In this episode, Michael speaks with Sam Bass, the Founder of Chief Operators. Sam is a Serial Entrepreneur who found it difficult to find website operators to manage his portfolio of sites. This led to the creation of Chief Operators: A platform where website operators and website investors can get connected and decide if they want to do a deal together. Enjoy this interview, as the two discuss the operations landscape for website investing.


Sam’s mission with Chief Operators is to build the community for connecting investors and operators to buy websites together. The main pain point everyone experiences when investing in websites is finding good quality operators. Operators often have great experience but don’t know where to get investment to do bigger deals. At Chief Operators, operators can build relationships and post opportunities for investors to joint venture with them. The community is invite only for Operators that have run or sold sites in the 6-8 figure range.


0:42 — What is Sam’s Background?
12:40 — What has Sam learned so far from operating sites?
27:50 — How can you find a good operator?
40:27 — What are some trends among investors?
47:36 — What’s the typical profile of an operator?


Michael 0:02
This is the domain magnet show where you’ll learn everything you need to know about buying, optimizing and selling online businesses with your host Michael Barris schlocky, hello. This podcast is brought to you by the main magnet, where we buy and grow online businesses for investors and funds. And over the past 16 years, we’ve completed hundreds of transactions. To learn more, go to domain And today’s guest is Sam Bess, the founder of chipata Hi, Sam.

Sam 0:38
Hello, thanks for having me. I’m excited to be here,

Michael 0:42
So tell me a little bit briefly about your background. How did you get into this?

Sam 0:50
Yeah, so I’ve always been entrepreneur and run different companies. And over the last, maybe 12 months, maybe a bit longer, I’ve been looking at buying different sites. And whilst I was looking at different sites for sale, I started as a small ecommerce brand. Because I was trying to decide between buying in the different verticals don’t want to go into SAS ecommerce content. And so I learned a bit about Shopify, starting the e commerce site. But then I kind of ran out of time, I had multiple companies at the time. And so I looked for someone to try and run that company for me. So I spoke to a few different people that I knew in the space about how they found operators or if they were able to find operators. And some of the other guys who do investments who have, what I wanted to do in the future was just have a portfolio of websites. And they all pretty much said that finding operators is really tough. And I thought that was really interesting that everyone needs had exactly the same response, like the first sentence is pretty much the same. Yeah, that it’s really tough to find enough Raider. So I thought that’s interesting problem and try to solve it. And that’s how I kind of ended up with Chief operators.

Michael 2:00
Yeah, finding good operators is certainly a challenge. So you want someone who has experience, work working on the same type of business, have a proven track record, and reasonable cause? All those together can be a challenge. That’s true.

Sam 2:19
Yes, exactly. Yeah. There’s lots of things there that you want to try and get right. And obviously, it makes a massive difference that the closer you can to getting those as perfect as

Michael 2:27
possible. Yeah, this is actually a similar challenge we’ve encountered a few years ago, when we started raising some capital and buying from sizable investors. And I thought, at some point, maybe we’ll find some good operators and work with some agencies. And we tried a few, but it just didn’t work. We like very quickly, we realized that the only way is just to develop our own capabilities to manage slides well. But of course, for us, it’s different. That was basically our main objective. Right. But for most investors, they don’t have that luxury of hiring and going through this whole process and like arranging everything, so for them. Yeah, certainly. It could be a good way to just find a good operator right away.

Sam 3:18
Yeah, as as I’m sure you know, it’s a lot of work to get the hiring process, right. And then the onboarding and that sort of stuff. So I imagine you have like, a couple of managers at Domaine magnet like across a few different sides. That’s cool.

Michael 3:31
Yeah, we have over 20 people now on the team. So the raw, the managers, and there’s a multiple levels of management now. And we have managers managing slides. And then we have different people who have expertise in different areas, so that they can contribute to the different businesses. And yeah, and so let’s, let’s talk a little bit more about how you got into this. How long have you been involved with online businesses in general? And what was was like your biggest success or the biggest business so far?

