Two veteran investors talk about what they look for, what has changed, and what’s the same. Contact DCA if you’d like to view the interview.
Last week, DCA hosted two veteran FinTech investors for a frank conversation about how they think about buying companies – and to get their stories of successes, mistakes, and surprises good and bad. David Kristal, Founder and CEO of Augeo, described his approach to finding companies that are a cultural and operational fit. Justin Kaufenberg, Managing Director at Rally Ventures, laid out his approach to front-loading major changes after an acquisition – and how that influenced the decision of what and how to acquire.
Augeo has bought businesses including Empyr, Wingnut, MotivAction, Deluxe Rewards, and most recently Structural. Augeo has also sold businesses, including most recently Figg.
Rally Ventures has a nationwide portfolio that includes companies in AI/ML, cybersecurity, fintech, HRtech and SaaS+.
Clippings from the conversation
David and Justin responded to the questions below – with a few stories from gymnastics to Web3 thrown in for good measure.
- What would you do differently in those first transaction?
- Did you ever get really lucky?
- Is there one you’re glad you didn’t buy? Why?
- The current environment is so different from a year ago. How is that changing your approach?
- What is the most common valuation approach and multiple being used today?
- What’s the most important thing to get right in purchase negotiations for a buyer?
- Is there one thing you always look for in a company?
- Is there something that tells you you’re going to get burned?
- What’s the most common misperception about what buyers are looking for?
- Where do sellers most commonly make mistakes?