How Andy Crebar Bought Wolf IQ: The Buyer's Side of the Deal

Transcript of How Andy Crebar Bought Wolf IQ: The Buyer's Side of the Deal.

The conversation, lightly cleaned for speaker attribution and names. Filler words and imperfect sentences are left as spoken.

1. Simon Bedard0:00

   Welcome back to the Buy Grow Sell podcast. My next guest is a lovely chap by the name of Andy Crebar. Andy's got a really interesting history. He actually started his career as a young lad in his early 20s at Macquarie Bank. And you can imagine over a 4-year period, learned a hell of a lot about banking, investments, and business itself. Through that experience, he got to actually see and advise on companies who were actually IPOing and doing the kind of deals that we love talking about on this show. But you know, Andy wanted something different and he chose a different path and ultimately uprooted with his partner, moved to San Francisco where he ultimately got involved in a couple of different startups, ultimately building them up and selling them off. So he actually got to sit on the other side of the ledger from the typical clients that he was advising back in his banking days.

2. Simon Bedard0:50

   Andy now runs a digital marketing firm called Wolf IQ, which My team at Exit Advisory Group actually had the pleasure of managing that transaction. So Andy was the buyer and we were representing the seller, and that's how we got to know each other. You know, what I love about this interview is that not only is Andy a lovely guy, he's super smart, and he's sharing some really great insights on this entire perspective of the M&A world and just his passion for small to medium businesses and what business owners should be thinking about and looking for as they grow and think about an eventual exit. Now, there's a lot of tips in here today. I hope you get as much out of it as I do. Hey folks, just a quick message before we get on with the podcast. You know, I think the most valuable stories we share on this show are not the ones where everything went right and it's a beautifully well-scripted story. It's the one where they're honest, open, things went wrong and founders faced challenges and dealt with failures.

3. Simon Bedard1:50

   They're the ones that we can all relate to. So if you'd like to know more and you want to make sure that you're not missing any important stories, please click the subscribe link below and make sure you hit like and leave a comment around any topics you'd like to hear about or other guests you'd like us to interview. There are going to be many, many more stories that we know will relate to you and your business, and we hope you get a lot of value out of them. Thanks for watching. Andy, welcome to the Buy Grow Sell podcast, mate. Nice to have you here.

4. Andy Crebar2:18

   Very happy to be here.

5. Simon Bedard2:19

   Yeah, great. You know, just for our audience here, I guess a little context that we actually met as you ultimately acquired a business that one of our clients was selling and we were representing the seller in that. So it was a really lovely way to meet you. And I know the team really appreciated working with you through that transaction. So, you know, I think sort of Sometimes you have transactions where people can be difficult to work with, and other times you go, great, this is a good fit. So, so that's, I guess, a little bit of context as to how we ended up in the same room together. But mate, I might get you to maybe give a little bit of your background and kind of that whole, you know, what led you to being in the position you are today and acquiring other businesses.

6. Andy Crebar3:01

   For sure. And that relationship going into any deal is so important because at the end of the day, you need to work with these people post-deal as well. And you can only pull and stretch the relationship so many times before it starts to end in a sour taste in the mouth. So, making sure we keep that balance. But my background, so, I was born and raised in Sydney, Australia, grew up in Lane Cove. Went to school in Sydney, went to UTS for my university, and then had an incredible start to my career in banking, which is great. I wouldn't change it for the world. But after a few years, I realized I didn't want to be on that side of the table my entire life.

7. Andy Crebar3:33

   I wanted to go out and build something. Yeah. And at the time, I was really reading a lot of Tony Robbins, and one thing he always speaks about is proximity is power. If you want to be good at something, go to where the best people in the world are doing it. And this was back in 2014, and people were building startups and technology in San Francisco. So my wife and I bought a one-way ticket, packed up all our stuff, and as we were very lucky and able to do that, we took off. I spent 10 years over there doing a few startups, had an amazing time. But at the end of it, in what, early 2024, now with 2 young girls and a dog in hand, I said, you know what, it's time to go home, back to Australia.

8. Simon Bedard4:11

   Was your— is your wife Australian as well?

9. Andy Crebar4:12

   She's Canadian.

10. Simon Bedard4:13

    Yeah.

11. Andy Crebar4:13

    Okay. Yes, we met on a pub crawl about 15 years ago.

12. Simon Bedard4:16

    As many good relationships have started.

13. Andy Crebar4:19

    Yes, yes. Story for another day. Yeah. And we came back to Australia, and I knew I wasn't done building businesses because I truly believe that building a business is the best form of self-development. Just the amount of obstacles, challenges, setbacks you go through is just so character-building. But from my time in SF, I didn't want to do another startup, because zero to one is an amazing journey, but it's also— you need to be a little bit delusional and crazy to go on it, because you underestimate just how much you need to go through to make it work.

14. Simon Bedard4:46

    Indeed.

15. Andy Crebar4:47

    So I knew I wanted to get back into business, and it was, let's buy something that's already working, something that we can make work better, bigger, faster, differently, those sorts of things. And I was also incubating a small agency at the time, just helping out a few of my friends with what I'm good at, which is technical digital marketing and getting involved in the details. And we must have looked at 150 different businesses. They say you need to kiss a lot of frogs to find your prince, and we did that. And then we ended up stumbling across this business, which your firm was representing, and had all the things we were looking for. It had the right founder fit and culture fit. It had good fundamentals, it had a good alignment of skill sets with what I wanted to do, and through that process, we were able to develop a relationship with you and the team. And what are we now, 18 months in? Yeah, and it's worked out incredibly.

