In this article I’m going to review Flippa vs Acquire.com and show you how to use it. Starting with Acquire.com we’re going to review the platform and it’s pros and cons.
We’ve been using the Premium service on Acquire.com for over a year now and researched the platform.
I’m going to take you through the 3 steps to buying and selling on Acquire.com and then I’ll give my personal review and score of the platform at the end of this article.
1. Flippa vs Acquire.com Comparison: What is Acquire.com?
“Acquire.com helps startups get acquired”. That’s how they describe themselves and I think that’s pretty accurate. They are a marketplace like Flippa, and they focus on startups and SaaS businesses, not necessarily always profitable online businesses and largely there isn’t a focus on DTC, Shopify, or FBA listings, but more on SaaS and startup models focused on growth and revenue.
Acquire.com was started in 2020 so doesn’t have the data and experience that other marketplace like Flippa, Shopify Exchange Marketplace and Biz Buy Sell might have. However, where they might lack in age, they make up for in their user and seller experience that has positively contributed to the online business selling world.
They focus on getting vetted buyers in touch with sellers by using a paid membership model for buyers, so they can cut a lot of the spam buyers out of the equation for sellers, which other marketplaces don’t have. They likely don’t have the large list of buyers that Flippa and older brokerages have accrued over the years but the buyers they do have likely are strong. They also have a more modern user interface compared to other marketplaces.
2. Flippa vs Acquire.com: How Do You Buy a Business on Acquire.com?
Step 1: How do you find a business to buy?
So as a buyer, you’re going to have to choose from 3 levels of membership. The first is Basic, which is free. This is a relatively limited membership. For a first-time buyer of a small business this could work but I believe you can’t contact a seller to close a deal at this level.
The next level is Premium, at $390 USD a year this is the subscription that I have been using for roughly 12 months. This allows you to speak to sellers and get a deal done and view businesses up to $250,000 in TTM revenue.
The last level of membership is Platinum which allows you to view businesses over $250,000 in TTM revenue.
After you choose the level of visibility, you’d like you will need to fill in your personal and business details, as well as what your acquisition criteria is and other information like your LinkedIn profile. This vetting has been getting progressively better over time.
So now you need to filter and vet the listings. This is relatively easy with their filter options, and it is likely easiest for view in reverse chronological order and set your budget. This is similar across all marketplaces, also like Flippa. To see my review and tutorial on Flippa look at the link in the description below.
One of the shortcomings with Acquire.com is the valuations. Some of the businesses are asking for valuations that are ridiculous and far outside of the 2-6X range that is seen across the top ten online business brokerages and other marketplaces. This may be because of the valuation function on Acquire.com but may also be because a lot of the listings are aiming to be startups, not normal online businesses. This is where the online business buying world, which is focused on brand equity, net profit and defensibility meets the startup world which cares a lot more about growth and revenue. This leads to some businesses with little to no profit to be valued into the hundreds of thousands and millions of dollars.
I’ve personally looked at businesses on Acquire.com every week for the last year and I don’t see many profitable ecommerce, DTC, FBA, or Shopify businesses over a year old, but I do see a lot of startups and SaaS companies that look strong. I assume these startups are the businesses that are being sold on this platform and account for the $30-$40M in business sales reported on the platform every month.
Acquire.com has progressively been doing a better and better job of vetting buyers and sellers and has integrated Google Analytics, Chartmogul, Baremetrics, Recurly, PayPal, Xero, Quickbooks etc. and Stripe, much like how Flippa has done with a similar software service. This of course doesn’t give any clarity on the actual expenses of each business, but ultimately that is not on a marketplace to do, that’s on a buyer to do during due diligence.
STEP 2: How do you Negotiate with a Seller?
So, you’ve found the business you want to buy on Acquire.com, looked at the data provided on the listings and want to move forward. As mentioned, you need at least a Premium membership and then you can move forward with talks with the seller.
Now you need to communicate and negotiate with the seller. There are a lot of different types of negotiation methods that you can use. This is where a broker like Ecommerce-Brokers.com can come in handy. A broker can list your website on a marketplace like Flippa or Acquire.com and negotiate up to a 50% higher valuation and far better terms.
