I’m joined here with Praveen Chidaboyina, a long time Flippa user who recently started his own brokerage. He’s now a partnered broker on Flippa and eager to help others sell their domains! Check out our interview below.
What’s your background and how did you get started on Flippa?
I used to do a full-time job as a web developer and have 5+ years of technology experience. Fortunately, I got/ created many opportunities and played different roles like Senior Web Developer, Team Lead, and Offshore Delivery Lead during my 5 years in the corporate world. I had experience working with top-notch clients like Pfizer, Mercer, Merkle, Avanade, DigitnityHealth, RideUTA (Utah Transit Portal), Presto (Canadian Govt Transit Website) and many more.
I used to work more than 10 hours daily during my day, then I started looking for other income and tried freelancing, t-shirt designing and few. One day, I read about domaining on local newspaper and started a hand-registering bunch of crap domains but had no luck in first one year. By the second year, my balance sheet was in green.
I was searching for online auction houses and found Flippa on search engines. I had great success with Flippa and sold most of the domains to end-users.
You have been a user on Flippa for 4 years. How has Flippa changed during that time?
Flippa Escrow and Flippa support improved a lot. Flippa Escrow is one of the fastest Escrow in the current market. QQio.com domain transaction completed within 30 minutes.
Amber (one of Flippa’s broker managers) has helped a lot by promoting qualified listings and it has worked well for me.
You have completed over $100,000 in transactions over the past year alone. Can you tell us about that experience?
I have changed my strategy in mid-2017 since I have enough budget and started purchasing expired domains/ domains from other marketplaces
Purchased Renew.al on Namepros for $40 USD then sold it for $305 USD on Flippa and purchased Confirm.co for $284 USD and flipped it for $1051 USD within 45 days. It goes on. Below were few sales (quick flips)
- I have flipped VegX.com within 25 days for 3,850 USD and acquired for $400 USD.
- Sold VapingSupplies.com for $5,000 USD within 45 days and acquired it for $500 USD.
- I have also flipped Leaking.com within 43 days. Sold for 7,827 USD and acquired price for1,644 USD
- Sold DispatchSoftware.com for $6,000 USD. Acquired it for $500 USD
- Flipped VRIO.com for $8500 USD. Acquired it for $811 USD
I have listed “Call To Action” domains on Flippa and outbound to end users (my most of the Flippa sales went to end users like Leaking.com, vrio.com, dispatchsoftware.com, vapingsupplies.com, riversiderealty.com, redbrain.com).
The uniqueness of Flippa is to provide a “sales pitch” area so that you can write a nice sale pitch and explain how the domain can be used. And also it shows feedback from previous listings which has helped me to sell more domains, unlike other marketplaces.
You also joined our brokerage program just about a month ago. Have things improved for you since then, and if so, how?
I was getting many requests to do brokerage so I started a brokerage. So far it’s been good and I’ve brokered domains like Purify.net, Antibiotic.net on Flippa successfully. I have also listed uMad.com, and plan to list more domains soon.
What makes you different from other brokerages and does your brokerage specialize in any specific type of online assets?
We have a specialized team and do outbound outreach as well. We will contact well-qualified leads only. We are looking for single word .com/.net/.org/.io or liquid(3 letter .com’s) domains for brokerage. I have sold most of the domains to same buyer(s) and have a good client base who are actively looking for bulk deals. Anyone looking for our service will contact me at [email protected] or message on Flippa.
For people out there who are interested in selling their online businesses, what advice would you give them?
Opportunities are everywhere and you need to study the marketplace and analyze the sales from the specific marketplace and list the similar domains/online businesses and make a reasonable reserve to encourage the bidding.
Praveen is a founder of BuyBrandweb.com and also a crypto investor. Praveen is passionate about technology and specialized in networking. You’re welcome to schedule a call at BuyBrandWeb.com or connect with him directly on LinkedIn or follow on Twitter.