16. Simon Bedard5:36

    Yeah, great, that's awesome. I love that, you know, and we'll get into more of the deal in a minute, but I, I love that you, first thing you actually picked there was connect with the founder and this feels right. It wasn't It met my financial metrics. Totally. It's kind of a funny one, you know, I often say to people, money, things always start and end with money. Money's a kind of sanity checker just to say, should I bother spending time on this? But it very quickly moves to the side because everything else becomes even more important at that point.

17. Andy Crebar6:03

    I couldn't agree more. And there's 2 cultural aspects of that which are really important. One is the gentleman that sold his business to me, obviously, he is a great man. And there was a lot of similarities in the way we saw life. You know, we both had young children, we were both at similar points in our journey, and culturally we felt very similar, although we hadn't met each other and had never a long background. His team culture that he had built and our team culture that we were sort of starting to build, I probably didn't realize how good it was at the time, but now 18 months in, I'm like, oh, it works. Because to this day, we've just got this combined culture And many of those original team members are still with us and are working hand in hand, you know, in combat with all the people that I brought into the journey. So that worked out really well.

18. Andy Crebar6:48

    I probably didn't give it as much thought as now I've seen it in reflection.

19. Simon Bedard6:53

    But, but in, in fairness too, I mean, I've got, um, I've got a friend who works at Bain and has run a lot of deals and managed M&A for them. And I remember him saying to me when they surveyed a lot of their clients who'd done transactions and they were like, well, did you capture the value that you thought you were getting? And in all the cases where the people said, no, I didn't get all the value, 75% of those people said it was because we didn't capture the synergies that we thought afterwards. It just didn't materialize, you know, and maybe that's poor integration. Maybe it wasn't, maybe there was nothing wrong with the company, it just wasn't managed properly. Who knows, right? But the fact that you Probably didn't rely on that value so much, but then you've captured it afterwards as a bonus, is just a— it's a nice win.

20. Andy Crebar7:40

    And when you go through these DD processes, you never find everything because it's impossible. And with that, you always need to take the good with the bad because you might not find some bad stuff or some stuff you wish you knew, but afterwards you find stuff that, oh, I actually didn't know how good this works or how great this team member is or how much leadership potential that person had. So always recognize you always take the good with the bad as you go through these things.

21. Simon Bedard8:02

    Yeah, yeah, indeed, indeed. Mate, I want to take a step back just to, I guess, the early part of your career. And, and you're saying earlier, you know, about 4 years or so at Macquarie Bank, and Macquarie's got a great reputation for, for, um, hiring and developing great talent. Um, how much of an influence do you think that period at Macquarie has kind of shaped who you are today, or kind of the thinking and the approaches you take?

22. Andy Crebar8:28

    Undoubtedly, and it actually started probably in my second year of university. I struggled going out of high school because I didn't have the routine, the systems, the rhythm, so I was all over the shop. Ended up failing second year accounting, took that home to my dad, and my dad was like, how are you gonna let this shape your life? I was like, yep. That was really, really strong words, and it hit me, and then I just got very into it and just turned it on of like, I'm applying myself, I want to build a good future for myself. And actually, at the same time, I applied for an accounting internship. I didn't get it, but thankfully I didn't get it because it put a chip on my shoulder to get it next time. And by the time next year came around and there's internships, I applied at a number of investment banks and luckily got the shot at Macquarie. And it wasn't that I wanted to become an investment banker.

23. Andy Crebar9:16

    I almost put this character on, which like, I am this person.

24. Simon Bedard9:19

    Yeah.

25. Andy Crebar9:19

    And I start doing those behaviors. Started working hard and bringing my attention to detail and all these sorts of things. And then soon enough, those activities turned into who I ended up becoming. And being put in— I call it the pressure cooker— those early years of professional services after, after college, because the expectations are huge and there's so much pressure. And it really is a privilege because it just forms you into these commercial skills that just stick with you for decades.

26. Unattributed (interjection)9:45

    Yeah.

27. Andy Crebar9:45

    Even something as simple as multiples or discounted cash flows. You just get exposed to all these things and these tools that stick with you and allow you to speak the language of business.

28. Simon Bedard9:54

    100%. I mean, which is like a foreign language to so many other people. But you reminded me of, you know, I've been fortunate in my life that I've had a number of mentors at different points and stages of my life that have helped me in different ways. And, you know, eternally grateful for that. But I remember one of them saying to me this idea of do, be, have. You want to have something over there, but you've got to work out who you've got to be, who can deliver the sort of stuff you've got to deliver to be able to have the stuff you want. 100%. I gave similar advice to my son recently about— he was heading off to something and he looked a bit scruffy and whatever.

29. Simon Bedard10:30

    I'm like, you need to dress for where you want to be, not where you are today or where you're coming from. You've got to project forward. Explaining that to a 17-year-old probably falls on deaf ears. a little bit on deaf ears, but, you know, maybe some of it gets in.

30. Andy Crebar10:44

    Yeah, I wish I knew that behavior at that time, but I sort of fumbled into it, and then now I've realized that boot— that be, do, have model is so true.

