Would You Pay $16M for a Crypto News Site?

0:00Welcome to Acquisitions Anonymous, Internet's number one podcast about buying, selling, investing, investing, and talking about small businesses for sale. today we went through and covered a deal in the crypto space and for a rare time we actually disagreed on thumbs up and thumbs down on this one i was violently thumbs up because this is one of the best businesses i've seen in a long time so uh check out the episode hopefully you'll have as much fun listening to it as we did making it here it is

0:27hello another episode of acquisitions anonymous we don't have 100 % ears anymore

0:36Big thanks to High Level for sponsoring this video and helping us pay for our editors. High Level is the all-in-one CRM that handles your emails, texts, funnels, and more all in one place. Think of it like the Swiss Army knife for small businesses, and you can try it for free for 30 days at gohighlevel.com slash Michael Girdley. Heather, I click record while Mills is talking somebody down off a roof or getting something fixed. I don't know. He's doing real business there. I can see it on the video. Yeah. He is. Something serious is going on. It is the tough thing about contracting and maybe why I don't like it.

1:08It is every day you are in there on call 24-7 dealing with stuff. And that's exactly what he's doing right now. I've seen that face before. I've lived it. Yeah. You need to jump in when you need to jump in. Mills, are you back? Yeah, I'm back. Sorry. I was on the other line. Was somebody where there's a person you're talking to on a roof or near a roof? No, I just got off a roof and they wanted to know about it. It's actually the founder of our business who is still kind of involved. We've invested in some real estate deals that kind of are adjacent to our roofing work. And the developer was calling and giving him an update.

1:47And the developer was trying to explain co-working spaces to our founder. and so he explains it for like five minutes and dominic's like okay so instead of collecting rent from 20 hippies you just collect rent from one hippie who deals with the other 20 hippies i'm like yeah that's that yeah that's it uh boomers in south carolina are another breed bro another breed it's not your typical boomer yeah all right uh anything else folks want to talk about. Otherwise, I would love to pitch you on always a space for stuff on the level, a crypto news deal. I can't wait for it. This is a crypto news deal on LoopNet.

2:33For those of you keeping track of it, I would say about that. Normally, we find these on website closers or some random Twitter account, but no. It's on LoopNet, the home of real estate deals. so the uh the heading here is top 10 crypto news media brand with global syndication doing six million dollars in revenue the asking price for this business is 16 million dollars it cash flows six million dollars per year on gross revenue of six million dollars per year with ebita of 3.5 million dollars per year for those of you keeping track at home it is impossible for those numbers to make sense. Cash flow equals revenue, but EBITDA is half of cash flow.

3:24This is on LoopNet, so. Oh, it's actually the listing. It looks like, so the listing comes through LoopNet, but it's actually from Biz by Sell, it says. Which are both owned by CoStar. So, yeah. I forgot. Yeah, that's why. They cross-pollinate to improve their distribution. Yeah, so those of you keeping track at home, cash flow is supposed to be how much cash is generated each year that was not in the owner's pocket the year before. And some people get that confused that that's how much cash comes into the business, that's how much flows into the business. But in reality, cash flow is how much does the owner put in their pocket from owning the business.

4:07So that's why that doesn't make sense. this also appears Mills not to be listed by a broker it's listed by Harrison Fry okay but I just looked him up Harrison is on Twitter and it's Fry Crypto at Fry Crypto Guy it's Harrison Crypto Guy Fry and he's the co-founder and CGO at Acquire.fi it's a marketplace for crypto M &A which might be the business in question okay wow Wow. Well, I mean, he may be listing this crypto business. I mean, Heather, I don't know your thoughts on this, but every time I've looked at people that are in the M &A small business broker space, I'm like, oh, I would definitely just pick a niche and own that.