I’m here with Jamie Toyne, CEO of Dealflow Brokerage, a premium end-to-end M&A Advisory firm which helps entrepreneurs buy and sell high-value web companies. In the five years since it launched, Dealflow has facilitated more than $43 million in sales.
Jamie joined forces with Flippa at the end of 2013 to create Dealflow. In April 2017, Dealflow established itself as an independent firm, separate from Flippa, though both companies continue to work closely together to facilitate high-value acquisitions.
Let’s start with your career background, what sort of work did you do before getting into website brokerage?
I spent my time consulting large retail brands on their eCommerce and digital marketing strategy, as well as helping an IT company launch a new energy monitoring technology. Before becoming a keyboard warrior, I made a living playing and coaching tennis.
Tell me how Dealflow began at Flippa and how the company has evolved over time?
Back in 2010, Flippa was a 100% DIY marketplace, and many people called it the wild west, because anyone could create an account and claim to own a web property with minimal verification. Some of the successful website flippers elected themselves as brokers and helped the less experienced users buy and sell on Flippa’s platform. In those days, anyone could claim to be a broker and it was difficult to regulate and ensure users were protected on the marketplace.
So, the founders of Flippa decided to create a premium brokerage service called Dealflow to ensure their users had a safe and secure option – and that’s when I came onboard.
Dealflow grew very quickly. Within 6 months we had completed $3 million in sales and were recognized as a leading brokerage in the emerging digital acquisitions space. The following month I moved from Flippa’s headquarters in Melbourne to establish a new office in San Francisco, where we built out the team we have today.
When we first started out, the average transaction size was in the mid to high 5-figure range. That number has more than doubled in size each year since. Larger acquisitions in the 7 and 8 figure range generally require a lot more support, so our services have expanded to keep up with the company’s growth. In addition to our M&A advisory services, we now offer buyer prospecting and exit planning advisory services too.
It’s been a little over a year since Dealflow became an independent company separate from Flippa. What has changed, and are how are you finding it?
It’s been fun! The transition has been seamless, which is largely thanks to Flippa. The most noticeable difference is how quickly our team has been able execute on projects in our pipeline.
At Flippa, we had to consider the broader mission and share resources with other departments. Now we are one solid unit with 100% focus on educating and advising clients on how to maximize their exits and how to find the best acquisition opportunities.
Dealflow used to be a tab on Flippa’s header bar, so launching our new website was exciting because we were able to tailor all the content towards what we are passionate about and what we specialize in.
The new Dealflow platform includes a lot of features that have been on the wish list for some time, including security enhancements and powerful data-matching capabilities that allow us to source better opportunities for our clients. Additionally, launching our exit planning service has been especially exciting as it gives us the opportunity to be part of the bigger picture of what our clients are trying to achieve.
Dealflow seems to be going from strength to strength, which is largely thanks to the incredible team we’ve put together over the years.
How would you describe your team, and where are you located?
Well, we’re an eclectic bunch that comes from different professional backgrounds ranging from investment banking, financial accounting, legal advisory, real estate, corporate consulting, and surprise, surprise – buying and selling web-based businesses!
I’d say we are all obsessed with web entrepreneurship. We get so inspired and invested in the journey of our clients, which makes the work fun and fulfilling.
We are still technically headquartered in San Francisco, California. However, we all travel a lot. I have spent a lot of time this year in Mexico, building our data, development and support teams. The rest of the leadership team live and work from their respective home offices, but often work in San Francisco and Mexico City for weeks or months at a time.
Just as we help our clients to achieve the lifestyle they want, we support each other to do the same. Many of my friends who own companies are shifting from a 9 to 5 physical office environment to more flexible setups which empower their team to obtain the life they want whilst kicking ass at their jobs. The setup we have works well for us because some enjoy the comradery of a physical office environment while others feel more productive working from their home office.
What makes you different from other brokerages that specialize in web-based acquisitions?
First and foremost, security. We are the only firm in the industry requiring buyers to complete ID Verification before they can access our listings. This security measure ensures the companies we list aren’t accessed by anonymous individuals with unknown motives. While NDA’s are a basic layer of protection, they are effectively unenforceable if any Tom, Dick and Harry can sign one without verifying their identity.