To keep it simple I would start with some questions about the specifics of the business. How do they drive traffic, how do their logistics work, why do they want to sell, how quickly do they want to sell. Then you can progress to asking them for access to Google analytics. Now that you’ve got a thorough understanding of the business and done your due diligence, you can now negotiate on price and terms.
Now you can talk about structure and whether you want to use seller financing or an earn out.
STEP 3: How do you close a deal?
So, you’ve found your agreed upon price and structure. You’ve had a few calls and you want to move forward.
The next steps are to sign a Letter of Intent to confirm your intention to buy the business and conduct due diligence over what is usually a 30–45-day period. After that due diligence period you sign the agreement and pay, at least the upfront portion of the deal. You can pay the seller directly or use a platform like Escrow.com that is super safe for both parties.
Flippa vs Acquire.com: How does Acquire.com make money
This is where some platforms might take a commission for just listing on your own, but because of Acquire.com business model of paid membership by buyers, there is no commission paid by the seller. However, they do have a “Managed by Acquire.com” service that charges a 5% fee, the same as Flippa, however Flippa doesn’t provide an advisory service at this commission level. The “No Fees” mentioned on the home page may be a bit misleading here but they do clarify on other pages.
3. Flippa vs Acquire.com: How Do You Sell a Business on Acquire.com?
STEP ONE: How do you list your business on Acquire.com?
Selling is made easy on Acquire.com as the platform is tailored to sellers and puts the cost on buyers. However, they market themselves as a marketplace and on their sellers, page say that it can take 13 months to sell with a broker or investment banker and that Acquire.com marketplace is better as this is skipped. At Ecommerce Brokers our average sale time is 2 and a half months from listing to close. If you scroll down their seller’s page, after they’ve explained why brokers aren’t the best option. Then they offer broker services at Step 2 where they say they can connect you with an “Advisor”, which is another word for a broker, and they will of course charge a fee.
So, this can all be a bit misleading. But at the end of the day, much like Flippa they offer to list your business on their platform, except on Acquire.com you can list at no expense, and then also offer broker or advisor services at a fee, which makes sense.
After signing up buyers will start to contact you asking questions and discussing the potential acquisition of your business.
STEP 2: How do you negotiate with a buyer?
Much like when you’re buying on Acquire.com the process of communication and negotiation is much the same. The price and valuation of the company is the most important element. Getting a third-party valuation here can help confirm the value of your business. A brokerage can help with this.
At Ecommerce Brokers we provide valuation services and can also give the reasoning and data we used to come to the said valuation. After you confirm price and structure you move forward with an LOI and sales agreement.
STEP 3: How do you close a deal on Acquire.com?
So, it’s time to sign the sales agreement and receive payment. This can be done with a broker and or an attorney. An attorney will help draft the sales agreement and make sure you are protected.
The funds will likely be put in escrow, usually on escrow.com a safe site for this and then released when the agreement is signed, and the assets are transferred.
This is where Acquire.com advisors would take their success fee of 5% if you chose to use this service.
4. Flippa vs Acquire.com: Acquire.com Alternative
If this process seems like a lot to you, don’t worry that’s what a Broker is for. A broker, like Ecommerce Brokers will charge you a few percentage points more, usually 8-10% and take care of this entire process from start to finish. At Ecommerce Brokers we bring our over 10 years of experience to each transaction which means we have a huge list of buyers, and of course have the experience to get the deal done.
“Okay George, so what is your personal review of Acquire.com?”
After using the platform for over a year I think it’s a great marketplace to buy startups and small to mid-size SaaS sites. It achieves its goal of helping startups get acquired. I give the platform a 7.5/10 and I think if it continues to improve it will be a valuable site for the online business and startup buying world
Visit Ecommerce-brokers.com if you’re looking for a broker to help you buy or sell an online business.
Author Bio: George Moulos
Forbes 30 Under 30 2020, CEO of Ecommerce-Brokers.com
I own an online M&A firm called www.Ecommerce-Brokers.com and we have 11 years experience helping buyers and sellers acquire and sell millions of dollars worth of online businesses.
Looking To Buy? Visit our Elite Acquirers buy side broker service to learn more here
Looking To Sell? Visit our List With Us page to learn more here