How To Microacquire a D2C Brand

You've got an idea, you've got a product, you've got some capital, and now, you want to build a brand. For many founders, the next step is to retain a creative agency and let them work their magic.

It makes total sense. Agencies like Gin Lane and Red Antler have created some of the world's sexiest brands. Think Allbirds, Harry's, Hims, Sweetgreen.

You could even work with a freelancer or a small agency if your budget calls for it. Over the course of weeks/months, the agency will do what they do best and probably, create something gorgeous. And it will probably do well.

In my opinion, there's a better way.

Instead of spending your budget on an agency, buy a brand off the shelf.

Yep, just buy a startup. Let me explain -

In 2021, I launched a pet care brand called Everyday. After a year, my business was growing, but nowhere near profitable enough to take a salary, and my bills needed paying. I came across MicroAcquire, a marketplace that helps startups find buyers. I took a chance, listed my startup for free (it took 15 mins), and within days, I had 30+ buyer requests. Soon, I sold my business at a profit, whilst retaining meaningful equity and revenue share.

Here's why the acquisition made sense for the buyer - 

The buyer was an established operator, although not active in the pet supplement space. They wanted to get into the space, but instead of going the agency route, they saw my business as an opportunity to 'plug and play' into the industry with a brand that had proven traction.

Instead of spending mid-five figures (at least) on a creative agency to design the packaging, logo, website, collateral, etc etc, they saw potential in the foundation I had built. Re-directing their budget to acquire my business gave them an opportunity to hit the ground running, reduce their timeframe to revenue, and de-risk with a revenue-generating brand.

Here's why the acquisition made sense for me -

For most founders, personal ROI looks like one of two things. Either, they achieve enough revenue/profit to pay themselves a salary, or they reach significant scale and sell their business for millions.

Let's do the maths. If a founder needs £25k to pay their bills and put food on the table, whilst also growing their business, they'll probably need six-figure revenue to get there. Not impossible, by any means, but without funding, the time-horizon to ROI can be very, very long. I was in this boat, and an exit gave me the opportunity to see meaningful ROI in a drastically reduced timeframe.

MicroAcquire has the power to disrupt the creative agency model, and rethink how larger operators can go to market faster & with less risk. 

Bootstrapped creative entrepreneurs can focus on getting a brand from 0 to 1, and see short-term ROI for doing so.

• This is the scrappy part of brand-building. It's about doing whatever it takes to get business from nothing to a product in the hands of customers.
• Instead of committing to growing from nothing to long-term profitability, creative entrepreneurs can focus on a 12-18 month time horizon and get the brand to four/five-figure annual revenue.
• With these revenue targets, the business becomes an attractive, affordable acquisition target for medium/large operators through Microacquire, helping bootstrapped entrepreneurs lock-in ROI in a significantly shorter timeframe than traditional exit/profitability paths.

Larger operators can focus on growth - getting a brand from 1 to 10 - without the risky/expensive process of launching from nothing.

• Building on foundations that are proven to convert, larger operators can take their firepower to scale the business.
• This part involves capital. It's expensive and requires real manpower. This is not good for the bootstrapped entrepreneur, but precisely where larger operators thrive.
• By acquiring a proven, revenue-generating business, larger operators can avoid the expensive/time-intensive/risky process of working with a creative agency & hit the ground running.
• Bonus - by retaining the founder with equity or revenue-share, the operator has access to consulting/advisory services to guide the creative processes within the business, without the associated fees that come with a creative agency.

Bringing it all together.

Selling my business through Microacquire has opened my eyes to a new type of entrepreneurship. Instead of having to push through 3-5 years of growth, with potential requirements to raise capital, I can feasibly build brands from 0 to 1 (which I love doing) and see meaningful ROI by selling them as 'plug and play' businesses for operators who are ready to scale. In addition to the cash ROI, I can build a portfolio of equity ownership across consumer brands I've built, experiencing the upside of scale without having to operate them. I can stay in my area of expertise, without sacrificing all long-term upside.

Thinking more broadly, perhaps it becomes feasible for agencies to shift their model from building brands & handing them off to their clients, to building brands in-house, growing them to four/five-figure revenue targets, and selling them at 4-5x revenue valuations. I’m sure this is already happening, and it’s not too dissimilar from the venture studio model. However, Microacquire has massively democratised this process, making it realistic for founders to see significant liquidity events from side-hustles and small, bootstrapped businesses.

If you run a small brand, why not list on Microacquire and see what you're offered? You might be surprised.

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-Flo