31. Simon Bedard10:52

    Yeah, yeah, it's interesting. I, um, you know, what you said there about forming that common language at Macquarie, and, you know, without boring on and droning on about my background, but, you know, I've had numerous roles in my life where when you've got a bunch of people in the room who are smart, people who are educated and experienced and whatever, they almost form their own language, right? And I remember leaving corporate, and corporate's very different, as you know, to the land of small business. And I think almost stuff that you take for granted in the corporate world, you just think that's normal, that's just everyday language, everybody knows that. And then you step out and go, oh wow, that's just not applied in a common way or anything. It's not even a common language. Totally. Have you found that sort of experience as well?

32. Andy Crebar11:35

    I found that in both sides, in that I found that the technical skills or the commercial skills you get in banking are huge. And even multiples, DCFs, spreadsheets, you know, cash flow statements, you inherently know these things. You step out and you realize, oh, other people don't know that stuff.

33. Simon Bedard11:51

    Yeah, you ask them for a forecast and they go, what?

34. Andy Crebar11:53

    Yeah, totally. And I've actually seen it play out both ways because when I left finance and went into startups and technology, I thought that those skills were like the only skills, but then I came up against people that had been in 5 years just in digital marketing, and they knew click-through rates and CPMs and CPAs and this whole different language. I'm like, oh, I know none of this stuff. And it felt like I was going back to the bottom rung again.

35. Simon Bedard12:18

    So, and then AI came along, yeah, we're starting again.

36. Andy Crebar12:21

    Yeah, but what it gave me is appreciation of there is a huge amount of skills you get exposed to and develop. But never underappreciate what other people also get exposed to and the skills they develop in what they're doing in their industry.

37. Simon Bedard12:32

    Yeah, I think that's a, it's a great piece of advice. Massive shift going over to San Francisco like that and, and just sort of upping and leaving the safety blanket of what you know. Um, and I know you actually started and have successfully exited a couple of businesses through that part of your journey as well. Can you tell me a bit about that journey?

38. Andy Crebar12:50

    So it wasn't starting a business when I got to SF. I actually had the opportunity to work underneath an incredible mentor. That, and that business ended up being listed on the ASX and ended up being acquired a number of years later after I left. But that was the first time I ever actually stepped out of the, the cash flow statements and Excels and PowerPoints to see how a real business is formed. Because businesses don't exist in spreadsheets, you know, they exist in the customer, the customers, the marketing, the sales, operations, putting this stuff together, creating value for the world. It was a very different beast. But that was an incredible experience. I did that for 2 years under his mentorship, and that business grew from 15 people to 50 people and, you know, tens of millions of dollars of revenue.

39. Andy Crebar13:31

    And I was inspired by it. I was like, wow, like, this is creating something from nothing. And that really gave me the, the skills and exposure to realize that there's something beautiful in creating something from scratch. So that's what inspired me to actually start my first real company. I actually had a very good friend of mine staying on our couch. And we were ideating business ideas, and over a bowl of ramen in Japantown in San Francisco, we're like, this is it. And it was an idea that we had both painfully been through together, and both an idea we were passionate about, which is really about improving the employee experience. Those first 90 days is when someone joins a company.

40. Andy Crebar14:07

    So we started— well, we took our PowerPoint dream, went and raised some money, hired some engineers, built the product. And the hardest part is getting the first 10 customers in any journey, because you can't figure out left or right, you don't know what you're doing. But those 10 customers give you the feedback, they give you the roadmap, they give you the input to the next, you know, 100 more. So then over a few years, built that company, incredible journey, get put through the wringer of just all the obstacles and setbacks you deal with in HR and product and DevOps and legal stuff, the whole 9 yards. But nothing actually prepared me for the pandemic, because in March 2020, I think everyone remembers where they were March 2020. We had about 60 people at the time, and we had a big office lease in SF, and all bets were off. Like, our pipeline, our sales pipeline just blew up, Yes. because no one's making decisions.

41. Andy Crebar15:01

    And even the customers that we thought would be renewing in our SaaS product were like, We don't know what's happening. So the business sort of stalled out, and we said, okay, well, what can we control? And we looked at our customers, said, you know what, we don't really believe that all like the world's going to blow up here. People, if they're forced to work remotely, our software is still going to help them do what it does. So we disbanded the office, went fully remote, and that year ended up being our best year ever because everyone went home, started building companies, started needing technology to onboard and provide incredible experiences with people. So we had a great year in 2020, ended up being acquired at the end of 2020 by a private equity firm. Yep. Which was, you know, a life-changing moment.

42. Simon Bedard15:41

    And it was actually a good time. Um, it, it's funny having gone through COVID myself, and I agree with you, everybody knew where they were. I was in Colorado in February and everything started turning a bit weird, and I was like, I'm— and I was heading home, and I literally, 2 weeks later, they shut everything down. So it was like Glad I got home in time. But, um, but it was, uh, an interesting period for M&A. And I often say to people, if you look at, you know, just a simple bar chart of, of M&A transactions and the value of those deals collectively, each year it'll just kind of go up a little bit on average, you know, like just, just really boring, consistent growth of the amount of deals. And given inflation, that's probably not an unreasonable thing to expect. But then 2021 hit.

43. Simon Bedard16:24

    We'd all been freaked out by the pandemic. All the sellers I was talking to were saying uncertainty, I don't want to sell, I'm not sure of anything. I'm like, actually, the best time to sell is when there's more buyers than sellers. And there are so many buyers in the market, it's not funny. And I was dealing with PE firms who were— had all sorts of dramas in various portfolio companies who were just looking to buy their way out of it. You know, let's acquire some other companies, let's bolt them on, let's, you know, water down that issue. Let's, you know, we've got to deal with it, but like, we've got to keep acquiring and you can't sit still, right? Totally. And so it was a fascinating time.

