Flip Fund® Logs Pt 1

Flip Fund® Logs Pt 1
This post is not a solicitation for investment, but a documentation of our journey raising a fund. Not enough content is out there around tactically how to do this. Hopefully I can change that just a little.



Spotify Amazon Apple

Because I'm a glutton for punishment, about a week after our largest acquisition ever,  I thought now, in the midst of what to everyone in tech feels like a recession, we should try and raise our first ever Flip Fund®. All while not working full time on XO 🙃 .

After our initial failed raise, this is the current concept:

  • $500k - $1M
  • Buy 1 SaaS company
  • Try to double it and exit in 12-24 months

If it sounds like an all out wind sprint ... it will be.

a fund concept we're exploring

As of our latest acquisition (growthbarseo.com) I am personally fully allocated. So for us to do more acquisitions we either need to:

  • win the lottery
  • sell some assets we already own
  • raise outside $

We don't have anything at the moment we're eager to unload, and have a few that are a bit too early to unload. So that's out. Raising outside $ is the next best thing.

We're going to attempt (this is attempt 2) to get 10-20 people at $25k ish each. Ideally one or two come in with $100k (besides us). We don't have anything set up yet. My goal is to soft circle $250k (outside of what we're going to put in) and then i can set up the LLC and start the actual process.

Discretionary capital is insanely hard to raise for. You have to have a lot of trust built up. My hope is that by writing this newsletter every week for the better part of 2 and a half years, I've built up at least a little.

We currently have ~800 people on this newsletter. Most of you are tire kickers / just following along. Hopefully ~80 of you are interested and ~8 actually write a check. That would be a reasonable conversion rate. Is 3 years of content + trust building enough? We shall see!

My secret agenda this whole time has been to build up this newsletter of accredited investors so we could eventually raise, but it's still of course going to be a dog fight and probably 100 zoom calls. Don't cancel me for saying dog fight.

I sent the first email out to our special list of investors with our deck this week, and 2 lovely folks committed in < 10 minutes. If you'd like to be added to that list let me know.

I'm cautiously optimistic. It's either raise $ or wait, and I'm impatient. But more than that, I'm also confident in our team and our skills. I also think this stuff is fun as shit and that's hard to compete with. I'd rather go head to head with a fortune 1000 company than 5 youngsters having the time of their lives together building a rad software company.

June Stats

Here's our current P&L as of June 30. We have about a $11,500 burn right now, but we did just buy Growthbar, however we do have some of that seller financed so we don't get to keep all that cashflow. But we also sold Workclout and have some cash coming in from there too. Things are getting just slightly more complicated with every new acquisition. Shouldn't be surprised, but of course, I am.

Most days I feel like a living bank account myself, where shit comes in, shit goes out and I try to hang on to a little lol. Growthbar is the only company we have any debt on though and in 18 months we'll own that outright too and be well in the green. We're considering syndicating Growthbar for Flip Fund® 1. It would be easier for people to wrap their heads around a single deal we've already done. Less risky to some extent because we have financials for the deal, and some people won't like it, and some people will, and that's totally fine.

Growth Bar Update

We're < 10 days into our acquisition of https://growthbarseo.com and are just speaking with customers, watching users, and fixing some basic things we think might increase conversions from visit -> signup -> paid.

The big one we noticed was a forced credit card for a free trial. I get why companies do this, a metric ton of people sign up with like 8 gmail accounts ... why? To save like $0.26 on GPT costs? Idk, I don't get it either, but its everywhere.

We're going to remove it and measure. I personally don't like the credit card trials. They don't measure intent like they used to a few years ago. People are wise to it, and put in a temporary card or just immediately cancel.

Stripe also seems to hate this. When we acquired Growthbar there was $28k sitting in stripe (they forced this) just for chargebacks because all the free trial payment failures cost us real $$. Close to $1k just in Stripe fees alone every month.

That will go away next week when we push this out. Let the experimentation begin!