Guillaume Moubeche is young. When we hopped on a Zoom video call to discuss the recent, successful exit of one of his SaaS projects, I was surprised at the youthful smile that filled my computer screen. At twenty-five myself, he couldn’t have been much older than me. In most industries, one’s youth is equivalent to how green their experience is–but this isn’t exactly the case in the SaaS industry. It isn’t uncommon to come across a founder or CEO of a successful venture that hasn’t yet broken thirty. Moubeche, at 29, is co-founder and CEO of two successful SaaS companies: lemlist and lempod. Or rather, he was.
Back in 2018, Moubeche and a few friends started lempod, a LinkedIn lead generation platform, alongside their primary project lemlist, an email outreach platform. They bootstrapped lempire (the collective of lempod and lemlist) to an impressive $2.2 million in revenue but soon found that it was difficult to scale two rapidly growing and profitable businesses simultaneously. Recently, Moubeche and his team decided to sell lempod in a strategic attempt to focus on “their first baby,” lemlist. This was Moubeche’s first foray into the world of organizing and preparing a business for sale.
Though his presence is nascent in the SaaS industry, his wisdom isn’t. He’s garnered an impressive amount of knowledge and experience through founding, running, and, eventually, selling lempod. Moubeche sat down, or rather, logged on, to talk me through his experience as a first-time seller, the challenges and concerns he had, and some advice he has for other business-owners and first-time sellers.
First of all, let’s get a little context. How did you get into the SaaS industry?
Well, my background has nothing to do with SaaS! I was a chemical engineer. I did some work for Procter & Gamble and Hermès, and after that, I pivoted into studying business. A friend of mine co-founded a lead generation agency–I had no idea what that was, but I wanted to get involved. He taught me a few things, but the rest of my experience there was gained through our customers. I found that I had to think and act like them to fully understand their needs and how we could adhere to them.
During this process, I found that all of the tools out there were not performing the way that I wanted, and they weren’t adapted to the current need of the market. So that’s when I started my first SaaS business: lemlist. I went from a lead generation agency owner, to starting a SaaS business in sales automation. When we started lemlist, I had to do a lot of content, videos, and personal branding, and the need for good marketing automation tools became apparent then too. And, well, along came lempod!
Can you tell me more about the founding and development of lempod? How did you identify the gap in the market that you wanted to fill?
With our first project, lemlist, we recognized that whenever we posted on LinkedIn, we needed more engagement with the content. Every time I created a post, I would go into Slack, copy-paste the URL, and beg my team to engage. Other marketers had this problem too–it required so much repetition and so much time was being wasted on trying to find ‘pods’ to engage with their content. My two co-founders really hate repetitive tasks, so they figured that they could build something to automate this process.
So in December 2018, we decided to launch lempod. In the first week, we had 100 users, then 1,000 after one month. After three months of beta, we decided to start billing for the product. The growth was exponential. Very quickly, we became the leader in this area; we were the biggest marketplace of engagement pods on LinkedIn. Eventually, lempod went from being a side-project to a real business. We reached the 20k and 40k MRR points, and, as a first-time founder myself, I realized that I needed my focus to be in one place at a time. Managing several projects was difficult. It was looking like it was time to start thinking about an exit strategy.
So what finally prompted you to make the jump and sell lempod?
As I said, we found it really difficult to scale several businesses at the same time, and the tech resources we needed were becoming scarce. And it must sound strange, why sell something that is growing and operating successfully? It’s a good passive income, right? But it was still a mental strain for us, and we determined it would be best to focus on one project and do that project efficiently.
Shortly after coming to this understanding, I met Thomas [Smale] in Slovenia at a conference. He had pitched his business, FE International, and I was not really familiar with acquisitions or exits at the time. I was not aware of the fact that website brokerage firms existed, but it seemed like what lempod needed. I was very interested, so we kept in contact.
I wanted to do my research, and see what other options were out there though. I spoke with three other brokers, but overall, it was the pricing model that allowed me to make the decision to sell through FE. I think it is really important for first-time sellers to have trust in their brokers and the quality of service. It’s also important to not feel rushed. We wanted to wait until we felt that the valuation of lempod matched up with the growth that we felt it could achieve, and I appreciated that we were not rushed through the process at all.
What were some of the challenges or concerns that you faced when deciding to sell lempod?
The initial concerns were with the valuation of the product. Sometimes there are aspects or assets of the business, for example the brand or the communities, that are very difficult to give a value to. With lempod, there were a lot of communities and members that added value to the business, but of course, it’s very hard to put a number on all of them. A lot of times, people will tell you that the value of your business is how much people are willing to pay for it. It’s much harder than that.
I did a lot of research on valuation, and because of my engineering background and love of my numbers, I did a lot of challenging with the brokers. FE was extremely transparent with their valuation process, and I think for me, it helped to see all of the numbers and how they worked together to get the valuation they did. It’s extremely important to have a valuation that accurately reflects and represents all sides of your business.
Another concern that I had was with who was going to buy my business. I didn’t want to just sell it to a private equity firm. I was afraid that the brokers were going to tell me that the only offers we had were from PE firms, but FE did a great job of sourcing unique buyers. We wanted people that were previous entrepreneurs, and we knew it was important that the person that was going to buy our ‘baby’ was going to grow the business too. Essentially, we wanted someone that could do that better than us! FE was able to match us with buyers that had the specific background we were looking for.
And the only other concern I had was with the amount of work it would take to transition the business. I was a bit afraid that it would require a large amount of time for the proper training and passing over of the accounts of the business. But that’s another reason why a good broker is helpful–there’s someone there to give advice and guidelines on the process as a whole.
What was the biggest surprise for you in the process?
I was really surprised by how quickly we went from meeting the buyers and getting the first offer. I really thought that we would need to get on at least three calls in order to get our first offer. In the end, it only took one call with the appropriate buyer! Here again, the help of FE in sourcing the right buyers was extremely useful!
From start to finish, how long did the process of selling the business take?
The whole process took us about seven months but that is mainly due to the COVID-19 crisis. The pandemic slowed down a lot of investors and buyers for a couple of months. One week after we went live, the global lockdown happened, and, naturally, people were holding their money. Initially, we thought the business was going to sell super quickly, so we had to be patient! We knew that the business was strong, we just had to wait for the right time and the right buyers–and by June, we had offers rolling in.
If you could offer advice for anyone looking to sell for the first time, what would it be?
The best advice that I could give is to be patient. Don’t try to rush the process. Take your time in finding the right broker and buyer. It’s almost like a marriage–you have to know who you are going to be in a partnership with. And don’t hide anything–it just slows the due diligence process. Be transparent. Lastly, for those who may not be looking to sell a business, but rather to start one, take the time to focus on profitable growth–the success of your company is not equivalent to the amount of money raised.
So, what’s next for you and lemlist?
For us, the full focus is on lemlist. Right now, our team is almost twenty people, and we want to keep growing. We also want to grow to $10 million ARR in the coming years. And we want to keep a close relationship with the buyers of lempod–we want to help them out in any way possible. Those are the main focuses for us for the future.