Raj Mahajan bought a salon software business, tripled it to $11M ARR. Then his biggest customer launched a competitor. Register for the webinar: Tax Issues: Entity and Deal Structuring - TOMORROW!! - https://bit.ly/4frQstm Topics in Raj’s interview: Wanting to move “from coach to quarterback” Buying a niche point-of-sale software company Converting to cloud-based SaaS Growing recurring revenue from $4 to $11 million Establishing a headquarters for the remote company A failed exit to private equity His biggest customer stealing his software Emotional turmoil of Covid + lawsuit Choosing to protect his team Lessons learned from good and bad years References and how to contact Raj: LinkedIn Jaan Capital Lessons for New Operators - 2020 The ecosystem for serious acquisition entrepreneurs—education, capital, community, and post-close support to buy and grow a business: The Acquisition Lab Get a complimentary IT audit for acquisition diligence or post-close transition. Visit inzotechnologies.com/eta. Get a free review of your books &amp; financial ops from System Six (a $500 value): Book a call with Tim or hello@systemsix.com and mention Acquiring Minds Connect with Acquiring Minds: See past + future interviews on the YouTube channel Connect with host Will Smith on LinkedIn Follow Will on Twitter Edited by Anton Rohozov and produced by Pam Cameron

60% Concentration That Killed an Exit

Acquiring Minds

[SPEAKER_A] In December 2019, today's guest was 3 weeks from closing a sale of the software business he'd acquired with a traditional search fund. This was to be a fantastic exit for Raj Mahajan. And just like that, his biggest customer publicly announced it was building a competing product. His buyer walked. What followed is a story about what concentration risk looks like when your biggest customer not only chooses to stop supporting you, but actually starts stealing from you. Raj bought Super Salon in 2015. It was point-of-sale software for multi-location salon owners. He converted it from on-prem software to cloud-based SaaS, tripled annual recurring revenue, and took it to market at the right time in a hot category. Then came the unraveling. A whistleblower— a lawsuit filed mid-COVID and a settlement that Raj describes as the hardest thing he's ever done. Listen for his reflections at the end of our conversation, reflections originally written when he thought a big exit was 3 weeks away and revisited now on the other side. Raj shares his insights on hiring, on culture as armor, and on, quote, My attitude is my decision. By the way, Raj is now searching for another company to acquire to get back in the game as a search fund CEO.

[SPEAKER_B] We hear why.

[SPEAKER_A] Here he is, Raj Mahajan, former CEO of Super Salon. How you structure your acquisition, the entity, the deal itself has tax consequences that can follow you for years, and they're much cheaper to get right up front than to fix later. So in a webinar tomorrow, Tuesday, attorneys Bill Barlow and James David Williams are hosting a webinar with special guest Joshua Siegel, a tax attorney, to walk through entity and deal structuring issues and their tax implications.

60% Concentration That Killed an Exit

Read the full transcript

The candid version is on a podcast,
not the earnings call.

60% Concentration That Killed an Exit

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.