44. Simon Bedard16:58

    And then the deals in 2021 just skyrocketed, and then '22 came back right back where it was. I was like, this, this was such a weird time to be doing deals.

45. Andy Crebar17:06

    Yes. And a very big influence on that, in part, especially in the US, was interest rates, because they go to zero, made everything look a lot better. And even for us, a part that I noticed over the last 6 years is, back when we did that deal, software multiples were between 7 to 12 times revenue. So, everything looked a lot better. Now, we're sitting here in 2026, 5, 6 years later, those multiples have compressed. Definitely. And we, you know, were lucky enough to sell our business in 2 tranches. We took half cash and rolled half into the new vehicle.

46. Andy Crebar17:41

    And then we just finalized that 6 months ago, the second piece, and the multiples are very different. And the business has performed well, it's grown, but it's pretty hard to catch up on multiples getting cut in half. Yeah, definitely. Yeah, a lot of that's been interest rates going from, from 0 to 5.

47. Simon Bedard17:56

    And you flip it around the other way and you say to a business owner, what would it— what would be required for you to double the size of your, your business or double the value of your business? And everyone will just go, oh my God, like, that's, that's hard.

48. Unattributed (interjection)18:08

    It's brutal. Yeah, yeah,

49. Simon Bedard18:12

    yeah. So that's an interesting, um, deal to go through though. I mean, to, to kind of roll in with the next sort of tranche and keep going. I mean, were you still involved in any way, or was it just passive on the sidelines?

50. Andy Crebar18:24

    No, still involved. Had a year earn-out, you know. Us and the management team wanted to make sure that, you know, the wheels stayed on the cart and we're still growing and all that was working out. It was my first time realizing that when you do sell, you sell. So, you're no longer in control. You just need to support to make sure it's a massive success, you know, hell or high water. So, we're still involved for the next 12 months integrating things. One of the lessons I mentioned earlier of you accept the good with the bad, like one thing we saw, which I think many acquisitions see, is people reassess.

51. Andy Crebar18:54

    Am I on the right path for the next chapter in my life? Yeah. It's a good juncture for people to, have that reflection, have that thought, see where they're going to go. Do they have this, the right career path at that bigger company? And we saw some people say, hey, you know what, I'm gonna explore something else. Awesome. And it gave the, gave the room and headway for other people to rise into, you know, better positions, to give them the career path.

52. Unattributed (interjection)19:15

    Yeah.

53. Andy Crebar19:16

    But after 12 months, um, it was time. Everything was going smoothly, business was performing. And then me and my CTO, we departed, and we're ideating, you know, what's next for us? And we wanted to build another business, so we started a business involved in helping average, regular people get access to these very discreet, high-quality commercial real estate deals in the US. And the reason why I know this interest rates story so well is at that time, interest rates were zero.

54. Unattributed (interjection)19:43

    Yeah.

55. Andy Crebar19:44

    So, it looked, it looks good.

56. Simon Bedard19:46

    Yeah.

57. Andy Crebar19:46

    And we started—

58. Simon Bedard19:47

    Yields were amazing.

59. Andy Crebar19:48

    Yeah, totally. Things looked a lot, in hindsight, looked a lot better than they were. And the US Fed was like, we're not raising rates for a number of years. We went out, raised the money, sort of built the product, and by the time we got to market, interest rates were climbing.

60. Unattributed (interjection)20:01

    Yeah.

61. Andy Crebar20:01

    3, 4, 5, and everything looked different.

62. Unattributed (interjection)20:04

    Yeah.

63. Andy Crebar20:05

    So, we, you know, they say that the market determines your strategy, and your strategy determines the outcome. We pivoted on our strategy to try and reshape the business and the product into a more B2B-facing thing. It didn't work out. You know, now after 18 months, we had incredible customers, had a team, you know, we've helped thousands of investors, but just wasn't where it needed to be for the next round of funding. So we ran a sales process and ended up finding a great long-term owner and buyer for that business. And that brings us to the end of, well, start of 2024. And that was actually the catalyst that made us reassess, where do you want to be for the next 10 years? And that's ended up us coming home to Australia.

64. Simon Bedard20:41

    Yeah, that's a, that's a long, varied journey. That's cool, I love it. So many different elements. Yeah, yeah, yeah. Um, you— and I don't know the size of the companies that you were dealing with there, but it's— are you finding it different being kind of the owner-operator of what I'll just broadly call the sort of this in, in the SME land?

65. Andy Crebar21:04

    I think at the end of the day, when working with SMEs, you have the opportunity to do it, it's very similar to a bell curve, which is like 90% of the customers are gonna be amazing, great, and the top 5 will be even better than you imagine, and the bottom 5, you can get exposed to some tough parts of humanity, and that's okay.

66. Unattributed (interjection)21:24

    Character building.

67. Andy Crebar21:25

    Character building, people have bad days. And that's been a really fun journey, 'cause today we're at, with Wolf IQ, after the deal that we did together, we've acquired 2 more, and today we're about 520 or so customers. And even if 10% of the customers are upset, you've still got 50 problems to deal with. So it's just the law of large numbers. But I love it, because seeing small businesses win, like we're working with this incredible sailing operator, Kylie and Glenn, seeing them win, and their business win, they can hire new people, and they can build their community, it's like, ah, that is just magic. So I think the impact of working with SMBs is really fulfilling.