Another thing which sets us apart from other firms is our outbound prospecting efforts. Most brokers rely on inbound leads because outbound prospecting is hard work and requires a lot of resources. However, we have achieved higher multiples for our clients by tracking down buyers who have a strategic interest in acquiring the businesses we represent.
I think our exit planning services say a lot about us too. A lot of brokers are focused on closing a deal today and aren’t willing to forgo a commission to provide clients with the information they need to understand their options and make an informed decision. We take the time to understand the bigger picture of what our clients are trying to achieve and often encourage them to continue working in the business to secure a better exit in the future. Even when a client is in a hurry to move on from their current venture, there are often a handful of things which can be done in a short period of time to increase the value of a business substantially.
Where is this industry headed and what will it look like in 10 years from now?
Well, it will be a lot bigger, with better regulation and more accessible educational resources.
It will continue to grow because more and more people make a living through web-based businesses. Although we’re experiencing rapid growth, the reason it hasn’t really blown up yet is because of the lack of regulation, information and subsequently, trust.
This industry is still very young, so regulation will increase and tighten as it matures. The current landscape includes differing financial accounting methods, automated valuation tools spitting out horribly inaccurate figures, dozens of unqualified individuals operating as brokers, and a lot of misinformation. Until these issues are addressed in our industry, a lot of people will continue to play it safe with full-time jobs and traditional investments in property and the stock market.
Solid educational content is starting to surface, which is helping to raise awareness and build trust and confidence for beginners looking to get their feet wet. We are investing a lot of resources into education right now because we see this as the biggest driver of industry growth. Looking forward, I hope there are less barriers to getting involved in this exciting industry so that more people can have the opportunity to acquire, grow and sell web-based businesses.
During your time at Flippa and Dealflow, what is the most rewarding deal you’ve been a part of?
It was a $1.3 million SaaS business which had a suite of cool productivity tools.
The owners had listed the business with another broker but hadn’t been able to garner any serious interest for over six months. Meanwhile, they were unable to get out of a twelve-month exclusivity contract they had signed with this broker and the broker was pressuring them to drop the listing price by more than 30%. Unfortunately, it is common for seedy brokers to over-quote clients to secure an exclusive brokerage agreement with the intention of pressuring the client to take a lower price after a few months of stagnant progress.
In this case, we couldn’t help the client exit for six more months, so they asked us if we could help them with exit planning. The minimum price they were prepared to sell for was $1,200,000 USD. After analyzing their business, we valued their business at $824,000 and provided them with a list of key initiatives they could implement to increase the value of their business and achieve an exit of $1,200,000 or higher. We agreed on a timeline of twelve months, and at the beginning of each month, we would meet over the phone to discuss progress and make any necessary tweaks to the list of executables and targets.
Twelve months later the deal was available for sale on Dealflow and within seven weeks we had a cash offer for the full asking price of $1,300,000!
This really motivated the team to formalize our exit planning services, which has already produced some incredible success stories like this one.
What do you find the most valuable part of Flippa?
Flippa’s platform allows us to list and manage all of the businesses we are currently representing for sale. The platform itself is easy to use and has some great benefits including a free escrow service, which saves our clients a considerable amount of money on escrow fees. Its large userbase also means we are always receiving a steady stream of inbound inquiries.
The added exposure we get from Flippa not only helps us secure more interest in the properties we are representing for sale, it also helps introduce new buyers and sellers to our services. Many Flippa users have contacted us after being thrilled to learn that Dealflow provides a white-glove approach which focuses exclusively on facilitating the sale of fully-vetted six to eight-figure online businesses. I think we have come to provide an important role in the Flippa marketplace, and this helping to fuel our growth.
All in all, we hope Flippa continues to play a part in the growth of Dealflow, so that we can help more web entrepreneurs acquire and exit their online businesses in 2018 and beyond.
Have a question for Jamie? Drop a comment below!