August 18, 2021
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12 minute

Startup on the Prairies with Village Wellth: Simplifying Business Ownership

Ecosystem

Startup on the Prairies profiles emerging tech companies and their founders. We highlight startups that we’ve worked with to learn more about their entrepreneurial journey, market opportunity, and how they’re disrupting their industries with tech in the Canadian Prairies. 

Buying a business is complex. 

From the kind of industry you want to zero in on to the various stakeholders in the mix you need to negotiate with to secure deal flow – there’s no shortage of high-stakes decisions to make. 

Without a centralized platform or playbook to guide buyers through the windy business acquisition process, many buyers are left to their own devices and vulnerable to making costly mistakes. That is, until now.

We had the chance to sit down with Village Wellth’s CEO, Robert Irwin and President, Elizabeth MacRae, to uncover the gaps in the buyer’s journey and where the opportunities lie to innovate. 

Village Wellth is an on-demand digital platform that connects business owners looking to exit or retire with interested buyers to simplify their search and sale. Brewed during the COVID-19 pandemic, the band of four co-founders (including their CMO, Josh, and Director of Client Engagement, Gisele) came up with a solution to give buyers a voice in the marketplace while streamlining the experience. 

In this Harvest exclusive interview, Rob and Liz share how their technology brings much-needed innovation to help entrepreneurs seamlessly acquire profitable, turnkey businesses from existing business owners. 

Q: Tell me about your backgrounds and how you became entrepreneurs.

Rob: Before Liz and I met, I was in finance for several years and worked primarily with small business owners, helping them interpret their financial options and manage their exit strategy. 

What I found most interesting with these clients was that no matter the size of their company, they wanted to transition into the next phase of their life, extract wealth from the business they grew, and take care of their employees – all very basic human emotions.

Then I created MatchWorth, a small tech platform in the finance world, which provided an interactive space for investors and advisors to increase their matchability. As I was pivoting out of that project, I met Liz, whose background dovetailed nicely with mine.

We both share emotional, bumpy histories with our own business acquisition transactions. I bought a steel fabrication company many years ago–before I knew what I was doing–and then sold it, which had been successful up until that point. The transaction on the sales side was not structured properly, I didn’t have the right advice or tools, and I lost everything in the deal. 

I was forced to start over again after putting three years of my life into that project. All this happened before digital innovation came into the picture, and it was the impetus for recognizing how terrible and outdated the industry is. 

Buyers, especially, have little independent representation, no one working exclusively on their side so people end up floundering. Liz experienced a similar personal journey, so naturally, our paths crossed and we ended up in business together.

Liz: My husband and I wanted to get into business, and we ended up buying a Go Tire, mobile tire franchise. We were attracted by the service’s low overhead costs, the limited number of staff to run the business, and the ability to relocate from Alberta to be closer to our family in Atlantic Canada.

But not long after we purchased this franchise, we realized we had overestimated a number of financial factors and lacked the proper due diligence. We made many mistakes, learned valuable lessons, and I soon found my way into business brokering when I ultimately tried to sell the franchise – this opened up a whole new world for me, where I experienced many inefficiencies that I was eager to improve.

Rob and I connected on a buy-side engagement in the finance sector, and our conversations around building a better business acquisition industry kept evolving. We looked at where things were ebbing and flowing, how buyers were unguided in the process, and how we could create a positive buyer experience. We applied lessons and functionality from Rob’s previous tech platform and brought it to the business acquisition world. 

Eight months later, we teamed up with our co-founders, who are a combination of neighbours and industry colleagues, and formally decided to start Village Wellth, a buyer-first digital solution. 

“I didn’t have the right advice or tools, and I lost everything in the deal. I was forced to start over again after putting three years of my life into that project. All this happened before digital innovation came into the picture.” – Rob Irwin, CEO, Village Wellth

Q: What is the market opportunity like for acquiring businesses in Canada?