4:56FedEx routes. Yeah. Oh, absolutely. Become a specialist in something. Yeah. The generalist business broker business seems like hell. not fun. He seems very young. Why the hell not? All right, so let me talk about this business. It has$3.5 million in profits, 25 million monthly impressions, and a DA score of 75. So that should be a domain authority score, I believe, showing how their domain of whatever this is for crypto news is high. So it's a high authority crypto native news platform and Newswire service ranked among the top 10 globally with extensive content distribution via Binance News, CoinMarketCap, Flipboard, and 300 syndication partners.

5:45The brand is trusted by a global audience and was awarded the Binance Square Creator of the Year. Backed by a 45-person team, the outlet reaches 25 million readers monthly and boasts 500 engaged followers across social platforms. Its global sessions are led by users in the US, UK, Germany, Korea, and Japan. It's had month-over-month growth, and it's a newswire service that's growing and projected to pass revenue from the news platform soon. So what is the difference between the newswire service? Oh, okay, okay, okay. So I think the newswire service is when people have crypto projects or whatever and want to pay them to send out a press release.

6:26It's kind of like business wire. And then the news platform is them reporting on stuff going on. yep yep i think you're right so key assets are 300 syndication partnerships so i guess they go to folks like binance who is you know uh an exchange for crypto and then they syndicate in news into those sites and get paid for that so that's a cute little business there um then there's binance square which has a half million engagements i don't know what binance Square is wide global reach and brand recognition, and they have exclusive event and founder assets. They claim to have some growth potential, monetized via newsletters, affiliate programs, or regional news editions, expanded to courses and media franchising already in process, opportunity to tokenize the brand at$50 million valuation.

7:18So the founder has built the brand from the ground up and is now exploring strategic opportunities. The business runs lean with minimal oversight, few weekly admin calls, and he's open to staying on during the transition to an advisory role. Full financials and traffic analysis available under NDA. Okay, so I'm going to pause there because there's a lot of jargon in there and we're going to have a fun part of this episode, which is, okay, who wants to try to explain what this business does in regular English? I'm the oldest person here, so definitely not me. Oh, you older than me? Oh, yeah. Don't look at it.

7:54Let's not talk about it. That's all we're going to say. good chat um okay mills you want to try let me do it i'm sorry i went down a rabbit hole of this guy there's a link to his website which is acquire.fi and there are listings on it that are just wow we'll have to look at those in a minute yeah i found this listing on his listing website also so i think he is the broker but not the founder yeah um okay so i think the confusing thing about this is there's news and then somewhere at the top they talk about syndication or global syndication okay i thought that they were syndicating funds all they're doing is syndicating news so they are acting as a distribution platform for other people's news headlines which you can pay to have them send out to their list and they also are a news platform where they write their own content.

8:53They have a team of 45 people who I'm guessing are doing writing and editing and maybe curating stories. And I'm guessing, but they don't say anything about it. I'm guessing they sell ads. Yeah. Yep. Yep. Yeah. I think they get paid ads and then they get paid to syndicate the content as well. And then they get paid to publish the news wire articles. so it's kind of like as an outsider in anything crypto related is i don't know who is trustworthy and who is the actual authority and i think that that is relatively true about the entire ecosystem so it makes me think that there is a need or there's at least demand for a company like this that says we can get more eyeballs on your project or your token or your offering and we can make it seem more legitimate and more valid because you'll have published news stories about you.

9:52Yeah. When there's a whole parallel industry exactly to this that exists in the conventional financial products, financial services world, right? Like Matt Paulson, who's on Twitter and is the best thing about Matt Paulson's Twitter is he's not using it for anything other than just like talking about himself and having fun. So he's totally unhinged. But his core business is exactly this, like reporting on the market, selling ads, and then turning that into customized ad packages for people that are selling info products and stuff like that, you know, trading newsletters, all that kind of stuff, which is like great business.