68. Simon Bedard22:02

    It's, Funny, we often refer to ourselves at our business that we're a team of business owners for business owners. Like, business owners are our peeps, right? Like, we get them, we are them, we, you know, we just relate to it all. And it's, I think for those who haven't been in business before, in fact, one of my previous guests said, you know, the first time you get into business and you see the world through that lens, it's pretty hard to unsee it.

69. Andy Crebar22:24

    Yeah.

70. Simon Bedard22:24

    You know, it's just, it's very addictive in a lot of ways. So. Yeah, that's cool. It's good fun. Um, so talk to me a little bit about your experience with Wolf IQ. I mean, obviously we, we had one perspective of the transaction.

71. 22:39 to 25:39: this part of the conversation is in the full episode only.

72. Andy Crebar25:39

    Totally, yeah. And you don't know what you don't know. So you need a deal doer, someone that can just guide you in the process.

73. Simon Bedard25:45

    It's actually funny, over the years we've had a number of referrals from PE firms who have been chatting to a business owner directly and landed in a place that's like, this isn't gonna work. And literally they've said on the email, hey, it's been great getting to know you, we appreciate your time. You're actually not ready for us at the moment. Mm-hmm. Or our model. And I'm introducing you to Simon because they can actually help you get ready. And might be in a year or 2 or whatever, but like by the time you go through a process of getting ready for an exit, then like let's have another chat. And let's be honest, it might have been because the seller was just completely naive and maybe being a little unrealistic too.

74. Simon Bedard26:23

    And they're like, you kind of need to understand, you need somebody in your corner giving you proper advice.

75. Andy Crebar26:27

    I couldn't agree more. I see that manifest in 2 ways, because we, we're still actively finding and buying new agencies. And I see it, one, in the actual process. So like, I'll send you an LOI on Friday. What's an LOI? And you're like, okay, I'm gonna send you this document. Like, it's meant to be a collaborative document, we'll mark it up together. It's meant to like put the high-level thing, because then we go to DD and we're spending time and You have to sort of coach them through it. Yeah.

76. Andy Crebar26:50

    Where if they had an advisor, they would have to have those conversations, answer all the questions.

77. Simon Bedard26:54

    Totally. And, and also had the conversations around like what's real, what's not real. Yes, we're all here to get a really good outcome, but at the end of the day, like I, I say to my own clients, if you walk away thinking, haha, I got everything I wanted and everything else, then it's usually at an imbalance in the deal. And that kind of sometimes comes back to bite you because it— maybe that deal probably was not right. So it's, you know, I always say a good deal is probably where seller, you probably got a little less than you thought you wanted, and the buyer probably paid a little more than he thought he wanted to, and somewhere in the middle there's reality, right?

78. Andy Crebar27:27

    Totally. That piece as well, actually the second one I was referencing, which is even in valuation sense, you know, we meet some prospective sellers that, you know, I want 8 times SDE for my business, and you're like, that's fantastic, like, have you looked at market multiples? And like, If not, go speak to advisor. Go—

79. Simon Bedard27:44

    But my mate at the pub told me.

80. Andy Crebar27:46

    Yeah, totally. And some businesses can trade at that, which is fantastic, but majority of small businesses don't. And often it's very helpful if the seller has an advisor or has someone trusted they can work through this to manage those expectations.

81. Simon Bedard27:59

    I always think of— there's a lady, Stephanie Breedlove, who sold her business. Um, I don't know all the exact numbers behind the deal, but I, but I estimate that she sold at somewhere around a 54 multiple. You know, maybe it was 50, let's round it down, you know, like, but for a business that was probably doing maybe a million in EBITDA, she sold for $54 million. And the problem is that, like, what an amazing story, right? Like, just wow. But people hear stuff like that and go, oh, well, I should be able to do that. Yeah, totally. Surely I can get it listed 10 times because of that. It's like, well, no, that's actually not how it typically works.

82. Simon Bedard28:35

    I keep saying to people, you made the comment before about due diligence and maybe not capturing everything, but anything that's really obvious will come out in due diligence. And so, and I said, you're going to be selling to smart people who have smart advisors. There's no point trying to be too cute around all this stuff. Let's just be open and transparent. There's value here. We don't need to give up our value, but we also don't— you've got to be realistic.

83. Andy Crebar29:00

    Yeah, totally. And when you see those 54 times multiples, often the other piece of the equation you're not seeing is what are the terms.

84. Simon Bedard29:07

    Yeah, and also that there was synergy there that was completely different. It was a 3-year relationship of them building this out, and she knew once you get my business, it will actually blow up by 100-fold. So she was like, all I want is a little piece of that. And they all went, yeah, okay. Um, so yeah, you can't, you can't price synergy in at the outset, right? Like, synergy is something that evolves when you learn more about each other and whether it gets priced in or not is another thing again. So yeah,

85. Andy Crebar29:33

    yeah,

86. Simon Bedard29:33

    fun and games. So, um, my impression and feel of the deal with Wolf IQ was that everything went reasonably smoothly. Is, as a buy side, I'm opening myself up here for feedback, was there anything that you go, oh wow, like, you know what, like that surprised me, or the, you know, process could be run better, or anything like that?

