He Sold at $3M ARR and Got a 10X+ Exit to a PE Buyer – Eran Galperin

Key takeaways

1. Galperin says churn caps growth: sooner or later it grows to match your absolute growth numbers, and under 1% a month is what earned Gymdesk a premium.
2. He couldn't acquire customers for four years, so he took a CTO job and built Gymdesk on nights and weekends, which let the product mature slowly.
3. Gymdesk's growth came from organic SEO, which still drives over half of new leads, and over 40% of free trials converted without a demo.
4. The buyer paid for three years of more than doubling, profit margins over 50%, and a payments business that grows as volume grows.
5. Valuations vary widely by buyer: one expert said 5X was his cap, while Five Elms paid 10X. A $60K legal bill and a good M&A broker helped close the information gap with private equity.