10:29Exactly the same business, just for crypto. That's what this is. Well, and there's huge established businesses that do this. Look at Morningstar in the traditional fund space. Morningstar has a bunch of analysts. They rate the funds. They give them stars. They check their performance against the benchmark. They give you information on manager changes. And Morningstar is a paid gateway, right? You don't just always get it all for free. There's kind of the free freemium model. And this seems like it's maybe a little bit more news focused than kind of like research and data driven. But there is definitely a precedent to your point, Michael, for financial products to have kind of these adjacent media rating exposure components.

11:18Yeah. So do we understand, are we aligned with what this business is? This is a... I think you guys got it. That makes sense. I would love to know the revenue channels, you know, like we said, there's probably ad revenue. There's you pay to, you know, put your story out there. Six million dollars seems like a lot of revenue for this. And I have a dumb question. If you are in a business that's totally in the crypto space, do you have revenue that is dollars and then revenue that is crypto? That's a great point. Only do things in dollars. I've never thought about that. But yeah, I mean, since the reason there's probably people who are like I want to pay you in a cryptocurrency.

11:54Right. I would think so. I would think so. Is 25 million monthly users a lot for this? I just have no frame of reference. I think that's an excellent question. I have no idea. Where's Bill when you need him? Yeah. You have some number people here. Yeah. It does seem like a lot of revenue for what it does. And that seems like a lot of impressions. Yeah. I think what you're also interested in is daily active users and that sort of thing. Impressions can be gamed a lot. I mean, you see that every time you go to weather.com now, an IBM business, which is just like a spammy, like how many ads can we show you?

12:36Yes, so bad. By the way, if anybody has a good website, a web native weather app now that's usable, I would love to use it because Dark Sky was on my phone, got killed by Apple, and now we have the terrible Apple weather app, which says it's going to rain and it doesn't work. And then you have weather.com, which is the spammy thing. Maybe we should get into the weather business, Mills. Do you know anything about weather? Every roofer is a weatherman is the favorite. Yeah, I bet. Or you move here where the weather never changes, so we just don't even look at an app. Like what is fluctuations in weather?

13:15I don't know. I mean, I guess if you're, if 25 million impressions, if you're doing display advertising, CPM style advertising is something very interesting. And I would be willing to bet this site has a ton of display ads on it, amongst other stuff. I bet we could go to MarketBeat and just see, you could just see the exact same playbook that Matt Paulson's running is what these guys are running as well, just for crypto. I wonder too, like a business like this, I get worried that do people actually go to this website? Like when they want news, are they going to this website? Like when I want news about the financial markets, I go to marketwatch.com.

13:52And they have written content, they have curated content, and they, you know, like I can look up any stock price, like ticker. Like that's just what I'm used to going to. That or Seeking Alpha. Those are like the authorities in my mind. Seeking Alpha is more like kind of investor articles, like they're written with some authority about specific stocks. I go to those, you know, directly. Is this the type of website that people wake up and they want to know what's going on in the crypto world and they type in this URL or like they have a link to it saved? Or are they going somewhere else? They're searching for like news about fill in the blank, some kind of altcoin or something like that.

14:33news about Huktu's Girls coin or whatever the thing of the day is. And then it's redirected to their website because they're so good at their content strategy and they just overwhelm the kind of topic of the day and traffic finds its way to them. Does that make sense? I'm not that person, but Yeah. I think it's the same game that people are playing when they play the market, right? and they're signing up for these newsletters, they're going to MarketBeat, they're trying to look for alpha, right? They're trying to look for an edge where they can go trade on that. And the same exact thing is happening here.

15:12And I bet over time, if you're an all-in-one kind of source for somebody, they come to you for, hey, what's happening in crypto today? Where can I find my next trading opportunity where I'm going to make money via investing or day trading or whatever, some combination there. So I would be willing to bet that the completeness here of how wide it tries to cover the entire crypto market is a moat for the business, right? You're going to get a lot of repeat customers because they're coming back trying to play the video game of investing for them every single day. Is this the authoritative site? Do we think so?