Sam 4:06
Yeah, I had a very career over the time running different companies. The biggest one I have at the moment is in person company. So it’s kind of a services company, in like a traditional kind of industry where you provide social support services to people. And what I did there is try to make it bring it into the 21st century and make it online so people can book online, you had all your reviews online, all your fixtures, everything was done online, which a lot of the old school sports centers and things here in Australia didn’t do. So that company still runs and I have a co they actually started today to run that one. And yeah, that’s kind of the Genesis back that was six or seven years ago, that company started and since then, I’ve just always been fascinated about the different websites that are out there and kind of going once you realize how websites rank in Google and stuff, you’ve kind of it’s like going into the matrix, you learn how all these things work and trying to figure out. I really like business models, just trying to see what’s the business model behind this. I always find that really, really fascinating seeing people who’ve done interesting things there.

Michael 5:20
Yeah, me too. I love looking at like new, different businesses. And so that company, how big is it just to give our listeners an idea in terms of employees revenue or something like that?

Sam 5:32
Yeah, so we do seven figures revenue. And there’s once this three, three staff at the moment, and then we’re hiring one or two more, so it’s kind of technical. Yeah.

Michael 5:47
And what’s the main service you provide?

Sam 5:50
So it’s social sports competitions. So we do like basketball competitions for people to play for fun after work. netball, what else to do? volleyball.

Michael 6:02
Interesting. So you organize, like you organize a competition for people to play.

Sam 6:07
Yeah, the aim is like you play as a kid. And that’s what you do. When you go to school and stuff. You might pay sports for fun with friends. University, you definitely, some people definitely do is like the social sport where you’re playing, but kind of with friends. And then when you go to work, and you work a nine to five, you end up working longer hours, you stop playing, stop seeing your friends. So it’s just a chance for people to kind of get off their phone off the internet and run around with your mates for 45 minutes.

Michael 6:32
And how does it make money? Do people just pay a participation fee?

Sam 6:37
Yeah, so it’s a great business model, because you pay upfront for the season. So a season is 12 weeks, you pay upfront, and then you that gets you access for the 12 weeks of competitions and we do everything else. Basically all the fixtures, referees venues, you just have to show up and play.

Michael 6:55
Okay, so it’s because because I remember when I was younger, I used to go with friends to play, play football, from time to time, and we will usually have like one guy from one or two guys from the throne, the group who usually the organizers, like setting things up. I’ve never really considered that that could be a business model. It’s really interesting. Yeah, Fallout 70. Link to pay for that.

Sam 7:19
Oh, yeah, definitely. Yeah. Yeah, they get to play for fun, but they get a proper referee, and it’s a proper court and everything’s properly set up. But taking online was the key there because it made it a lot easier for people to organize their team, you know, app notifications and stuff. So taking these traditional things, and putting them online is definitely a viable and interesting thing even to do today.

Michael 7:43
We have like a league of your own. Like a social playing League.

Sam 7:51
Do I have one?

Michael 7:52
Yeah. Have you set up? Or is it just random? Just like connected competitions?

Sam 7:59
Yeah, so we have a few different competitions. I don’t know how many exactly off the top of my head. But we’ve got about 5000 people maybe playing every week through our competitions that we organize.

Michael 8:09
Very cool. That’s a very interesting business model. So how did you get from that to looking into online businesses?

Sam 8:16
Yeah, so I kind of built that website, myself, just on WordPress, this was like 2014, maybe 2013. And then I started learning about everything online advertising, you know, Facebook ads, all of the different plugins, email marketing, and then just kind of went down the rabbit hole of each one of those each month, I just go down the rabbit hole and learn how people were doing it and best practices today. And doing that I’ve joined some entrepreneurship communities. And that kind of really opened my eyes to like, people having content sites online making really good money and their business model behind that. And then you kind of go down the track of how does your site make money? And she comparing notes on how they’re doing.

