Decoding Community Part 3: Selling a Community with Max Altschuler

This week we’re continuing our Decoding Community Series with Max Altschuler.

This is Part 3 of 4.

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Anyway, let’s get right into it.


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Selling a Community (Part 3 of 4)


Max Altschuler, GP and Founder at GTMfund:

So far we’ve talked about Starting and Scaling Communities, but let’s fast-forward now to the end of the novel. What happens when you’re ready to sell?

Selling a community can either be really easy or really hard. In some cases, they come to you and know what they want. In other cases, you need to build relationships over a long period of time. The good news is that it’s usually your best sponsors that become your most interested buyers. They just need to decide it’s worth more to own the community than to keep sponsoring its programming.

If you aren’t lucky enough to have someone approaching you with a big offer or just want to make sure you have multiple bidders when you’re ready, you need to start strategically building the right relationships. The first thing you need to do is create a way to keep track of them. 

In my case, I had a simple CRM I created in a Google Spreadsheet. My columns were – 

  • Company

  • Key Point of Contact

  • Relationship Strength

  • Email

  • Last Contact Date

  • Interest Level

  • Next Steps

I kept that spreadsheet up to date at all times. I also had it broken into a few categories that suited my type of buyers. My categories were – 

  • Consultancies and Corporate Training Programs 

  • Software Companies

  • Research and Advisory Firms

  • Private Equity Firms

With this, I always knew who our most interested partners were and how to nurture those relationships. 

The next most important step is to position your business for selling. You need to ask these folks what they want to see – i.e. what is most important to them in the asset they are acquiring? 

Are they buying you for the audience? If so, what does that need to look like across Industries, Segments, Titles, Software Used, or other types or technographic or firmographic data? 

Are they buying you for your profits? Is what they sell or upsell in line with what you are doing? If not, do you even want it to be? Or is it even possible for it to be? Maybe for some buyers, the answer is yes, but for others, the answer is no and you just decide it’s not a fit.

Ok, so you have some interest. Picking a good partner is almost more important than the deal price for a few reasons. 

1) Because the terms are just as important as the purchase price.

2) You may have to work for the acquirer for an extended period of time. Sometimes 2+ years. 

3) Your legacy is on the line! That’s never worth sacrificing for. You really need to like the acquirer, the brand they’ve cultivated, and how you grok with leadership. 

Make sure to ask questions. What are they planning to do with it and you after they acquire the company? Are you two in agreement and aligned with the plans for the business and your role in it? 

In my acquisition, I made sure we had two things clear.

  1. We would always have a hard wall between the community and the acquiring companies’ pipeline initiatives.

  2. We wouldn’t touch the branding until at least after year 1.

  3. We get to keep what we kill. Meaning the company could run inside the SaaS business at breakeven. If we made more money, it would be reinvested into the acquired Media asset, not into the SaaS business.

It’s almost 5 years later and they still kept their word on these things.

The last piece, and maybe most important is…Price! 

Depending on who you sell to, you’ll be priced on either Market Rate or Run Rate.

I’m a bigger fan of Market Rate because you’ll usually get more money. Run Rate is more in line with someone like a private equity firm buying you for cash flow. 

Market rate is when a company really actually needs you and you have multiple suitors so you can call your shot on price. Market rate is also what usually happens in the earlier stages of a business where revenue is not at a repeatable point yet and it’s harder to agree on a revenue multiple to assign to the purchase price. Getting to a multiple based on EBITDA is what happens at the later stages of a business when numbers are fairly predictable. The number one way to get the price up is to always have more than one buyer at all times.

Price and terms are two different things. A high price is great, but make sure the terms make sense with your goals. Don’t let payment periods or a percent of your purchase price be tied to unreasonable or unmanageable metrics or an unrealistic tenure at the new company. 

Good luck! Next week we have a bonus part 4 of this community series.

Stay tuned.


👀 More for your eyeballs

I mean Sam may be a little bias here but still an interesting read on Altman’s optimistic view on AI – a good way to balance some of the more gloom/doom takes out there.


👂 More for your eardrums

This week I sat down with one of my favorite humans, Sam Jacobs – CEO of Pavillion. We talk through pre-negotiating your severance pay and equity when joining a company, adjusting comp plans and aligning contributor goals to company goals and pivoting away from the zero interest rate era.


🚀 Start-ups to watch: 

If you haven’t been following the team at Crossbeam or you aren’t using their platform yet – you should be. They are throwing their Supernode conference for ecosystem-led companies in June in sunny San Diego. Check it out.


🔥Hottest GTM job of the week: 

Account Executive at Northbeam, more details here.

Check out more of our top GTM jobs here 👊


That’s all she (he) wrote.

Enjoy your long weekend.

Barker✌️

Thanks for reading The GTM Newsletter! Subscribe for free to receive new posts and support my work.

Before helping found GTMfund, Scott spent 4 years at Outreach as Director of Strategic Engagement. He was in charge of aligning key relationships with VCs, BoDs, ecosystem partners and community members to drive revenue and strategic initiatives across Outreach. Scott initially ran revenue/partnerships for Sales Hacker (which was acquired by Outreach in 2018). Prior to Sales Hacker, he led and built outbound Business Development teams at Payfirma and MediaValet. Scott also advises for a number of high growth start-ups and is the host/author of The GTM Podcast and The GTM Newsletter. At GTMfund, Scott leads all fundraising efforts and runs the media arm of the firm. He’s also responsible for assessing investments, team management, LP/community relationships and GTM support for founders.

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