This founder sold his marketing agency to his own VP of operations

When founder Mike Belasco was ready to step out of the agency-life grind after 17 years, he sought out the perfect buyer — and found one inside his own company, custom digital marketing agency Inflow.

He believed their vice president of operations, Jen Holzman, would make the ideal successor, so he took a leap of faith and asked her.

“I really felt like she could do it all, if she was put in that position,” he said, adding that a takeover by Holzman meant he could have the benefits of getting acquired while leaving his employees and clients in trusted hands. “Both were really important to me,” he said.

The leap of faith paid off. Belasco was able to pass off their 50 clients and 21 employees to Holzman in May 2023.

“There wasn’t the stress of showing all your cards to a total stranger,” he said. After all, from her position running operations, Holzman already knew how Belasco managed the organization and how the finances worked.

“It really made due diligence sort of a non-event,” he said. “It happened, but there weren’t any surprises.”

Belasco acknowledged internal acquisitions rely on having someone trustworthy in the right place at the right time. He also said they can lead to a lower payout since negotiations tend to be more straightforward, with every detail already on the table, and employees might not have pockets as deep as an external buyer.

But for Belasco, selling internally was worth it.

“This was giving me what I wanted, which was a smooth, clean exit,” he said. “But more importantly was putting the employees and clients in a good place.”

Growing Inflow into a successful marketing agency

Belasco started his bootstrapped agency, originally called seOverflow, in Denver, Colorado, in 2007.

He’d been offering web development and SEO services under the name Mike the Internet Guy. He noticed many marketing agencies and web designers didn’t yet understand how to optimize visibility in search engine results, and his agency started out by providing those kinds of companies with white label SEO solutions for their clients.

As the company grew and the work became more technical, it became difficult to serve clients behind the scenes. Belasco found it would be better to help clients directly, so seOverflow rebranded to Inflow, becoming a full-service digital marketing agency that focused on serving e-commerce companies.

Eventually, he noticed that while Inflow was driving a lot of web traffic for his clients, that traffic wasn’t necessarily converting into sales. So he partnered with a conversion specialist and started a side hustle, ConversionIQ. This led to his first small taste of M&A (mergers and acquisitions), as he later bought out his partner and folded ConversionIQ into Inflow.

Throughout the process of growing his agency, Belasco said, the company’s main driver for earning clients was using content marketing based on real-world client experiences. “We consistently wrote and shared expert content that immediately helped and built trust with prospective clients,” he said. “Without the results, our content would not have been impactful.”

Moving on from agency life after acquisition

By spring 2023, about 17 years after founding Inflow, Belasco was ready to pass the torch and do something less people-intensive.

He’d been approached by interested parties before, but those offers involved working for someone else or getting merged into another organization. (Many agencies sell via an acqui-hire, whereby the team joins another company, and the founder gets paid in part through an earn out.) None of those options seemed to be a fit.

When he approached Holzman to gauge her interest in acquiring Inflow, he was happy to learn she had an existing interest in buying an agency, as she had entertained the idea before she was hired in 2021.

While the sale price was not disclosed, the sale multiple was 2.5x SDE (or seller’s discretionary earnings), Belasco said. One strategy they used to make it work for both parties was seller financing.

Belasco and Holzman waited nearly a year to announce the acquisition publicly — “to ensure a smooth transition for our team and clients,” he explained on LinkedIn — and Belasco remains available to Holzman and the Inflow team as a strategic advisor.

Since selling Inflow, Belasco attended an intensive training program through Acquisition Lab and is looking to acquire online businesses through his self-funded Altitude Search.

He also helped grow his wife’s educational tutoring and coaching startup, Can Do Learners, and served on the board for nonprofit Been There, which creates entertainment to spark awareness and promote solutions to problems surrounding homelessness.

Next up, Belasco, along with his long-time business coach Karl Sakas, is creating a workshop to help agency owners create an exit plan. That program is scheduled to launch in October 2024.

Belasco said running an agency was “an entrepreneurial roller coaster, and it was just my time to get off the ride.”