Michael 9:01
Now they’re nice. And so then did you do this by some some other websites or online businesses after that? Or did you try building some new ones?

Sam 9:12
Yeah, I’ve had a few different websites. But I haven’t bought any yet I was looking at buying some. And I’m still in the process of buying some, but I started a few. And that was what happened with the e commerce one, it’s kind of started that on a weekend with kind of a challenge with a few friends to start a Shopify site and learn quite a lot just doing that. And that’s kind of took me down that ecommerce path. And now I should, should have operator in to run that one at the moment.

Michael 9:44
Is it profitable already?

Sam 9:47
Yeah, it’s profitable. Yeah, it was profitable pretty much from day one. But Shopify or like e commerce is such a different beast to like the content sites because you can literally get revenue off day one. Just by doing some organic outreach, but then obviously paid ads as well just make a bigger, big impact straightaway.

Michael 10:07
Yeah. Very nice. Awesome. Also tell us a bit more about chief operators. How did you start it? And what’s the vision behind it?

Sam 10:17
Yeah, Chief operators is probably started maybe three months ago, three or four months ago. It was originally planned to be kind of a job board, it kind of became a newsletter. And then we’ve kind of ended up with the community for a few different reasons. But I really enjoy the community model, as a lot of fun to share ideas as well as connections in there. And basically, the premise of it is to connect investors wanting to buy cash flowing internet businesses, with operators that have been there, done that and have experience running websites in that niche. And, yeah, I love it. It’s super interesting to me. And I think it’s interesting to other people, because hopefully helps minimize the risk for the investor, they get a proven operator to run their acquisition.

Michael 11:05
So it’s funny because I have a, I had an interview on this podcast run that few months ago. And then I exactly describe this idea, like it’s a podcast where you have to come up with a unique business idea. And that’s what I do. I describe to them a marketplace that would connect operators and business owners and basically charge fees for participation as a commission. And and then I stumbled upon yours. And I thought this is really interesting. So I’ve, I’ve joined, I’ve had the chance to look for a little bit. It looks like it’s still relatively new. Right? I think there is maybe 100 less than 100 people. Is that right?

Sam 11:46
Yeah, I think we Yeah, just around about 100 people at the moment. Okay.

Michael 11:49
And so far, has there been any deals or any operators and investors connected? If you know?

Sam 11:59
Yeah. So yeah, we’re only a few months old. So we don’t have public case studies yet. But we have a few people that have connected online and are searching at the moment. And we have a few operators that might have found investors as well, through contacts in the network as well. So they’re, at the moment trying to set up basically contracts for the operators or agreements for the operators and agree on those. So they’re in that kind of stage. But I’m going to try and get some of those guys to do some case studies, once they’re public and have been running for three months and kind of can give us a bit of a review on how they thought the process went. I think that’d be the next step from really useful, people.

Michael 12:40
Excellent. And so what did you learn so far doing it? other other more operators? Are investors, which ones are easier to attract to the platform?

Sam 12:52
Yeah, that’s a good question, I would say, operators is definitely harder. It’s quite easy to get general operators select, if you put a post out saying I’m looking for operators for the community, you might get a lot of replies. But then percentage of those guys that have experience which, in chief operators, we kind of loosely defined as having run or sold a site in the six to eight figure range. So the percentage of those guys is quite small, usually compared to like the general population. And then obviously, trying to get in touch with those guys. It’s not like a job title, where you have a set definition. If you run a website, it’s kind of a more unique thing if you’re a founder or entrepreneur in that sense. But investors in general is a lot more easier to attract, because especially at the moment with all the other options for investing, taking a hit or being very expensive, makes website investing very attractive to people.

Michael 13:53
And so are most of your members currently investors.

Sam 13:59
Now, most of the members are operators. So I’ve focused on operators, because they’re the hardest ones to get. So I know I can get investors. So yeah, vast majority of people in their operators.