Rob: There’s a phrase floating around our industry called “the silver tsunami,” which means there is an influx of baby boomers retiring and wanting to sell their successful businesses. But the reality is: a lot of buyers are not prepared to acquire them. We have the opportunity to meet the needs of this burgeoning population. It’s essentially a buyer’s market in terms of size and opportunity.

Liz: This baby boomer wave is creating an ample supply of businesses available for purchase, but one of the issues–and opportunities–as a buyer is that it’s dominantly on you to source these businesses. Business acquisition is an underground industry. Unlike real estate, you won’t find business listings “publicly” advertised for sale. Confidentiality is critical for many of these sellers to maintain consistent day-to-day operations.

Similarly, there is no equivalent to a realtor who can connect buyers with all the necessary stakeholders and streamline the sales process. Instead, you need to create or tap into a network, spend time building relationships, and use a lot of legs and lungs to hit the streets, looking for businesses that are prepared to sell. It’s an incredibly complex and individual journey.

That’s why with Village Wellth, we invert the market. We’ve created a pool of buyers and make them accessible to the ecosystem, rather than having buyers blindly trying to find businesses for sale. The buyers are now the ones who are searchable.

“Business acquisition is an underground industry. Unlike real estate, you won’t find business listings “publicly” advertised for sale.” – Liz MacRae, President, Village Wellth

Q: What does the traditional process for a buyer look like when buying a business and what challenges do they face?

Liz: The more a buyer knows what they’re looking for, the better chances they have of finding it. However, a lot of buyers are agnostic – they’re interested in any number of industries and they’re really just looking for good companies. These are people who have experience and want to get into a business that’s making money to further grow it.

Because the average buyer’s search scope is so broad, they often spend a long time searching. According to Harvard Business Review’s “How to Buy a Small Business,” it can take anywhere from six months to two years! And that’s only the first step. Once they narrow down a suitable business and industry, buyers still need to review the business, make an offer, go through due diligence, and navigate financing. 

Not to mention, credibility plays a vital role in whether or not you get accepted to review a company. Sellers want to know that buyers are serious, motivated, and know what they’re doing. With Village Wellth, we’ve created a badge emblem that indicates our buyers have been digitally verified for proof of funds. We’ve also developed a streamlined search function that helps buyers filter companies based on their needs and interests. 

By digitally verifying the buyer and helping them narrow their search, Village Wellth provides buyers with an anonymized platform to host their profile and a channel they can communicate with a broker on. It fills this huge inefficiency gap between the broker and buyer, creates liquidity in the system, and increases the rate at which a buyer can acquire a company.

“We invert the market. We’ve created a pool of buyers and make them accessible to the ecosystem, rather than having buyers blindly trying to find businesses for sale” – Liz MacRae, President, Village Wellth

Q: Aside from search criteria and digital verification, what core features does Village Wellth offer to simplify business acquisition?

Liz: Many buyers are senior management of companies and very established people in their careers who want to buy a business, but have never done so before. We constantly get asked what the process of buying a business looks like, so we’ve developed a buyer journey map that paints a clear picture of how it works.

Rob: We host educational content, like webinars, research, and discussions with industry professionals, from accountants and lawyers to transaction advisors on behalf of our buyers. All these experts come together to educate buyers, provide them with expertise, and tactical tools and confidence to successfully acquire a business. 

We record these discussions, parse them out, and have created a video library of content that’s accessible to our buyers to help them understand the process, not just from our point of view, but from the eyes of professionals.

Another challenge that buyers face is understanding the complexities around financing a business. That’s why we’ve come out with our Affordability Calculator, which helps buyers understand what they can afford. Unlike buying a house, it’s not as simple as just taking out a mortgage and that’s that. 

With business acquisition, there is vendor take-back financing, earn-outs, traditional bank financing, multiple investors, goodwill lending, inventory financing and equipment lending – all these things have different financing rates, terms, and arrangements.

With our calculator, you can play around with different scenarios to provide an output or expectation of the value of a company you should be looking for, including the high-end and low-end ranges and the projected income you can generate. Using this feature helps buyers to dramatically narrow down their search and gives them a leg up on the competition.

