Akis Laopodis

“Almost everyone will end up selling for non-financial reasons like getting burned out or bored, badly needing the money or a million other reasons other than: I did the math”

Tyler Tringas

TL;DR

Storemapper was founded in 2012 by Tyler Tringas and sold after 5 years for an undisclosed amount. Tyler wasn’t actively looking to sell it, but was open to the idea. Owning a profitable steady business offered a great lifestyle for him and his girlfriend, but he acknowledged that an unforeseen event could destroy that comfortable situation. Tyler wanted to diversify and reduce the risk of depending 100% from this company, and apart from the financial risk, he also wanted to work on other projects. This summary is based on Tyler’s own 5,000 word post.

1Transparent performance metrics: Many people selling a business will hide their numbers and request NDAs from potential buyers. Tyler was publicly sharing those and that simplified the process substantially.

2Publicly sharing the intent to sell: Tyler shared his interest in selling on a Meetup.com group he was a part of and that generated 50+ conversations that educated him on the process of selling his business.

3Avoiding to use the earnings multiple valuation: Most buyers use a number called Seller Discretionary Earnings to include founder salaries and personal expenses, and decide on a multiple of this. Tyler felt that absolute dollar amounts were easier.

4Using an escrow for the transfer of the assets: Tyler and SureSwift used an escrow company that received and held the money until the transfer of assets was complete, at which point they wired him the money.

5Using a broker isn’t a good fit for opportunistic sellers: Tyler wasn’t a motivated seller that wanted the sale to be completed within a given time frame. He was waiting for the right conditions so he felt the broker’s incentives were not fully aligned.

6The first month post-sale you are very involved. After 3-6 months you walk away: Tyler was involved in the transition for making sure the new owners understood all the details, where able to find all the details and so on.

Timeline

2012

Tyler was freelancing for Shopify merchants and working on another startup. He received 4-5 requests for a custom map widget for stores and decided to launch Storemapper as a side project during a long flight. He didn’t make a logo or get a storemapper.co email address. He just emailed his customers “sign up here, it costs $5/mo”. From day 1 he had 3 paying customers and was getting 5-10 new paying customers/mo.

2013

March 2013: Tyler went to MicroConf, a conference for bootstrapped software businesses, where he met Kevin from SureSwift Capital. He ended up selling Storemapper to Kevin a few years later. 

August 2013: Until that point he hand’t spent any money on growth activities. Storemapper was at around 50 customers and generating a few hundred dollars/mo. His other startup was getting some traction and he wanted to focus on it so he shared on the NYC Ruby group on Meetup.com that Storemapper is for sale. The actual post here.

He got about 50 responses from people interested to buy Storemapper. There were several people reaching out. Selling it for 6x monthly profits could have generated 20 offers in a single day. Some were a scam, others were people offering some sort of partnership, but he also got some high value opportunities. Overall he felt that buyers would go ahead with an acquisition only if they felt they’re getting a crazy deal. Tyler had spoken to business valuation professionals and they gave him a somewhat fair value but the terms were bad: No cash upfront, sliding payouts, claw-backs, and the highest cash offer he had gotten was 2X annualized revenue of $20K so $40K. He didn’t sell at that point.

Autumn/Winter: Tyler gradually increased his pricing from $5/mo to $9/mo and then to $20/mo. By December 2013, Storemapper was doing around $2K in MRR. He was getting free trials signups, typically around 30 every month. He used Screenflow and Youtube to make several basic screencasts that he embedded in the UI for helping people discover the app’s features.

2014

Storemapper reached $50,000 annual revenue and $13 revenue per user. He had extremely low churn (user churn: 1.4%, revenue churn: 1.6%). Almost all new customers came via organic search, the Shopify app store, and the “Powered by Storemapper” link at the bottom of the app. He created the annual plan as a way to get a bit more cash as he was running out of money, and in two days from the day he announced the plan he got $2K.

February of 2014 he reaches $54,000 annualized revenue realizes that he needs to make Storemapper his priority, after a failed attempt at a joint “future revenue share” type of deal with two other guys that would help him scale product and marketing. November 2014 he crosses $80,000 annualized revenue. He achieved that by building more features, better onboarding, offering a premium plan, and other growth efforts.

2015

February 2015 he crosses $100,000 in annualized revenue. About $90-$95,000 of that is net income as it’s a very high margin business. He decides to automate and hire two people for removing himself from the day to day.

2016

May 2016 he crosses $200,000 in annualized revenue.

2017

October 2017 he announces the sale of Storemapper to SureSwift Capital.