1881 – Buy-Grow-Sell SaaS Companies with Alex Minicucci

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0:58With us right now, it's Alex Minacucci. Alex, you are the founder and CEO of Relentless Venture Studio. Your website is berlentless.com. Alex, thank you so much for joining us. Hey, Josh. Thanks for having me today. Appreciate it. Absolutely. So I'm really interested in learning about what Relentless Venture Studio does, because it says right here, you buy and sell SaaS companies. Please tell me more. Yeah, I'd be happy to. You know, it starts with my origin, building software companies at an early age. I've been from ideation to platform to getting these things out. I'm making a few million dollars to exit.

1:40So I've understood and developed a life cycle of build and sell companies for the last 25 years. And I was approaching 40 years old in 2018. I said, how am I going to take my game to the next level? And how can I give back to other entrepreneurs that struggle with that life cycle? As most people know, nine out of 10 startups fail. It's a terribly high failure rate. Very hard to get through that process. And most entrepreneurs are trying to solve a problem or passionate about a certain widget. This thing that they want to do, fix or build. But they're not great at building business. It's like being a great chef, but trying to run a restaurant.

2:17There's a lot of that other stuff that's involved in successfully going to market. So I created Relentless Venture Studio as an effort to partner with entrepreneurs who are passionate about building a great product, building a great widget, but need help. And help in a different way than just check writing. You can give capital, but there's actually a lot of risk in trying to deploy capital. Trying to find great sales managers, salespeople, CFOs. if you're a tech wizard, finding hiring and managing these people has a lot of risk and it has time involved. So what we did is we thought, well, how can we create an efficient way to help entrepreneurs, both time and cost effective, while creating some economies of scale and staying truly fully engaged with these entrepreneurs as they move forward?

3:06So that was our Relentless really not less venture studio model so what i do is i try to find entrepreneurs that have got some momentum in market but need help supplementing the rest of their business and take it to the next level i come in and partner with some capital but also sweat equity our team comes to the rescue our cfo comes in and helps manage finances my cro helps develop sales process my cto helps oversee DevOps and building tech. So all of them, you know, instead of raising 3 million and trying to deploy capital for all these resources, we give them a million and then do, you know, 80 % of the things that they would spend the money on for them as an active and experienced partner in their business.

3:49So it's a, it's a different model. It's not for everybody, but we find our experience and ability to actually do quickly has created a great partnership for the right kind of companies to come on board. Yeah. I mean, for the right person, I mean, how perfect for them, right? Because they just, you know, again, if what they love more than anything is software that solves a problem in the market, but they're not necessarily, I mean, they could go through the effort of hiring a fractional CFO. They could hire a fractional CMO. They could dump a bunch of money in ads. They could do a lot of experimenting and absorb a ton of risk or partner with you and they don't have to worry about all this.

4:32I think that part of it is solved for them, if I'm understanding this correctly. Yeah, 100%. I mean, we use the mantra, experience matters. And so, you know, you're learning on the job. You're learning with other people's dollars oftentimes. And in tech, time matters. So there isn't a lot of time to go through this guess and test, figuring things out. that's why so many of these companies fail. And there are great programs out there that are incubators that try to help and support groups and other organizations. And all of those are meaningful and great in their own respect. But I think a lot of times you've got a founder entrepreneur who's really passionate about product.

5:12And then you've got all this other infrastructure required has very little to do with product. And that's to do with outbound selling, scripting hiring salespeople kpi measuring right like you know the admin side running payroll having the right insurance no right the right legal stuff so now your tech guy you know is trying to deal with all this other stuff and learning what kind of nda do i use what kind of contract i put for my clients what kind of privacy policy do i use what kind of backup systems am i using and password protection for my staff and actually they're not working on product they're figuring all this other stuff out for the first time and it just becomes a mess so i'm trying to streamline that model and have founders do what they love and focus on great product, great customer experience, while you've got an admin team that's shared amongst multiple companies, creates economies of scale and efficiency for them.