Michael 14:09
Okay, fair enough. And what’s what’s kind of the next step in the process? You got some operators and you you have some more investors? How do you plan to kind of get them connected and, and grow and monetize it?

Sam 14:24
Yeah, so it’s on a community platform. So the aim is to just be that first initial point where you connect with people. And that isn’t often like in the first week, you don’t usually join and then connect with someone, although that’s possible. It’s kind of building relationships with people over time seeing what investors are buying, what types of sites, what operators are commenting, so you can kind of get an overview on what if you would be a good match. So the next step immediately is to get more investors into the community. So we have we had about 200 on the waiting list. I think it’s down to 100 and something so I do a personal call with everyone. So trying to get more of those investors into the community who are looking to buy sites, and then long term as it’s a community, it’s not really a marketplace where like, there’s not a deal structure, you have to go through where we take a set commission, you have to follow a certain structure, it’s a bit more open than that. So that means we have a few different monetization options, from paid communities to find us or brokerage type fees, through to sponsorships, and all sorts of different interesting things with partners and things like that, which we’re going to explore in the future. But at the moment, just focusing on getting the quality of the group really good. Because we want to do one thing really well. And so we try to be very specific about the members that we we lead into the community.

Michael 15:51
Yep. Very good. And what have you seen so far, in terms of the best way to connect between operators and investors? What what specifically do investors look for?

Sam 16:08
Yeah, so from an investor’s point of view, if you’re making acquisition that the biggest thing is usually risk. Making acquisition is obviously a scary prospect, especially the first time. So anything you can do this minimizes the risk is awesome. And that’s why buying website scoop, because, or it should already have product market fit, especially as you get bigger scale or bigger price size. So in an operator, they’re just looking for the person that has the bit best fit to that company. Usually, the easiest thing for them is if you have run basically the same site in the same industry, and taking it from the same multiple, you know, 500k, revenue to 1.5, or 1 million to 5 million, because you basically would already have the playbook there in place. And you can just slot in, you can take equity in the company and and grow it and that investors willing to do that, because it saves them a lot of risk, knowing they have the right person to take it.

Michael 17:05
And in terms of structure, like equity versus fixed pay, or some some other structures, what what have you seen, that investors typically prefer?

Sam 17:18
Typically prefer, I would say, if it’s acquisition, the investors usually prefer equity, a percentage of the equity, just because it aligns incentives, obviously, lowering equity is good for the investors. But it just means that they’re on the same page long term have the same goals. We also have investors that have a portfolio of sites and then advertise on their for an operator for one of their sites. And those ones range a bit more often, that’s a bit more salary based with a smaller percentage of equity, because they already own the site. They’re just looking for someone to come in and operate it.

Michael 17:57
And what would be the typical, like equity range of percentages that you’ve seen? And does it? Does it require the operator to put some some money towards it? Or are usually not?

Sam 18:09
Yeah, so I can say what we’ve seen so far. So we only have a relatively small number of in the community. And so smallest number of deals like case study wise. But so far from the people I’ve spoken to, I’ve spoken to a lot of people each day, the kind of equity split, it’s kind of around 5% 40%. It’s just a very general range to get people in the ballpark for the operator. It mainly varies on how much money the operator puts in. So sometimes I’d say the average is kind of 5%, just to make sure, on our acquisition that they have some skin in the game. But I’ve seen operator spending up to 50 60%, as well. And then the percentage of equity kind of varies on their experience. So if they had the perfect person, obviously, you can ask for more. And if you have lots of experience, you can get higher equity. And a little bit on the deal size. So the smaller the deal is, the more equity the operator be getting, because they have experience.

