Some product demos get you a sale. Shawn Finder’s product demo got him an acquisition offer.

Finder wasn’t looking to sell Autoklose, a sales engagement platform, when he set up his booth at an Ottawa trade show. The bootstrapped SaaS company was using customer revenue to fund growth, and revenue had just crossed $1 million, he said.

Yet Finder describes himself as someone who is always open to listening, and that’s what he did when the CMO and CEO of VanillaSoft, which is also a sales engagement platform, walked up to his booth and sparked up a conversation at the SaaS North conference. Finder gave them a demo, and that eventually led to a 7-figure sale in 2020.

But it took a while to get to a sale price both parties were happy with.

The early days of building Autoklose

Finder had been an entrepreneur since his early 20s, when he opted to pursue an MBA instead of a professional tennis career, though he was internationally ranked. At 24, he was importing cosmetics packaging from Asia and selling to retailers in North America. By 28, he sold a business for the first time, an email database company called ExchangeLeads.

In 2017, he launched Autoklose with his co-founders: Vladan Djokic, a developer, and Marko Dinic. The SaaS (software as a service) helps companies close sales using email automation and their built-in database for B2B contacts.

Instead of sending marketing messages through third-party email service providers like MailChimp or Constant Contact, Autoklose integrates with sender email accounts to deliver marketing messages directly to recipients, which helps sales teams contact more prospects without losing their personal touch. It is exactly the kind of technology VanillaSoft needed to scale.

AutoKlose, which was based in Canada, carved out a niche by serving small and medium-sized businesses. They ran a lean operation, outsourcing development work to Serbia, where the company’s lead developer, support and customer success functions were based. It spelled its name with a k because it was far cheaper —$20,990.01 cheaper, in fact—to acquire than it would have been to buy, Finder told us.

Within six weeks after launch, Autoklose was turning a profit, Finder said.

Within six months, a six-figure contract with Canada’s largest cable company was generating enough revenue to pay the bills and fund the company’s growth. The company hired a CMO and SEO specialist and brought on writers focused on content marketing.

How Autoklose’s founders navigated sale negotiations

When VanillaSoft approached Autoklose at the Saas North conference in Ottawa in 2019, Autoklose had been in business for just two years. The company was selling both software subscriptions and access to a database of millions of email addresses, and it had found a strategic way to sidestep email consent laws.

But VanillaSoft’s initial offer wasn’t close to what the founders of Autoklose wanted. The initial offer was around 2x revenue, Finder said on the Built to Sell podcast. Finder had something closer to 7x or 8x in mind.

They couldn’t agree on a sale price, and at one point, VanillaSoft walked away. They tried again a few months later, and this time they were able to agree on a price. It was a 7-figure sum, and a 5x multiple of revenue, Finder said—more than double the original offer.

How’d he nudge up that sale price? While most people assess value as a multiple of revenue, Finder took a different approach, saying, “my team and my product have a value,” he recalled on Built to Sell.

He also knew VanillaSoft needed the company’s technology, and it would take more than a year to replicate in-house. “I knew their product, and they really did need the email side,” he said.

With the sale, VanillaSoft gained the ability to give their customers “access to a database of over 40 million relevant, high quality, validated B2B contacts within a variety of industries—further securing VanillaSoft’s position as a one-stop shop for SMB sales teams,” VanillaSoft shared on its website.

At sale, Autoklose had about 3,000 customers, an email list of 18,000, and 28 employees, Finder said.

Telling his employees was one of the most challenging parts of the sale, he recalled. Until the deal was done, he only allowed VanillaSoft to talk with one other person at Autoklose. “That way if it doesn’t happen, your employees are less likely to be looking elsewhere because they think the company is up for sale,” he said. To make sure everyone found out at the same time, Finder announced the sale on a company-wide Zoom call.

After the sale, all three co-founders joined VanillaSoft: Dinic as a fractional CTO, Djokic as a senior development lead, and Finder as a general manager for sales, according to VanillaSoft.