About this episode
When Matt Schmeltz and his partners acquired CloudCraze, it was a simple software application helping businesses that use Salesforce.com manage their customer relationships. CloudCraze generated $2 million in annual recurring revenue, but Schmeltz & Co. figured it could do much more.
The acquisition kicked off a three-year value building odyssey culminating in a 9-figure acquisition offer from Salesforce.com. It was a spectacular rise, which is why it was so shocking when Schmeltz’s largest investor threatened to kill the deal in an expletive-laced rant claiming Schmeltz was not looking out for his shareholders. It was a surprising turn of events that almost lead to disaster.
In the end, Schmeltz saved the deal and delivered a 15:1 return on investment for his shareholders. It’s a fantastic story in which you’ll discover:
- What drives value for an enterprise acquirer like Salesforce.com.
- The danger of having your most natural acquirer sour on their decision to buy you.
- The three most essential things Schmeltz and his partners did to turn a $2 million business into a 9-figure exit.
- The benefits (and risks) of partnering with your most natural acquirer.
CloudCraze was built on the Salesforce.com platform, which ended up being both a blessing and a potential curse for Schmeltz. The integration helped CloudCraze scale and attract the attention of Salesforce, but Schmeltz also risked becoming too dependent on Salesforce, which could undermine his negotiating leverage. Not being too reliant on one supplier is one of the three legs of The Switzerland Structure, a key driver in your company’s value. To see how your company is performing on all eight factors acquirers consider, get your Value Builder Score now.
Check out the written by Colin Morgan on How To Get Your Biggest Customer To Acquire Your Business.
Curious about what your company might be worth? Start with a Built to Sell Valuation.
About Our Guest
Matt Schmeltz is a serial entrepreneur who co-founded Modern Business Technology, acquired by USWeb, Acquity Group, acquired by Accenture, and CloudCraze, acquired by Salesforce.