Michael 19:10
Now it makes sense. that’s similar to what we’ve been doing as well. We’ve, we’ve built our first fund the structure was that we put 10%. And we took 50% of the profits. So that how we kept the equity as the equity was fixed to the initial contribution. So now equity was still 10% but we decided to change it as a profits. Profit distribution. That’s what we’ve done this second and third form as well. So that’s interesting. You got an eye. Yeah,

Sam 19:46
that model worked well for you like that’s why he kept it for the second and third fun. You thought that was a good, a good Well,

Michael 19:51
yeah, it seems to work well. I think it’s it’s kind of hard to compare, because in order to really compare you have to try both For over like a longer period of time, and then you have enough data to compare and see what works best. So that’s that’s can be a little tricky. But I have seen I know some I know other people in the industry who are doing finance, like what you described based on having a higher equity, like they would take maybe 50% equity and put like 10%. And yeah, and and that that’s especially important, then you have kind of an open fund structure that allows you to, for existing members to sell the shares, or for the font to be re evaluated and sell shares at a higher price, then it’s much better if you have more equity. But with closed funds, maybe it doesn’t make as much sense, because if there is no opportunity to sell your shares a new one, or like the value of the font doesn’t really matter, right? Because no one is going to buy it you Only you want, like the plan is and that’s what we’ve done. If most of our if all our funds so far. They are non tradable, they are closed handed, so the existing investors cannot like cannot exit, they just have to wait for us to resell everything or sell the fund. So yeah, depends on the structure. Yeah. Yeah. And so what are the current opportunities for operators in the industry? I have, I have personally seen there is quite a lot of operators coming up with because we say Empire, flippers, CFC capital, they have been able to find quite a few experienced operators. And I see there are many, many in the industry now that are kind of coming up and taking a more slightly more public profile. Right and looking for opportunities. But what are the opportunities for operators, and specifically ones who already have some experiences some case studies and was who don’t?

Sam 22:04
Yeah, yeah. If anyone that hasn’t checked it out, check out the Empire Flippers capital, it’s very similar model to the chief operators, one. And I think they’re releasing their funding next round in September. So it should be, it should be live the next round for operators. But yeah, a lot of the smart smart operators kind of building a public profile now saying, Hey, I have experienced doing these operators. I’ve been in the industry for, you know, five to 10 years and building a brand for because come to investing time, then that really helps. So I think, yeah, the smart people are getting operators, track records now, because that’s what investment playbooks are based on you know, the size of the fund you can raise is based on your track record. So the guys who’ve been doing it for five years have a head start. But if you can start now, I think a lot of money’s coming in, I’m sure you’d agree to website investing. So if you have your track record set up, now, you’re going to be in a great position. As a lot of that money comes in where the percentage of the money that actually wants to run the site, or has the knowledge even to run the site is tiny, like kind of this bigger public money outside of the sort of website world. So yeah, if you can position yourself as operator with a track record in a certain niche, that’s super exciting. As multiples go up, your return goes up. And hopefully you should be able to get much better, much better role than just a pure salary based role. Because when you exit, you have a percentage of that company. And if multiples go up and you managed to grow it just by following a basic playbook, then, then you should be able to have a good exit in two to four years time or whatever time you choose for selling.

Michael 23:45
Yeah, absolutely. That’s what I’ve seen as well. So since since we’ve been in the industry for about 1516 years now that that allows us to have a longer track record than most others can, that certainly helps with attracting investors. But you also had a few people on the podcast, who are quite successful writers like Don wells from on folio and Morehead debtor from Black Book investments. So listeners can look up those episodes. And they’re both doing quite well. And they’ve been doing it for a long time, as well as many many deals successful. And so I think it’s Yeah, like being able to, to showcase a few case studies show that you have the system or structure that that you had some successes, that just sets you apart. So it’s huge. But also another thing is you have to be more or less in the same range, like the same type of business, right? If you’ve only done a $50,000 deals and have grown them a little bit, that’s different, like you’re not gonna be able to go and use that to get a million dollar business. To run most likely, because it is quite a big difference. So you have to be more or less close to the range that you’re targeting. And so, like increasing that capacity gradually is probably the best advice top riders, would you agree?

