Episode Details

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Most agency owners say they want to sell someday… but they're building something completely unsellable. The mistake? Not only a lack of a clear vision for the future of their agency, but also a lack of understanding of what they'll need to build a sellable agency. If you're an agency owner planning to sell one day, do you understand what buyers are usually looking for? Do you know which type of buyer you're hoping to attract?

Today's featured guest understands that most agencies are acquired by private equity and built the private equity partner he felt was missing in the space. He'll talk about what actually drives valuation, what kills deals, and how to build an agency that buyers want to compete for.

Ben Gaddis is the former founder of T3, a digital agency he sold to private equity in 2019. After going through multiple acquisitions himself, he now runs an operator-led private equity firm focused exclusively on tech-enabled service and agency businesses.

As a former owner who's been on both sides of the table, he knows exactly what buyers are thinking.

In this episode, we'll discuss:

• What are private equity companies looking for in agencies?

• Recurring revenue vs. retention

• What would actually increase your agency's valuation?

• If the goal is talent, should you consider an acquisition?

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The reality is that most private equity companies are looking to buy a couple of agencies to slam them together and eventually sell them for more.

Based on this, agency owners have an idea of what these buyers want and mostly focus on revenue or EBITDA.

According to Ben, however, buyers are looking at a few core things first:

• Client concentration

• Recurring or predictable revenue

• Net revenue ret