87. Andy Crebar29:54

    I think it was all fairly smooth. I'm trying to Think about the question more broadly. What is most helpful for a buyer? And I even say, this is the first deal that I did in Australia, so I put myself as like a first-time buyer, and you don't know what you don't know. Yeah. So I think one thing you guys did well, I think, was outline the process. But even something as simple as like comps, like a spread of comps of like, Andy, we've done 20 deals in the last few years in this space, here's what they normally trade at. Here's where this is a good deal. Here's where this one's different because it's growing faster, got better margins, or whatever it is.

88. Andy Crebar30:27

    Because the more FUD you can decrease, the more uncertainty, doubt of am I making a mistake here by doing this, the better.

89. Unattributed (interjection)30:34

    Yeah, no,

90. Andy Crebar30:35

    I think one more thing, coming back to our point earlier about having an advisor. You also know that advisors have reputations they need to protect, so they're not out there trying to sell people lemons for different multiples. They want to make sure that's a fair deal at a good price with good terms with a good buyer. So I think the actual reputational capital that advisor brings to the deal is huge. And when I looked at you guys representing Wolf IQ, I was like, great, they've got a strong, experienced advisor on this that's going to make sure that this ends up being a good deal for everybody.

91. Simon Bedard31:05

    Yeah, yeah, no, I think that's great feedback and I couldn't agree more. It's, um, you know, I'm always sort of scratching my head when I see people self-representing on things. I think like everyone knows the joke about a, you know, fool for a client. You know, lawyers who represent themselves in court have a fool for a client, right? There's a reason that saying came about. You know, I don't operate on myself either, you know, even though I've read a couple of articles about biology. It's, you know, I go to a doctor.

92. Andy Crebar31:31

    If I were to put that question back to you, Simon, maybe not our deal specifically, but from buyers you've seen involved in this market, in this landscape and space. What do you think, you know, what can they generally be doing better?

93. Simon Bedard31:44

    Um, look, I think a lot of it— and I'll, I'll, I don't mind referencing, I know, our engagement with you. We enjoyed working with you because it was— you came to things, you were open, you're transparent, you're an intelligent person. So it was good to have conversations. We weren't having to explain basics to you. And, you know, so for us it was like, okay, well, when the pieces fall together and we know that we're having— making meaningful progress, you get a lot more encouragement to keep going with that person and investing more in them. I think where a lot of transaction guys and advisors get frustrated is when buyers come in all hot and over-intellectualized about things, but they actually are lacking the funding, they lack the structure behind the scenes. You know, we see buyers who talk a good game, and then when we get to doing a deal, oh, the money's evaporating and, you know, I've now— and look, I'm gonna be a little bit mean here. I'll pick on some of the search funders out there and you'll be familiar with search funders and that model.

94. Simon Bedard32:44

    And I've actually, 'cause I talk to a lot of people and I'm willing to actually just give my feedback even if there's no deal here. But I've had a few of them who are very smart people. But when they come in and say, look, we wanna do a deal. And I go, yeah, but if you now need to go sell this deal to 6 other people and one of them doesn't go in, then you don't get your fund. Like, that's a risky proposition. Yeah. I said, if you're up against another buyer who's organized, can articulate where they're getting their funding from, they don't have these kind of impediments, like, we're just going to go with them every day of the week. Because if I take my client down this path with you and you fall over, like, that doesn't just frustrate everybody, but it's cost my client money and it's costing me reputation.

95. Simon Bedard33:28

    So it's that being organized. It's also The other thing, Andy, and you'd get this, mate, is that buyers who come in and are insensitive about the way they speak about things, like, and let me, you know, use the more vernacular around this, is nobody likes being told they have an ugly child.

96. Andy Crebar33:47

    Yeah.

97. Simon Bedard33:48

    So, you know, coming in and then like rattling off and being a bit kind of bullheaded about some of that stuff, all it does is upsets the other person and makes them think I don't want to deal with this person anymore. Yeah, you think back to that culture fit connection thing you mentioned at the beginning.

98. Andy Crebar34:01

    And all businesses have problems, but if there's a problem in a business that might be a sensitive subject, calling it out blatantly can often be a blunt instrument. Like, talk around it, talk about some opportunities, talk about it different ways, because at the end of the day, it is someone's child, it's someone's business. So I think being respectful in your language is really important.

99. Simon Bedard34:19

    You don't lose anything by just being kind and considerate, right? Like, you don't have to— there's It doesn't mean you're being weak in a negotiation. You're trying to build a relationship with this person.

100. Andy Crebar34:28

     Another thing I found with your point about the professionalism of a buyer and a seller, I've even found as a deal starts to heat up and warm up, even just the professional signals you get of this person— are they responding quickly? Are they kind? Are they using the right language? Are they considered in their responses versus are they just shooting from the hip? Because we, you know, when we try and prospect in new businesses, as you said, there's all these different excuses and they'll disappear for a month and they come back and they all just impact the relationship of like, is there actually any trust to get this deal done or are we just wasting our time?

101. Simon Bedard35:04

     Yeah, what are we actually dealing with? It's funny because we're having the same kind of conversations or perceptions at least, because, you know, I'm often saying to our prospective clients, you know, we need to be organized. You know, and, and, you know, I usually take about 6 weeks to go through what we call our prep for sale phase, which is not changing the business, it's getting organized, getting ready, you know, build the assets, build the data rooms, pull in the things we need. You can't build a DD room on day 1, but you can certainly get the frameworks and the, you know, some core stuff done. And I say to the clients, like, if you've got to imagine for yourself, like, if somebody comes in and we start talking to them and they ask for basic things and you can't provide them What does that say about your business? Like, I'm, oh, I'm so disorganized, I can't put my hands on a simple forecast, or I can't do this, I can't do that. It doesn't really give a great impression, and, and first impressions count.