Sam 25:17
Yeah, yeah, I think that’s really smart is you can’t start at the beginning, and you have to work your way up and get experience. So starting at the smaller side, and then just growing that size, saying, hey, I’ve already proved I can do it from this range to this range. I want to do it from this range. Just by gradually doing that. So like low six figures, doing a few of those deals, then maybe mid and then trying to do a seven figure deal. Yeah, because everything is based on track record. So yet, you have to just do it gradually over time.

Michael 25:45
Yeah, that’s what’s what we’ve been doing as well. So we’ve started some very small deals, and then have been doing many, many five figure deals. And then the last few years, mostly six figure deals, and we are gradually getting ready to do all those seven figure deals next year. So it’s, yeah, it’s certainly a process of learning. And but in reality is pretty similar. When you think about the business, you know, the five figure business of a seven figure business, if the compensates, it’s, it’s quite similar, the things you need to do is just bigger, bigger scale, lower risks.

Sam 26:27
Yeah, what I’ve seen so far is actually easier as you get bigger up, kind of in a in a certain range. Because back, the site has more customers, you’re able to test more things, you have a bit more of product market fit, you know, where you’re going, the smaller side is actually really hard. So if you can prove your scores that sets you up well, and the other thing I’d say is like, pick your lane early on, select if it’s content sites, kind of stay in the content site space, because if you run content sites, and you say I want to run an e commerce site, it has different knowledge, you’re gonna have to have, you know, logistics and stuff are very different to a content site. So, yeah, it’s very hard to say I’ve run this big site, but I want to run this different one. Yeah. So if you can stay in your lane, and that really helps multiply. And then as you say, you’re getting to seven figure deals. Then after that, you know, it kind of multiplies over time. That’s what’s really exciting for me is that you can keep going bigger and bigger as multiples rise, valuations are going to rise and which means exits are going to rise money reinvested rises. And then if you’re a part of that, as it as the whole industry rises, it’s really good place to be.

Michael 27:37
Yeah, that’s a good point. I certainly agree that first you should specialize. And then you can look into branching out once you are established in 111. Vertical, one type of business? Yeah. So from the investor points of view, what how do you choose an operator? How do you find a good operator? How do you test them? What to pay attention to?

Sam 28:03
Yeah, if you’re an investor, I think the most common thing is to kind of go straight onto the brokerages and look at different sites that you can buy, because that’s kind of the exciting thing. And it’s interesting to see what’s out there. And you can kind of spend hours doing that. But I think, yeah, the hidden side of it is who you’re going to put in place to run it, a lot of the investors aren’t going to run it themselves. Some would like some are just looking to do it own operator, but most people want someone to run it, which means you either need to if you’re not doing it yourself, you need to hire a manager, which is possible, you can hire out kind of a CEO of the site, depending on the size, give them a salary, but you’re going to have to kind of make sure they’re trained, have experienced do onboarding, give them guidance and goals and stuff like that. And that might be a good fit for someone wanting to keep the site at the same level, usually, a manager can kind of just keep things ticking over so that the wheels don’t fall off. Or you can kind of look for operator. And I kind of modeled this more on the Andrew Wilkinson style of business model where he runs tiny, which buys different businesses and he puts CEOs in and his model is very much just go out to a competitor and poach the person who’s already been there, done that and just put them in as CEO. So if you can do that, where you have a proven operator, that helps minimize the risk because you already know they’ve done it before. But you can also find someone who you think is talented, but has no industry experience. That’s option as well. If you think they’re talented enough in your personal network, and you want to give them a shot, there’s more risk, but that’s opportunity. And occasionally, if you buy a site, you might be able to keep some of the team and promote some of the team to manage the site for you. So that’s a lot rarer in especially in website sales. But sometimes on the smaller end especially in the SAS things trying to Aqua hire have kind of software engineers that they think are smart is different. Yeah. option as well. As you Operators claimed to be the proven talent model. So having someone in authority proven themselves just helped minimize the risk for those bigger big deals.