15:45Or is this one of a few? They say top 10. Yeah, top 10 is more than a few. So that's, I guess, I'd want to know where do you rank in the 10? Because if you're lower, if you're below five, even below four, I think, you're not in the top three, I feel like it's a vulnerable business because somebody else can sort of become the authority website and everybody else just becomes the secondary lower tier. Yeah, I think if you think about the parallel of what's happened in the financial markets, you got to assume that would probably happen here. And for conventional markets, there's a big fragmentation and segmentation around that.

16:28I bet they segment around the types of investors you're getting. You got the 75-year-old dentist, and then you got the retired dentist, and then you got the 40-year-old degenerate gambler who's buying and selling crypto tokens to try to make money and everything in between. So that'd be my suspicion of there. I don't think there's going to be a New York Times of this that becomes the two or three that dominate everything and nothing else matters. I bet it niches down and I bet you each one of these has a personality they go after. That's my guess. That would make sense. I think there's a lot about this business that is figureoutable.

17:03Yeah. Like there's tools online where you can analyze website traffic that I'm just not used to doing it. But if this is a space that you know, you're using the tools you already know about. You're checking their traffic. You're checking sources. You're checking, you know, how people are actually coming to that page. and you could figure out where does this where does this business actually rank in kind of the list of you know of news sources and then to your point heather quality of revenue matters because if it's all ad driven and they talk about this growing newswire business but it's out of the six million in revenue it's only doing a hundred thousand but it's growing a lot like what's the ceiling.

17:43What's the cap for that? Right. Right. And 45 people is a lot of people, you know, given the margin here. I think these 45 people must be over, you know, offshore contractors. They say the business is home-based. I don't even think they have an office. Yeah. So these are contractors probably. Hey everyone, it's Bill. And I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod. It's called CapitalPad. And it is the thing that I wish existed when I started my journey of operating and investing in small businesses. So CapitalPad is a marketplace for acquisition entrepreneurs, that is people who want to buy a business and need capital, to list their deals and solicit capital from other people who want to invest in acquisition deals.

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19:10It's founded by my friend, Travis, who is a phenomenal entrepreneur in his own right. So if this sounds like something that's appealing to you, if you want to buy a small business and need capital, or if you want to invest in small businesses, go check out CapitalPad.com and tell them that Acquisitions Anonymous sent you. they are contractors i bet there's a combination of i mean overseas folks i bet that's totally part of it you know it was an interesting thing i i knew a guy who started a competitor to our local newspaper he did a digital only local business site as a for-profit at the beginning and he said i asked him once i was like what was the biggest lesson you learned doing a digital native local newspaper.

19:56And he said, oh, when I started it, I thought I had to go out and pay reporters like $90 ,000 a year. Like pretty good wages to be a reporter, right? And he said, then I realized the people that would do an even better job than them were the 24-year-old recent journalism graduates, and they were working day jobs as waiters, and they were hungry for a reporting job that paid$12 an hour. He's like, that's a mistake I made at the beginning. And this is one of those jobs that people feel a calling to, and I bet you, and they just want to nerd out and be in the information chain and maybe trade on that stuff because they're getting tips and all that kind of stuff beforehand.

20:36I bet you it is not hard to find reporters and writers for this site and producers. I bet you the crypto nerds, they love it. And this guy has no problem hiring some guy from South Africa or Kenya or Honduras that just wants to nerd out about and get paid for it. Like I bet, I bet, I bet the labor is not a problem at all. Michael, I put a link in the chat to the other listings that are available from this brokerage. And I think it's interesting just to look at because the, there's a lot of it here that is just, I don't know. It's like ephemeral. It's not, you know, there's not, there's nothing tangible.

21:19Most of these, I think it even is like, I think it even says the number one marketplace for buying and selling Web3 businesses and assets. And there's a lot of like, you know, Web3 marketing agencies, all in one Web3 tool suite platform, established crypto launchpad. there's a lot of like uh gamification things in here um like mobile gaming platforms but then also gamified trading like there's just a bunch of like things that scare me a lot uh relative to yes they could be amazing opportunities but if you don't know this space like me and you're a total outsider. I am the patsy at the table. And sure, these businesses could take off and do fantastic, but they seem like very, very expensive and highly risky and not a lot of cash flow to back it up.

