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- 🔥 Domain Special: 5 .coms ready for developing
🔥 Domain Special: 5 .coms ready for developing
Plus: 🎯 How to target successful acquisitions and conduct due diligence
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🎯 How to target successful acquisitions and conduct due diligence
Andrew Pierno, founder of XO Capital, has learned a lot about due diligence after acquiring 11 successful projects and, to date, 0 failed projects. When targeting acquisition prospects Andrew says..
We've bought stuff that already had a growth rate and just kept at it for years. […] The more we can buy mission-critical products, the better our odds are of thriving in a downturn. People churn out of unnecessary software when the economy goes south.
Andrew shared his approach to due diligence in a recent interview for Indie Hackers.
Here were our main takeaways..
Due diligence is broken into 3 buckets:
Financial - “what is the real cash the business receives month over month (not the stripe MRR which is very inaccurate).”
Tech - “where are the bodies buried. Can we maintain this. Can we continue building with it.”
Customers - “What are the quality of the customers. Can we speak to a few of them.”
Identifying prospects:
“We look a lot at churn, retention, CAC, LTV, ARPU and since we have seen a lot of deals we roughly know what's good, bad, and what's ugly.”
“Sometimes we're lukewarm on a product but can get it for a really good price. We can then factor in the effort it would take to make it a great product.”
For more on due diligence: https://notes.xo.capital/diligence/
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