Michael 30:09
Yeah, that’s that’s a good point. And I would say also, it’s really important. Like, it depends on what type of business this is, if you have an e commerce business, when what the operator needs to do is generally pretty straightforward. So they can probably kind of figure it out and learn quickly, then it comes to growing that does require some special skills. Bought, for example, for a content site, it can be a lot more challenging to understand for someone who doesn’t know any SEO or doesn’t know much SEO. So you certainly want someone who understands a fair bit. And with with the software of sauce business, you have to have someone live with experience of managing some software development or similar expertise.

Sam 31:00
Yeah, and no one wants to give up equity because you know, that’s the purchase you made. But if you can get the growth from someone who has a lot of experience, like with you guys, you have 15 years experience. So be Give, give up some equity, you’ll be getting more growth back so that growth should cancel out the equity you lose in in raising the value of the site, hopefully?

Michael 31:19
And how do you structure the equity? Would you set up a separate like company like a separate LLC? for the for the business? Or would you just have a contract?

Sam 31:30
Yeah, there’s a few different ways you can do it. Where in the community, we’re mainly doing just the connection part. So we don’t actually do the whole brokerage flow yet, which is, yeah, putting the whole deal together with the lawyers. But what I would recommend is trying to vest that over a certain period of time, so you don’t just get access to 40% of the company straightaway. It kind of vests over time, similar to like the startup venture capital word. And then also tie that to performance goals. So hitting certain monthly revenue benchmarks or some other goals, depending on the business that might unlock more equity for the operators. Well, over time, is two of the common things I’ve seen in in contracts so far.

Michael 32:16
What is the price range with an acquisition? Like, what’s the minimum range where it really makes sense to get an operator,

Sam 32:28
I’d say the sweet spot is kind of low to mid six figures up to kind of the private equity boundary of like 5 million, I think somewhere in there, it’s actually hard in the lower range in a 200k site, to have an operator in or maybe I should say, in our community is rare, because they have experience running sites at larger levels. So it’s really hard to entice someone, even with a lot of equity to run a 200k site. And if it’s making 200k, you don’t have that much room for salary. So it’s hard, hard to get people interested. But kind of in the seven figure range, that’s when you have a lot of cash that you can play with, hopefully, for salary. And then that’s very interesting to a lot of operators. Because if they have a playbook to grow your company from 1 million to 2 million, or 1 million to even more 510 million and then sell to private equity, then they can kind of see the roadmap and know that the equity there is going to be super valuable. So I think in the kind of 200k to two, 3 million is really interesting range to grow sites, kind of below private equity and high net worth people. There’s kind of a lack of a lack of buyers in that range, in my opinion.

Michael 33:44
Yeah, that’s, that’s true. That’s what we found ourselves as well. We have some businesses that we buy manage for clients for about 100 200,000. And it’s usually is often just not profitable for us. Like it’s somewhat kind of like phase of expenses, maybe some minor profit, but certainly, it can be difficult to incise investors so we only buy those because we know they’re good deals, we know we’ll be able to grow them and make a profit. But if if we were just managing 100 or a couple $100,000 website, there would just not be enough not be enough upside or enough profit really for for an operator. So I said on them. I agree with that probably made six figures is is the best. And but there are also many people who are looking to acquire a smaller business like 50,000 or 100,000. So what can they do if they don’t know what they’re doing yet? They don’t have experience but they want someone to manage it.

