Deal fatigue is real: How these engineering firm founders navigated a 15-month sale process

Pramod Dabir and Varun Bathina, the founders of product engineering firm West Agile Labs, knew selling their business could be a grueling process.

But they didn’t expect the buyer to hit pause to buy another company. Or one of the firm’s largest clients to file for bankruptcy. Or for an entire bank to collapse.

Or that the deal would take 15 months from start to finish.

Their persistence ultimately paid off, when they sold to a private equity firm in March 2023 for a mid-8 figure sum.

Bootstrapped West Agile Labs grows to $16M annual revenue

Dabir and Bathina founded West Agile Labs in 2012. The product engineering firm specialized in design, development, and consulting services for startups and enterprise organizations.

The bootstrapped organization was headquartered in San Francisco, where Dabir is located, but the rest of the team — 350 people at sale — were based in India. Around 30% were contractors.

This was a big challenge for the founders: deciding between an onshore vs. offshore strategy. Ultimately offshore was the right route, Dabir said.

“Given the cost structure, quality of talent and ability to scale very quickly, it made sense for us to transition much of our operations all overseas,” he said. “The stress of having U.S. salaried employees sitting on the bench if a project turned over was not worth it, and we felt we could attain higher margins within our overseas teams.”

U.S. firms who were interested in buying the business didn’t react negatively to the team being based in India, Dabir said. Instead, they tended to be impressed with West Agile Labs’ lean operations. But having a team overseas did put some pressure on company value since a buyer would have to beef up the management team, he said.

West Agile Labs’ growth strategy was simple: to grow with clients. Notable clients included Samsung, Johnson & Johnson, Ritz Carlton and Natera, according to Dabir’s LinkedIn.

“We focused heavily on quality and execution and then grew with our customers,” he said. “It’s much easier to grow with your existing customers than to have to go and find new ones.”

For example, West Agile Labs worked with an early-stage startup, building their first minimum viable products. As the startup raised capital, the firm scaled with them. Then, when the startup was acquired, West Agile Labs worked with the acquirer on integration.

They also worked with many medium-sized companies on small assignments that later grew into bigger, multi-part projects.

“We became mission critical to so many organizations where it would be very challenging to rip us out,” Dabir said.

At sale, West Agile Labs had 30 customers, with five clients making up about 80% of its $16 million annual revenue.

Selling West Agile Labs: a 15-month process

A decade in, and Dabir and Bathina were looking to sell.

“I had been running the business for more than 10 years,” Dabir said. “We grew the company to a very strong size quickly and felt it was time to take some chips off the table.”

Dabir also wanted additional partners to work alongside who were invested in the growth and scale of West Agile Labs.

“I felt having additional resources and brains around the table was necessary to take the business to the next level,” he said.

In January 2022, Dabir and Bathina hired 7 Mile Advisors, which provided investment banking and advisory services and has since been acquired by Houlihan Lokey.

After multiple bids, they signed an exclusivity agreement with Trive Capital, a private equity firm. Dabir was impressed by the firm’s stellar reputation, and he liked the people. He was also drawn to the firm having “significant capital behind them to make add-on acquisitions,” Dabir said.

Which is exactly what happened — and one of the reasons the deal took 15 months to complete.

Trive Capital pooled capital with BayLink Capital, a private investment firm, to purchase West Agile Labs and another company called Wavelabs, which provided engineering research and development services and solutions. The goal was to merge West Agile Labs with Wavelabs.

“The combination of two PE funds acquiring two companies at the exact same time, both with onshore and offshore operations, made the deal very complex,” Dabir said.

During this process, one of West Agile Labs’ largest customers filed for bankruptcy, which led to renegotiation around the deal terms.

Then, in the spring of 2023 around three weeks before the deal closed, Silicon Valley Bank collapsed, which led to a run on smaller banks. This impacted Trive Capital, which was getting the loan to acquire West Agile Labs from a community bank.

“There was a lot of stress during that period of time,” Dabir said. “The fact that it took so long definitely created a significant amount of deal fatigue.”

To combat this deal fatigue, Dabir always kept his eye on the bigger goal. He also relied on his family and business partner for support.

The biggest challenge was trying to run West Agile Labs and sell it at the same time — “basically doing two full-time jobs,” he said.

In fact, in the 15 months since the acquisition was initiated, West Agile Labs had grown.

“Since the deal took so long, I ended up going back to request a higher price since our business had grown quite a bit during that time period,” Dabir said. “I didn’t get exactly what I wanted, but they did move up on value.”

The sale to Trive Capital and BayLink Capital finally went through in March 2023 for mid-8 figures.

An acquisition, then a rebrand

In October 2023, Trive Capital announced that, alongside BayLink Capital, they merged West Agile Labs with Wavelabs Technologies to form Veltris. The technology services company specialized in developing data and AI solutions for small- and medium-sized businesses and Fortune 500 clients.

Dabir then became president of Veltris, and Bathina took on the role of senior vice president and general manager of design and digital practice.

Looking back at his experience, Dabir encourages founders who want to sell to “really keep things in perspective and not get too greedy.” He also emphasizes timing is key — though it’s difficult to predict what’ll happen.

Since selling, Dabir said he was able to take a breather and catch up on life. He’s also started investing through Open Doors Partners, which he founded in 2017. Their mission is to democratize private investing by helping working professionals access unique investment opportunities.