Q: What’s your strategy for growing your buyer market?

Rob: We leverage valuable content to reach buyers. Whether it’s interviews and discussions or articles, many concepts around the buyer process aren’t typically being written or created for the buyer. We generate increased awareness this way and couple it with an aggressive legs and lungs approach of making direct connections in the industry. 

We are a resource aggregator and work with accountants, financial advisors, legal professionals, brokers, and more to bring them all into the picture, letting them know exactly what we do and give them reasons to join our platform. Ultimately, this can be a slower process, but it does build up awareness in an industry that’s quite resistant to change.

Liz: We re-educate this industry by flipping the process around. Instead of blindly looking for business opportunities, Village Wellth allows buyers to create a profile to launch their search, get representation, and then get found by the business community coming to them. We’re essentially creating a reverse marketplace by introducing the idea that buyers live at Village Wellth, but not just any buyers, qualified buyers.

Q: If you could leave first-time buyers with a single piece of advice, what would it be?

Rob: It all comes down to discovering what the buyer wants and being specific. What are their personal drivers? Financial mobility? What businesses are compatible with them? What experience do they have? And what are they willing to sacrifice? By creating this framework for a pre-search structure and being able to answer these questions, buyers can be leagues ahead of everyone else.

Liz: Buying a business is a really personal decision, so you need to know where you want to spend your time. Even if you want to be an absentee owner and be hands-off with the business, that kind of participation will dictate the size of your business, the industry, the role you’ll have, and the role of the exiting owner too. A big part of buying the right business is knowing what you enjoy doing and what you don’t.

Q: What has been the greatest challenge so far and how do you overcome it?

Rob: Changing the mindset of incumbents. Our industry is old and has yet to be innovated, but there are so many ways to make it smarter, faster, and better to support the buyer. The good news is there’s a new energy brewing with baby boomers looking to exit. Even though business acquisition is ripe for change, it doesn’t mean it won’t be an uphill battle.

We have to show this industry the benefits of technology simplifying the process, creating liquidity, and accelerating the buyer process so that sellers can get out of their assets quicker, cheaper, and more efficiently. 

It’s a matter of educating them, but as with any innovation, change takes time. The hardest part of all this is getting the industry to recognize us for what we are. 

And quite honestly, we are a threat to them, but only by design. We’re not looking to replace any player–in fact, we’re supportive of all parties–but the disruption that comes along with enhancing a system means that toes will get stepped on.

Liz: Business owners also experience a great deal of fear about going through this stage in their business lifecycle. To hand off your life’s work or legacy to someone else isn’t a light decision, and it’s part of why we’ve built Village Wellth the way we have. 

We show business owners that there are plenty of buyers who genuinely want to see their business succeed. By searching, filtering, and verifying suitable buyers, business owners can gain some semblance of peace knowing that new ownership can do right by the business they’ve worked so hard to build.

Q: What’s next for Village Wellth? 

Rob: We have lots of exciting new projects in the pipeline that vary in scope. On a much larger scale, a solution to our industry lies in something called fractional ownership. In the future, we plan to introduce the opportunity for buyers to purchase small pieces of local, private companies.

But in the short term, we’re focused on engaging buyers and will soon be launching a feature called one-click financial verification. This digital verification will allow us to pull the buyer’s bank account information with their permission and verify their funds. It is quick, secure, seamless, and literally completed with a click of a button.

“By searching, filtering, and verifying suitable buyers, business owners can gain some semblance of peace knowing that new ownership can do right by the business they’ve worked so hard to build.” – Liz MacRae, President, Village Wellth

Liz: Generally speaking, we want to remove all the barriers from the buyer in the system. Things like simplified access to lending and capital, and integrating AI for better matching and efficiency, and direct deal flow to the buyer are all things we’re already working on, but it’s just a matter of creating bigger, better, and faster versions of what we have now.

Learn more about Village Wellth, a buyer-first platform that simplifies business ownership.

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