Sam 34:48
Yeah, yeah, that fit the smaller range. You could definitely buy a personal site and then put operator in but in a 50k it’s really hard to find a proven operator you could find operator, there will be definitely people that You could put in, but it would just be riskier, because they’d have less experience. So your knowledge on them doing it, well is harder. And it’s quite hard to do the smaller sites. But what’s interesting there is we’ve got some people who are kind of at the lower six figure range, the 100k to 200k, which isn’t enough to buy a decent, sizable business for operators, sometimes, especially in like SAS and things where multiples are high. But they might club together with two or three opera investors. So I think that’s going to become increasingly common. Having like mini collectives, where they work together, pull their funds and all pick one operator. I think that’s going to be interesting, interesting future for that model.

Michael 35:41
Yeah, definitely. I think group bys are a good thing we are looking into setting those up as well currently, as we have a few deals are a few good deals and made six figures and don’t usually have enough like, don’t usually have investors looking to buy one, but multiple people would definitely be a good opportunity. Yeah,

Sam 36:05
and I think fishing in the kind of 500k to a million range is really interesting, because most people don’t have the cash to buy in that range. Whereas 100k, some people might have saved enough to do that. And a lot of people kind of reach a peak content might be a slightly different one. But definitely in e commerce and things in SAS, probably they might be like, in SAS, you might be an engineer, and you’ve grown in a company where product market fit, and you got it to a good revenue so that you know, it’s working at 500k. But you haven’t got the sales background to go and do commercial sales for someone or to do the marketing online or Facebook ads or whatever. So picking up something that’s kind of reached the limit of one person’s just one person solar company, and then putting your experience in front and your team’s background that makes that a really interesting acquisition. space to plan.

Michael 36:53
Yeah, absolutely. I think the best range is somewhere in between, like low mid six figures to like low mid seven figures just in terms of acquisitions. It’s above most individual investors or small groups, they can’t afford that. And it’s below the big private equity firms. That’s probably where most of the best deals are right now, in terms of content, there is a big gap, like most content, businesses will never really cross that gap of maybe 100, or $200,000 in value, because you just need a lot more age, a lot more value stability, to really get there. So the businesses, the content businesses, you see, in mid six figures are generally substantially more valuable and established. And you Well, if you look at Empire Flippers, you’ll see quite a lot of affiliate sites in that range with IB, and ultimately new just a couple of years of experience. But those are more like, exceptions, I think. So yeah. And I’ve seen some really amazing businesses around a million dollar range that have been around for like a decade or two decades. And they have staff and really high quality content and resources, like relatively low risk. Because at what point, you don’t, you don’t really expect the rankings to drop the, you don’t expect the next Google update might hurt. And you know, it’s just gonna either stay stable or keep growing or going down, but very slowly. So that was very different. And in a commerce, the ceiling, like you mentioned, a little bit higher in a commerce and sauce was sitting as your real with higher ended. But also services businesses could be quite interesting. And they’ve services businesses, also, they often get up to maybe half a million a million dollar in revenue, and sort of stagnate from there because it’s hard to grow. So um, yeah, it’s a very interesting idea to explore that that cause of what happens when businesses hit that threshold. And then if you if you know what to do, and you acquire and get them beyond that, there can be quite substantial growth, not just like 20%, but like three times five times once you solve that problem that prevents it from going up. Have you seen that happen as well?

Sam 39:23
Yeah, definitely. Yeah. And once you’ve done that, once you have that track record of taking it from that range to that range, like 500k to 1.5, or a couple of lightload, seven figures, that just gives you so many possibilities, because you have a track record, you can choose, Hey, I’ll do it again, or do it with a new site or all the different options. And I think what’s interesting is that in the search fund community, it’s a similar model, really, it’s having an operator, go out and buy a business, but often they’re kind of MBA graduates or something from Stanford, but they go and buy in the five to 30 40 million range company. And that’s usually like a traditional company like me. Manufacturing factory or something like that, although it’s becoming online a little bit more, but it still leaves that gap in the in the low seven figures range, which is where I think the people with experience now are building really interesting funds and portfolios, like, as you say, yourself Don wells by hit taeda those guys in the content space are doing interesting things right in that in that range.

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