102. Andy Crebar35:52

     Totally. It signals 2 things. One, it signals you might not be serious, that like, is this actually worth doing it? But also that you might not know the answers that we're looking for. And when you go to sell a business, you've got to be all over it and be able to explain things and articulate what's going on in the business. If you don't have your pulse on it, it's like, What else am I missing?

103. Simon Bedard36:10

     Yeah, and if you don't know it, you're either like, that says something already, but also people have a tendency to make it up. And, and of course, you know, and we always sit there going, everything comes out in due diligence, so don't make it up. And if you need help with the forecast, we'll sit with you and do that. But like, yeah, everyone needs to be able to walk around the table and see this deal from the other person's perspective. Now I keep coming back to this saying, you know, deals only get done when you've got a willing buyer, willing seller who can form a lot of trust in a short period of time. That's it, like, that's the core of it. And I think transparency is going to be the underlying thing with all of that.

104. Andy Crebar36:44

     Yeah, and the signal that a well-polished DD room is huge. It's a small thing, but it just shows you're buttoned up, you've done the work, and you're presenting the business, you know, the good, the bad, and the ugly. It just goes so far in seriousness.

105. Simon Bedard36:57

     It's the person who turns up for the job interview with clean shoes and their tie in place, right, versus the scruffy, bit You know, person who came late or whatever, you know, like those little things, they, yeah, they're all, like you say, they're all signals, aren't they? So, um, mate, interested just quickly in your thoughts. You know, you're in this digital space, man, what an evolving area. Um, everybody's talking about AI, everyone's talking about where things go. I know in my own business we are trying to rapidly evolve and learn. Um, How do you see these changes reshaping, or, you know, is it going to reshape your industry?

106. Andy Crebar37:34

     I think AI is reshaping everything, and it's a very powerful enabler, and it's also a detractor. There's a lot of good and bad that comes from it. In our space, around helping small businesses win online, digitally, huge ramifications. Our, our business model, you know, small businesses, it's the 3 to to 20 people predominantly, you know, companies. Now, the ability to build your own website, that's existed for 30 years.

107. Unattributed (interjection)38:02

     Yeah.

108. Andy Crebar38:03

     And there was a book we spoke about earlier, The E-Myth, around as you build a business, you need to move from the technician to the manager to the entrepreneur. And our customers, they're generally the entrepreneurs or the managers. They don't want to be involved in the blocking and tackling and the image compression and these sorts of things. And that's why professional agencies exist, to help unblock them, allow them to focus on what they do best in the zone of genius. So we're not seeing so much disruption from that because people can always build their websites. What we are seeing is more around how do you build these websites and how do you share the margin with that? Because you can build a website a lot faster now than you could 24 months ago. So does pricing deserve to be where it was 24 months ago? Or are you able to cut costs down, deliver an even better product or a same product quality, and share that margin with the customer? That's the things we're evolving for right now. So we're looking at how do we share that value with the customers as far as pricing.

109. Andy Crebar38:59

     But everything's just getting better in the sense of

110. Simon Bedard39:01

     more productive and the ability

111. Andy Crebar39:02

     to do things faster. And yeah, even the concept of serving 500 customers 3 years ago, the amount of checking, you know, reconciling, auditing that AI can do across 500 customer websites and accounts and these things is huge. So it allows us to be a lot more efficient in what we're doing.

112. Simon Bedard39:21

     And I still think to the point about having advisors and using experts, I mean, you know, I could probably sit here and tell Claude to build me a website. Doesn't mean it's going to be a good website.

113. Andy Crebar39:30

     Totally.

114. Simon Bedard39:30

     So yeah, you know, I still think, you know, I don't— if I had a brain tumor, I wouldn't go to a GP, I'd go to a specialist, you know. So it's I think that this, the need for technical knowledge and expertise to be able to get that problem solved quickly is never gonna go away. It's just how the professional does that job in the background and delivers that service.

115. Andy Crebar39:52

     We're seeing this a lot, even saw it this morning, where building those websites is fantastic, but often we can confuse with building something fast with something effective. Many very intelligent people will build the MVP in Claude, but okay, how do I get it to like work and win customers? And it's that last mile which is actually 90% of the work, and that's where they come to companies like Wolf IQ that can really help them and show them and drive best practices and actually operate it for them, so then they can get out of being the technician and actually out there building relationships with customers or the team or doing what they do best.

116. Simon Bedard40:25

     Yeah, it's like in logistics, last mile delivery, man, they'll just go, that's

117. Andy Crebar40:29

     Hard. Yeah, totally.

118. Simon Bedard40:30

     And expensive.

119. Andy Crebar40:30

     It's only this far. Yeah, but it's—

120. Simon Bedard40:33

     yeah, exactly. Yeah, cool, mate. I really appreciate you coming in and sort of sharing some of your insights here. What next? Where are you going with things? I mean, you mentioned that you're still looking for potential acquisitions and, you know, is there a goal in mind? Are you looking to do an eventual exit one day? Is this, you know, what's the What's the journey with this?