22:17And they're not pre-approved for an SBA loan. Heather, I was like a layup. I was like, here you go. I think this is just such an awesome way to create a business as well. I love what these guys did with acquire.fi, even before we start talking about the listings they have. It is so cool that they saw crypto happening and they said, okay, well, crypto is happening. There's this trend. How can we take advantage of that? Oh, there's going to be M &A in the crypto space. So let's build a brokerage for crypto, a business brokerage for crypto. There are just so many patterns where you can do that. And you see a trend happening, you're like, okay, AI is happening.

23:00You know what I'm going to be? I'm going to be the law form for AI stuff. I'm going to be the law. I'm going to be the business broker. I'm going to be the insurer for, for this group. And you know, it all starts with just identifying a trend. So, I mean, the first thing is like, Mills, this brokerage is awesome. I, you know, these are real deals. They're selling them. No regular business brokers touching them. Like that's, I mean, I'm so impressed. I'm scared. i mean i agree if there's any place in the value chain you want to sit it's owning the marketplace where all the businesses come to sell i 100 % agree with you there uh they've done 40 million in deals they claimed since i got started so order book size what does that mean in this case that's like the total asking price of all the businesses they've listed?

23:51Order book? I don't know. Oftentimes what marketplaces like this do is charge you to get premier access to deals, kind of like Acquare.com does and stuff like that. I don't know if that's the case or not. It looks like it's the total number of shares or contracts that a trader has available to buy or sell. They have a half a billion dollars in listings. on the site, 305 businesses and 16 ,000 users. So their close rate up until this point is 1%. Yeah. I mean, well, I say close relative to open orders. Yeah. 10%. It's very like trader terminology. Oh, yeah, yeah, yeah. So I was missing a comma in there.

24:3810%, yeah. They also offer secondaries. So there's a whole secondary marketplace for these privately held shares so it's an exchange yeah

24:54there's a door of the I found it for you right here Heather there's a door of the explorer crypto what could I have done without you can you send over$500 ,000 this afternoon it's a minimum ticket wow for the door of the explorer coin none of these things even I've never heard of any of these How is it that they're raising this much money for something? You got me, bro.

25:24Oh, man. Okay. So let's go back to the deal. Yeah, sorry. This was a rabbit hole I think worth going down. It was super interesting that we found it. So is this business sellable for$16 million? Did you see the financing note at the bottom, by the way? they say basically the majority of majority must be bulk of cash upon closer can be creative on the rest of the deal they're like look if you give me 12 million dollars we can work out the rest well I think Heather what we need to do is we will invent our own crypto coin called horse coin okay yeah so it's called horse coin and we're gonna I'm gonna you're gonna issue the coin you're gonna do a million coins And I'm going to buy a coin from you for a discount.

26:15I'm going to buy it for$1 ,000. So then that would set the price for the value of your horse coin at$1 ,000 million, so a billion dollars. So then we'll take half of those horse coins and then we'll use those to buy this business. So smart. I love the creative process. Besides, you went with horse coin and not SBA pre-approved. I was going to go for worm farm coin, but that was already taken. Somebody already issued that one last week. We won't need SBA loans anymore with all these horse coins we'll have. This is great. I mean, the irony is I just gave you the entire FTX business model. Yeah. That's what these guys did.

26:58We're going to invent fake coins. We're going to set a weird price for them, and then we're going to treat them like they're dollars. Like, okay, cool. Thanks. This is great. That's why my whole question when we're trading with crypto businesses is, why are we listing them in dollars? Yeah. Right? Yeah. I missed this before, but they do say full financials and traffic analytics available under NDA. I mean, that at least tells me that I think there's probably, if this is a space you're familiar with, they know what you want to see, which is you want to know the traffic. It all hinges on the traffic.