6:01So it just kind of works out as a win-win for everybody. Yeah. And so, Alex, you typically are working with companies at what stage? And I think, you know, obviously, I'm looking at your front page of your website, and you kind of have this matrix of kind of startup to 5 million AR. and then your sweet spot is somewhere in the middle. Do you mind talking just a little bit about stages and kind of where you typically love to come in? You know, we like to come in at about a million in ARR where there's a viable product that usually needs to be tuned up for scale. We can put some real energy behind scaling a sales process as opposed to discovering it.

6:40So we can provide some advisor on that. But once you're at a million in ARR, we kind of know the target market, who we want to go after. And usually that's where the entrepreneurs struggle with customer engagement, lifetime value, and scaling a sales team. And so that's where we really shine. We come in and say, all right, you've got a couple of salespeople, you've managed to get to this point. Now let's create some infrastructure, but we're going to have 15 salespeople and we can really scale. But usually at that point, now you've got the hole in the bottom of the bucket. What are we doing to keep customers happy, improve lifetime value, making sure that you're not shirting as fast as you're growing.

7:16So that's where we like to put a lot of energy and emphasis on ongoing education and customer engagement so that they're utilizing the product, get great value from the product. We look at ways we can tune up the technology to make it a little easier for onboarding, UI UX improvements to make it simple to use based on feedback from customers. So at about a million in ARRs where we've got enough of that data, we can come in and deploy what we do and start building some infrastructure to help that business get to$5 and$10 million in ARR. Yeah. And what do you like about SaaS? You know, as a software guy by nature, I mean, I love where software can help create scale, kind of duplicate process, create engagement with customers that has a more long-term vision behind it.

8:04I'm a relationship-oriented by nature. and that's what I love about you and your podcast. You're very relationship-oriented, the way you try to help and work with people. So SaaS kind of more implies a longer-term engagement and relationship building and solving people's problems over time. So I think the nature of that model, as opposed to being really transactional, suits my personality. And from a business economic standpoint, you kind of build an annuity as you build a SaaS business over time where you really get to where you have a predictable inbound lead flow. You know what your customers need and continue to refine and add value and then work towards that longevity and building that relationship with your clients over time.

8:47So I just, I love that ecosystem and lifecycle of the customer journey on most SaaS businesses. Yeah. Can you tell me a little bit more about the, obviously, let's say someone saying, well, I wonder if I would be a good fit. And I'm kind of curious about the models. Obviously, it sounds like they're sharing in the equity of the company. Do you mind maybe just kind of sharing a little bit more about the model? Yeah. You know, I mean, we're not for everybody. And so we see almost a deal a day. We bring on, you know, five to 10 a year. So we're pretty selective on what the fit is. And we have to be the right fit for somebody else.

9:23So yes, we do take a piece of equity. We don't do much work for hire. The way I've always looked at it is one for myself. and I think of this conversely with who I work with, you want people to really have some skin in the game and that participate in the success of your company. So when you just hire somebody out, I mean, not that there's anything wrong with that, but when you hire somebody out, I mean, they're going to get paid to deliver their service and there's no real upside for your success. So we come in and if I say, for half a million, I believe I can transform your business. Then forget the half a million.

9:57I want a piece of me transforming your business. So we typically come in and take an equity stake, use a minority stake, choose around 20 or 30%, depending on the level of engagement. So what we do is we assess what that business needs. We assess whether we're the right fit for that business. It all starts there. In some cases, we don't solve the problems that an entrepreneur has. And so we will either refer people out to our network of partners. We do a lot of pro bono, just coaching work. Sometimes I say, you know, I think I can help you, but I don't think I do enough to warrant owning a piece of your company.

10:34So let's just do a call for an hour or two of once a month, see if I can give you some advice. I'm happy to help the entrepreneur community in whatever way I can. So we try to make time for that. We need to. So we'll just help out in cases where we think we can be some value, but not huge value. But we're going to roll up our sleeves. We'll look at, you know, we'll create a formal engagement. This is what we'll do for you. What are you going to expect from us and hold us accountable? In exchange for that, we're going to value business and take a certain piece of the equity. And now we're a true partner in that business.

