Microacquire Review: Buying & Selling Online Businesses

Transcription:

Have you ever thought about buying a profitable startup company instead of wasting years of time trying to build one yourself?
Well, there’s a new marketplace on the scene and it’s called micro acquire.
In this video I’m going to give you a brief review about micro acquire what my initial thoughts are what my concerns are and if this video does get some traction.


I’ll go ahead and do a full review where I go through the entire process of buying and selling a startup, so let’s go ahead and dig into my micro acquire review and essentially my first impressions by taking a look at what their marketplace is.
I’ve signed up, I’ve created an account and I’ve tested out and I’ve taken a look at some of the businesses on there to see what is going on now for those of you who haven’t heard of microacquire it essentially is a marketplace for startups to find buyers, so once a startup company has made a profit they’re looking to sell their business, they log into microacquire and they’re able to find buyers anonymously and potentially sell to them and that’s one of the things that I think is a little bit first glance.


Now at some point it’s you’re gonna need to know who you’re selling to, but I guess they utilize their platform to make sure it’s anonymous and there’s always this weird point when you’re selling your business you only want to reveal more information about your business to trusted and vetted buyers and micro require has a few ways of getting over this.


One of these ways is making a premium listing so essentially they only allow premium buyers to see their premium listings which is a 300 a year sort of subscription so if you don’t have this premium thing you’re only going to get access to certain listings and I believe this is their attempt to prevent everyone from seeing those businesses or to make them a little bit more exclusive for serious buyers but my first kind of thoughts on this whole micro choir is it doesn’t seem any different than flippa or something like biz by sell, where essentially somebody’s going in there they’re able to connect their sales data.
They do have some integrations with a stripe that I see but one of the big issues is with all these marketplaces there is no real vetting process sure they’re going to do some verification to make sure your emails confirmed that maybe your identity matches up but again actually going through and vetting the profit is one thing but checking and verifying the expenses is another thing, so let’s run through a few examples that a lot of people on flippa use to scan people and that can be potentially used on this marketplace.

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It’s just not their priority to spend a lot of time vetting these businesses and they’re putting that weight onto the potential buyers so if you are looking at a business you need to make sure you’re asking the right questions and you’re digging deep into these businesses, where other curated marketplaces are spending four to six weeks investigating the seller the buyer checking all the financial data verifying expenses and so on so none of that is really happening on microacquire, and that’s kind of why it’s my concern for potential buyers to go there.


I do think it’s going to attract certain buyers and sellers and overall it’ll be great for the community microacquire has already raised around 5 million dollars in seed funding so it’s going to be interesting to see how they continue developing and I’m sure this is kind of their first beta maybe they’ll be adding on some of these features that, I was discussing vetting the businesses and also vetting the buyers because when you’re selling a startup company there are certain things you just don’t want to share with a buyer that doesn’t have a million dollars to buy your business.


If they only have 100 grand in the bank account or access to 100 grand in the capital there’s no way I want to reveal a lot of that information or details to that buyer unless they have that capital so that’s kind of one of the things that I see as an issue with microacquire at first glance.


Let’s talk about the good things it does seem like they have a really clean interface it’s simple minimalistic it’s easy to find businesses they have a lot of sorting options as well which makes it easy.


If you’re looking for something in particular, you can put in the price the type of business there I would say they are kind of leaning towards the software as a service business but they have a lot of other types of businesses on their e-commerce crypto Shopify.


So they do have a good combination of businesses there and I think it’s a great opportunity for people to kind of see check it out for themselves and see if it’s a good fit, but again make sure you’re spending that extra time to really dig into the financial data to make sure that these businesses are legit as it is.
From my understanding, there’s not a huge verification process that goes into checking the financial data. I do think there is some verification because it is linking to certain payment processors to make sure that the income is actually accurate but as that example of what I’ve seen on flippa and other sites where you can kind of say whatever you want the problem is that even if the profit is verified like through a stripe connection or a stripe api there’s no way for them to verify my expense.

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Let’s take a look at one common example or one common scam that I’ve seen on flippa and some of these similar type platforms essentially is you can verify the profit and the revenue that’s coming in but it’s really hard for you to verify the expenses so let’s say you have two ad accounts and you’ve earned twenty thousand dollars in revenue but you spent you only spent ten thousand dollars on one ad account, which is what you’re displaying so you’re displaying a ten thousand dollar profit but what people don’t know if you have a second ad account where you were running ads and that ad account you spent another fifteen thousand dollars, so you actually lost five thousand dollars in the overall monthly.
But most people are just inflating their profit and their expenses so they’ll have certain expenses that they just won’t include maybe it’s an employee that’s doing stuff maybe it’s some type of refunds that they’re not including in there so make sure you’re double-checking all this making sure you’re going through the financial data very carefully because you could end up buying a lemon or buying a business that’s not necessarily generating as much profit every month, as they’re saying one other thing to notice that I thought was pretty interesting is micro acquire has teamed up with captchas which is an essentially a platform for lending you money.


So, if you’re looking at buying one of these premium listings you do have the opportunity to finance it so this could potentially reduce your risk I haven’t really looked into cap chase too much but it looks like they fund up to 10 million dollars get a term sheet in 24 hours and the repayment period is around two and a half years so it seems like a pretty interesting way to buy an online business with somebody else’s capital.


But again whenever you’re taking the money you really need to be extra precautious there because if the business goes down you’re still going to be liable most likely for paying out whatever amount of capital you took within a certain period of time or you’re gonna have to pay interest on that, or potentially even have some sort of assets leveraged to this and this looks interesting it does look like you’re able to get fairly quick lending which has always been one of the biggest issues with buying online businesses is the small business administration – the Sba loans.

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They just take too long to get approved. Sellers don’t really want to deal with that because they have so many other buyers that are more liquid, so this could be a good alternative if you are looking to buy a business through micro choir is checking out cap chase and seeing what you know seeing what they can offer you so in conclusion, I think micro choir is going to be great for the buy and sell community.

 
I still think they have a few quirks to iron out with being more transparent about what vetting goes into their business that’s something that I was digging through I couldn’t really find it out exactly what you need to when you go to sell your business, what details they ask for what details you provide, so it’s not really extremely transparent on what’s going on, what sort of due diligence or vetting is going into these businesses that would be extremely helpful.
I think one other interesting thing that they should do is somehow find an integration for google analytics, so once you do find out more information about this they could share the google analytics or just sharing it totally sharing that raw data or information in the platform because they don’t really have any of the traffic data, which is something that I always want to look at whenever you’re acquiring a business that’s kind of where you can see behind the shell seeing if there’s any fishy things going on if they’re getting a lot of data from India or something there’s sometimes there might be something going on but it helps you investigate a little bit further.


In addition, I think it’s a very interesting marketplace, they’ve raised a lot of money and they’re getting a lot of people utilizing their marketplace so it’ll be very curious to see where it goes from here and I’m going to be interested to learn more about potentially buying or selling on the micro acquirer.

 

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