $3M. There are estimated to be 40,000+ vertical market software which are potential targets for Constellation.
2. Tiny Capital (CAN ????)
Tiny Capital's founder, Andrew Wilkinson, defines the firm as a Berkshire Hathaway of the internet.
Backstory: Tiny started as a design agency in the 2010s that worked with major Silicon Valley companies as its clients. The profits from the agency were used to start, acquire, and fund other businesses.
Tiny has recently done an IPO at the TSX Venture Exchange (TSXV) at a ~$911M valuation.
3. XO Capital (USA ????)
With no external funding so far, XO Capital has led the acquisition and operates businesses that do not always have synergies among them, but that are simple enough to operate and grow without many tech requirements.
Founder Andrew Pierno is pretty straightforward and transparent with XO's acquisitions. This is what they look for when acquiring a new business:
4. Bolt Software (BRA ????)
They position themselves as an alternative to niched companies that are not going to reach VC scale.
Vinicius Vazquez, Bolt founder and CEO is a VMS advocate. Bolt is buying businesses with:?
One may say this is not a venture-scalable business, but they were invested by renowned names in SaaS in Latam: Canary & SaaSholic.
? I'll buy and grow MicroSaaS
I'm No Economist principles: and why is it different?
?? What's missing?
Ever felt like this is the thing you'll work on no matter what? That's me with this project.
But I can't do it alone. So I'm looking for help on all fronts you can possibly think of: from back-office to tech operators, to financial partners.
If you're looking to go on a fun journey to build the next big thing of your life and think you can contribute, let me know!
We can discuss how to become the largest MicroSaaS holding company in the world!
You can find me at [email protected] or just click here to hit me at my WhatsApp number: +5511974449883
?? Get in touch to learn more about it
If you like this idea you can reply to this e-mail or hit me at [email protected] or click here to send me a WhatsApp message.
Talk soon,
L.