121. Andy Crebar40:55

     This business is different for me because I actually had a discussion with a friend the other day of like, if someone came to you today and offered you X million for Wolf IQ, would you sell? I'm like, I don't think so. And the reason is often it's our trauma, our failings that shape us. And now my second startup, it wasn't the outcome we wanted. And going through that 18 months of struggling to get traction and momentum, it was, it was soul-crushing. And getting to the end of that, and thankfully we found a good home for that business, But it was really formative because now we've got a business that works with customers, we've got momentum, we're growing, and I'm like, I don't want to give that up. And it's almost like a blessing from that curse that it didn't work out as we wanted because now on this journey I'm like, this is fun, I'm gonna be doing this forever. Oh,

122. Simon Bedard41:36

     that's awesome, that's great, mate. Is there a couple of, um, tips that you'd give to business owners? I mean, you know, you've been through this sell side, buy side, back end, re-rolling, you know, I often joke and say it's a bit of a merry-go-round, right? Some people do it once and get off because, you know, it was a bit dizzying and they probably had enough. And other people who are probably a little bit crazy like you and myself get back on and want to keep going. But do you have any tips for business owners who are still on the merry-go-round? And, you know, I mean, we all exit one day, you know, growing, building value, those kind of core things.

123. Andy Crebar42:09

     Just for sellers?

124. Simon Bedard42:10

     Very well, for business owners really. I mean, I mean, You know, we've all got a journey to go before we exit, right?

125. Andy Crebar42:15

     Like, 2 things come to mind. The first one hits a little bit hard. We were looking at this deal in the US, and it's probably about 2 or 3 months ago where we looked at it, we wanted to stretch to get it done, but we just, we just couldn't pay the multiple we're looking at. And we walked away from it, and then we saw in quick succession a few other new businesses, and I was like, oh, these aren't anywhere near as good a fit as this one we saw. And then this competitor ended up buying the business we were looking at. And the lesson it taught me is like, man, we focused too much on the multiple versus is this a good long-term strategic fit? Because whether it's 4.5 times or 4.3 times or 4.7, it's like, dude, you're focusing on the wrong thing. Like, if this is a good strategic fit, then that's all you need to worry about because that's going to come out in the wash next 10 years.

126. Simon Bedard43:01

     Yeah, totally. Yeah, you're playing a long-term, long-term DCF here on that. That's nothing.

127. Andy Crebar43:05

     Yeah, so that's probably the main lesson of of just recognize the forest from the trees, because optimizing the deal at the edges generally isn't as good as just focusing on the bigger picture and making sure it's a huge success over the next decade.

128. Simon Bedard43:18

     I think that's an amazing tip. And, and I'll give the flip side to some of that for people who might be thinking about selling, is that so many sellers, like, they need to know what they're trying to get out of an experience, right? Like, money is important, but actually usually only to a point. And what I find is so many sellers get into a transaction and they've always had X in mind of what they want. And then somewhere in here with all the negotiating and all the stuff, people start losing focus on what was important. And, oh, I had this extra sale come in and now I want to move the thing and I want a better multiple and I want to change the number. And I'm like, yeah, and you maybe, maybe you'll get that. Maybe you will get that little squeeze here. But you know what? You have to give up something somewhere else.

129. Simon Bedard44:00

     And this whole time you're eroding trust and undermining your own deal because you keep moving the goalposts. You are, you know, you're losing focus of the forest for the trees. Like, it's just— yeah, it— and it kills deals. That's the bottom line. So

130. Andy Crebar44:14

     totally, that rubber band of the deal can only stretch and pull so many times before it just snaps. And gotta avoid that if you can.

131. Simon Bedard44:21

     And it never gets its shape back, right? Every guy, even if it doesn't break, right? It's done. Mate, thank you so much for making the time today. I've loved having you on the show. It's been really great. Yeah, been great. Thank you.

132. Andy Crebar44:31

     Awesome.

133. Simon Bedard44:34

     If you're a regular listener of this podcast, then you know that we're all about straight talk. So here's something straightforward for you. This show is built on decades of actually doing this kind of work, and our book Exit Like an Expert is the actual guide and framework this entire show is built on. You know, we talk about how do you value a business? What are buyers really thinking? And what does a sale process actually look like? This is not some kind of motivational book or technical journal. It's a practical guide that's designed to help business owners get real results. To get a copy of the book, go to exitadvisory.com.au, or you can click a link in the show notes. Hey folks, what a great episode. I hope you got as much out of that as I did.

134. Simon Bedard45:21

     You know, I really enjoyed chatting to Andy. He's just such an insightful guy. And I guess if I was to share one point that I really took away from this was that when we started talking about the actual deal that we did with Andy, the first thing he mentioned, the first thing that came to mind in terms of its importance was the actual fit and connection with the seller's And whether he saw that as a real cultural fit for himself. You know, he didn't say I was looking for a particular EBIT margin or a particular multiple and some of this sort of technical stuff that I think as sellers and advisors even, we can be a little bit too caught up in. No, it came more down to the relationship. And, you know, I love the way that we sort of brought that whole theory home at the end where Andy pointed out that he'd even lost a deal once because perhaps was pushing a little too hard on him on multiple or not really willing to give up a couple of points on a deal that was actually a very, very strategic opportunity for him. This idea that we can sometimes miss the forest for the trees is so important in life and in business. I hope you got those key points and took a lot more out of this.

135. Simon Bedard46:32

     If you have any questions or ideas and you want to learn more, by all means pick up our book. Exit Like an Expert, or contact Exit Advisory Group, and we'd be very happy to talk to you.

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