August 3, 2022

Five lessons from an eight-figure exit

Building a business that sells in the tens of millions of dollars is very realistic — with the right team, hard work, and a bit of good market timing

Timothy Armoo

7 min read

Fanbytes founders

The image of a successful founder is often one ringing the bell at a public market listing. So it’s easy to forget that the majority of successful exits are private acquisitions. Having sold my influencer business Fanbytes to global digital marketing agency Brainlabs for an eight-figure sum back in May, I’m one of many that fit into this category.

Founders should be realistic with themselves; the odds of building a billion-dollar business are low. Even lower are the odds that you’ll build a billion-dollar business and take it public. However, building a business that sells in the tens of millions of dollars is very realistic — with the right team, hard work and some good market timing. There’s more than one game when it comes to entrepreneurship, and more than one measure of success for you and your team. 

Here’s what we learnt about best preparing yourself for a successful exit. 

Tell a story of organic growth and untapped potential

The number one reason a business is acquired is that the buyer believes the company can be worth significantly more. This is the story they want to hear, and as a business which produced actual revenue, this wasn’t a difficult story for me to tell. If you’re a seed or Series A-stage business, chances are you also have a good story about your upside potential. 


We mapped out our growth story clearly. We presented the reason why we might be attractive to that acquirer: 40% of our revenue came from the US but we had no physical US presence. Brainlabs does have US presence. And we presented the macro reasons why we’d continue to be a compelling business: as influencer marketing matured, it was clearly becoming a part of the wider marketing mix. We positioned ourselves as the missing piece for large agencies, which we truly believed.

If you’re currently building, you’ll find this process easy. You probably have a wishlist of 10 or more goals that you don’t have enough time or funding to attack. Look at that list from your potential acquirer’s perspective, and pull out the most exciting two or three stories.

Remember that an acquisition is all about making sure both sides get value from the transaction, so it’s important you’re able to think about that value from earlier on.

Don’t forget your data room

Assume your business could be acquired at any point in time and get your data room in order. A data room is where you store all the information concerning your company, from legal to finance, contracts and people-related info... everything. It’s what the lawyers, M&A bankers and corporate development look at during due diligence. 

You don’t want to be scrambling to get your house in order when the letter of intent — a preliminary commitment from a buyer — comes through. When we were in the process of selling Fanbytes, a lot of the stress came from our lack of a comprehensive data room. We were helped by having great lawyers who handled it, but we would have saved time and unnecessary stress had we maintained a data room earlier.

If you know your processes around data are subpar or don’t exist at all, you're building up a debt that is painful to repay.

If you know your processes around data are subpar or don’t exist at all, you're building up a debt that is painful to repay

This kind of rigour is the first thing to be dropped when product launches, crises or holidays eat up time. Do yourself a favour and hire an auditor on an annual basis as soon as possible.

Avoid channel dependence as soon as possible

Buyers are looking for potential risks to your business, and you need to cover your bases. This doesn’t come from a position of malice, it’s just business sense. Channel dependence is a prime example of something that could be discredited.

Most tech startups focus primarily on one channel: paid media and performance marketing. When you’re starting out with an idea, some messy code and not much else, this is still the most effective strategy!

However, it quickly becomes a bad look. Ultimately, if you haven’t shown you can acquire customers in at least three channels, your value risks being diminished. And if your competitors have shown you up by succeeding with a multi-channel customer acquisition strategy? Very bad look.


At Fanbytes we used content marketing, sales, performance media and PR, just to name a few. We didn’t need each channel to be generating an equal number of customers but we needed them to be humming and in sync with each other.

Aim to diversify your acquisition channels and not only will your dependency reduce, but the optics become flattering to potential acquirers.

Swim in the same waters as your acquirers

If you wanted to ask someone out, you’d have a much better chance of success if you got to know them well beforehand — rather than asking for their number out of the blue!

Similarly, as your business progresses, you should be aiming to build alliances with potential acquirers — even when you’re not ready to sell. 

You should be aiming to build alliances with potential acquirers  — even when you’re not ready to sell

This serves a dual purpose. Firstly, you won’t feel adrift when you want to look at an acquisition. Secondly, you’ll learn how these people operate. You’ll see how they receive and assess opportunities, and you’ll discover the way your industry does business.

We used M&A bankers in our acquisition, and it helped that we were familiar with a number of the companies who were interested. 

You’re always going to be selling in your business — whether it’s to employees, customers or investors. The sale of your business is the biggest you’ll ever make. Take as much care with potential acquirers, and know that you need to be friendly with the right people in order to get the best outcome for yourself and your investors. 

Sell at the right time

Timing the sale is as critical as preparing yourself for it. 

There are two mistakes founders generally make when exiting. The first is that they sell when the business is in trouble. This is the worst time for obvious reasons. The other mistake is deluding themselves that their past growth will continue, and they’ll be able to keep building without additional support and infrastructure.  

Fanbytes had been growing incredibly fast when we sold —150% revenue growth on average every year — but I was realistic that we couldn’t grow like that forever on our own. 

So our focus was on ensuring that both the market and the product had reached a healthy level and we were ready to receive strategic support to get to the next level of growth. 

Celebrate. Celebrate. Celebrate

As entrepreneurs, we tend to believe in “hustle culture” — you sell and you go on to the next thing.

If you’ve built something significant, it’s likely that your team is going to be working with the acquirer in some way. It's therefore very important that you celebrate as a group. Over-index on this. When we sold we had a number of parties because it truly was a great stepping stone for the team to build on the next phase of their careers.

We tend to think a lot about ourselves during the acquisition process and what we’d get from it,  but it’s very important to note that this is also a major milestone for employees, especially those who have been with you for a while.

You’ll probably be getting outsized returns compared to them, but money isn’t the only motivator. Prestige, career development and impact are all great motivators for the team.

Be sure to make sure that you celebrate them. They are the real reason for the business’s success.

A final note

I launched Fanbytes when I was 21 at university. At that time, I wasn’t thinking about company culture or our people’s professional growth. I was motivated by $$$, and honestly, I didn’t think this would change.

Fast forward five years, and I was rejecting potential acquirers because I felt like their office vibe was off!

If you're in the fortunate position of having your business acquired, realise that you're in a very unique position and the people matter. 

It's important to take a long-term view of what this means for your career, your family and yourself. Reading startup press can make it seem like this is a very normal thing but it isn't and it's something I believe you should mentally and tactically get prepared for.

It's the single biggest decision you’ll make in your business career.