11:06And at that point, the Relentless team becomes their team. Alex becomes their partner. And we're off to the races working together. Yeah. So obviously, there's risk involved for Relentless as well. So you certainly know what your own superpowers are. And aside from kind of the all-star team that you're able to bring in, it looks like you guys are pretty well set up with lots of partners that you can bring in to solve issues. Absolutely. We have a great network. We spend a lot of time networking with different service providers, different incubators and groups, a handful of private equity. So sometimes we help build them up and then we have the right kinds of partners that are buying companies so we can help facilitate an exit.

11:51We try to just participate in the entire ecosystem. And I actually host an event in my home every three months. We call it the Relentless Insiders. And we usually have 80 to 100 people, usually mostly in California. I'm based in California, so from the Bay Area, L.A. Coming to my home, we have sushi and wine. And then we actually have a Shark Tank-style section where we let companies pitch. And we've raised on the spot a million dollars for early-stage companies. We've helped people get financing. We've connected people and we don't take anything of this. We, we, we weren't, we're not paid for it.

12:26We don't get a piece of it. We just love connecting people and helping the entrepreneur community. It's so hard trying to build a business. And I think you do create a community around that effort. So we love to help out where we can. So even if, if we can't help directly, I mean, you know, the roll up your sleeves model, we do whatever we can to try to connect people to get them the resources that they need. Man, I appreciate that. You sound like a man after my own heart, man. And just, you know, you do good in the world and, you know, you keep doing good, especially with the right folks and the right crowds and stuff.

12:55And, you know, I truly believe you get to a point where you're not able to outgive the market, right? Because you've already just shown yourself. Can I just ask you a final question? Can I just ask you about that type of philosophy and why you believe that that's just such an enjoyable bond? Editorializing here, why you choose that way of doing business? Well, you know, I appreciate you asking. I grew up in a small town. I'm an Eagle Scout. I was an altar boy as a kid. I did all that kind of stuff. And I'm very community oriented. And when I was approaching 17, 18 years old and thinking about becoming an entrepreneur, the resources weren't abundant here.

13:34And it wasn't a lot of people to just connect with and talk to about this. So I realized early on how important it is to find those connections, find those resources, and cultivate those relationships over time. I know I met some people early on who were very transactionally minded and it's short lived. If you say, I'm going to be in business for the next 30, 40 years, in some capacity, 50 years, I mean, I'm willing, I do this until I drop dead when I'm 90. I love what I do. I would hope that I would have some relationships where people know that they can count on me to be reliable, to follow up, to connect.

14:11I don't always have my hand out trying to grab money out of their pocket. Like it's you can give a little and then when it's time to come back around people reciprocate um and we as they say a rising tide raises all ships right so um somewhere in there with my i think my community oriented upbringing uh has really given me a love for that longevity i think it's good business um for me i love what i do which means there's a there's a personal element to the relationships that i build um i love seeing people uh develop success whether i'm directly or indirectly a part of it. I think that it helps everyone.

14:45So yeah, just somewhere in there, it's just been part of my DNA to try to invest in those around me and help out. And I've been very fortunate in my business career as a result of that in some way, shape or form. All right. So let's talk about who needs to get to be relentless.com and what their next steps would be? Yeah. Yeah. Visit the site Be Relentless. It's berelentless.com. You can learn a little about what we're doing. We've got our portfolio companies on there. You can submit on the site or find me on LinkedIn. We do a lot with LinkedIn, so you can connect with me on there and follow up.

15:21I'm looking for where I can help out most are SaaS-based companies that have the one to five million in ARR that are looking to scale the team, build things out, say, you know, what's the vision look like to get this to$30 million in ARR? And there are some real milestones with respect to building on infrastructure, building out managers, measuring your performance. You can start spending a lot of money on ads and retention and things like that. So we like to work with those kind of companies to help them get to the next level. So that's, I think, where we add the most value. Yeah. Excellent. Excellent.

15:57Again, berelentless.com. Alex Minacucci, did I say that correctly? Yeah, founder and CEO. Thank you so much for joining us. Yeah, Josh, thank you. It was a pleasure. Thanks for having me on today.

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