To get acquired, remove yourself.

Kevin McArdle doesn't build products; he buys them. And his holding company is currently doing 8 figures.

I caught up with him to understand how he does it. He shared how indie hackers can make their products (and themselves) more attractive to buyers. 👇

Entrepreneurship through acquisition

James: What's your background?

Kevin: I started as a high school math teacher. Then I spent 15 years in corporate America at a large software company ($CERN), starting as an entry-level sales trainee and working my way up.

I got to do just about everything inside a software company other than write code.

James: What got you interested in entrepreneurship?

Kevin: Along the way, I went to business school (nights and weekends) and I read dozens of case studies about entrepreneurs who had built amazing businesses.

What struck me about most of the stories was that these were normal people who just had a bit more grit, risk tolerance, and an idea that they couldn't not pursue. I realized that this could be me if I could find the right idea.

James: And you found it?

Kevin: My first entrepreneurial venture was when I realized that I didn't need to create a business — great businesses are bought and sold all the time. These days people refer to it as "Entrepreneurship Through Acquisition", but I just raised a small amount of money and started buying internet-based businesses.

James: So you went right for it, no products to learn the ropes first.

Kevin: Yeah, I didn't have any direct startup experience, and that was probably the biggest risk — could I execute outside of a corporate environment?

James: So why did you go this route?

Kevin: I believed in myself. I believed in the idea. I was comfortable with the "risk" because I started buying profitable companies from the start, so there was lower financial risk.

James: And you learned as you went.

Kevin: I got all of my experience learning on the job. The first business I bought, I learned how to update Wordpress plug-ins, publish content and ship newsletters. I learned every aspect (except coding) from learning by doing. Fortunately for me, it worked out.

I did 45 acquisitions in 7 years across 3 funds. Then I started Big Band.

Launching Big Band

James: How's Big Band doing?

Kevin: We're at 8 figures of revenue already and growing fast, because we grow primarily through acquisition.

James: And what is it exactly?

Kevin: Big Band is a SaaS holding company. That means we aren't a PE fund. We don't have a timeline where we have to return capital to our investors, so we can buy a business with the intent to operate it forever. We do purely acquisitions (not investment).

James: So you operate the businesses that you acquire?

Kevin: We hire CEO's to operate each acquisition. So Big Band does operate, but we have a decentralized model where portfolio company CEOs are empowered to manage the day-to-day with our help.

James: How do you blow these companies up after acquisition?

Kevin: I wouldn't use the term 'blowing up'. It's a nice thought, but it sort of assumes that there is some silver bullet thing that we can do immediately to fix problems or grow substantially faster than what the founder was doing.

What we do is take our decades of experience in the software business and make gradual changes. Because we can hold businesses long-term, we don't need to force growth right away. We take a disciplined approach to operating, starting with "don't screw up what's working."

James: Just little tweaks, that's it?

Kevin: We may get more aggressive with sales and marketing than a founder. We may take more chances with new products or new markets. We may try to open new go-to-market channels. But it's all just the hard work of operating a company, done with discipline and intention.

Build relationships that push the needle

James: You mentioned funding. Where did you get it?

Kevin: Long-term relationship built over years with institutional investors.

We have very few investors. We use the term "business partners" because it is a holding company, not a "fund" with GP/LP relationships. Big checks with "forever" commitment.

James: Where did you first meet these contacts?

Kevin: Most of the best investors I've worked with started as 'normal' business relationships and/or friendships. I love getting to know people and I geek out on business, so I'll often just connect with people over a real or virtual coffee and "talk shop". If we hit it off and they express interest in learning more about investing, I'll follow up. But I almost never push that. If it's a fit, it will be obvious to both parties.

James: What's a good example?

Kevin: With ParkerGale (our lead investor), I had been listening to their podcast for a while and sent them an email just to tell them how much I enjoyed it and how valuable the content was for me as a new CEO trying to figure out how to run a business. That was in 2016. We struck up a friendship and stayed in touch.

It wasn't until 2022 that they invested in Big Band. I can't stress enough how much value I put on playing long-term games with long-term-thinking people.

James: I know a lot of indie hackers could benefit from building relationships and networks. Any tips?

Kevin: Reach out. Particularly for the "indie" crowd, there is a risk of isolation when there isn't a need or forcing function for you to get out of your own 'bubble' and talk with other strategic people.

Think about creating a forcing function for yourself. I know several indie hackers who write a monthly newsletter/update to mentors and advisors. Others will create their own masterminds.

James: Makes sense.

Kevin: But the advice I would focus on most is to just do it. If there is a person out in the world that you want to connect with, just send them a note. Be thoughtful. Don't ask for anything. Try not to waste their time. But you never know what relationship might start from just saying hello. The worst thing that can happen is that they ignore you. No big deal.

How to get acquired: Rule of 40

James: A lot of indie hackers are interested in getting acquired so let's dive into that. What do you look for in a company?

Kevin: For us, they have to be profitable. We want them in long-term sustainable industries/sectors. And we only buy from founders that we feel we can trust. Breaking trust in a process is a deal breaker.

James: How profitable?

Kevin: We like the "Rule of 40" which is growth rate % + margin %. If those numbers add up to 40, it's a pretty healthy business whether at one end of the spectrum (flat growth but 40% margins) or the other (40% growth and break even), or somewhere in the middle.

James: Anything else you're looking at?

Kevin: We look at a lot more. Great product, great team, happy customers, good reviews, good tech without a lot of technical debt, healthy P&L, low churn, and a founder who isn't too involved in the day-to-day running of the business so that we can more easily replace that person.

James: Do they need to be 10/10 across the board?

Kevin: Most businesses won't be "perfect" on each item, but we want most to be "good to great".

No business is perfect and we understand that. We just want to know that the 'imperfections' are either small or fixable, or both.

How to get acquired: Trust

James: You also mentioned trust.

Kevin: I don't know how common this is for other acquirers, but it is super important for Big Band. I've been burned in the past when I ignored an uneasy feeling about the founder I was dealing with.

Businesses take on the personalities of their founders, for better or worse. And there are too many great businesses out there to take a chance where there is a lack of trust.

James: Anything founders can do to foster trust?

Kevin: Be honest. Do what you say you are going to do. Live up to commitments. Don't try to sugarcoat your numbers or metrics just to disappoint when you share the real P&L or reports. If you know there is something scary about your business (for example a lingering lawsuit or a big customer who has threatened to leave), just disclose it.

No business is perfect, and we're very likely to find those things out during the diligence process. If you try to hide something and we find it, trust is lost. If you disclose something early, trust is earned. It isn't complicated.

How to get acquired: Remove yourself

James: How else can indie hackers make their products attractive to buyers?

Kevin: A lot depends upon the specifics of their product/market. But one thing that is generally universal is that the founder should remove themselves as much as possible from the day-to-day operations of the business.

If the founder is truly just managing a team that handles all of the day-to-day activity, it is easier to replace that person.

How to get acquired: Focus according to stage

James: Anything else?

Kevin: Focus on what's important at each stage of the process:

• Early = product market fit and getting to a point of survival

• Middle = building the team and processes to scale

• Later = extract yourself from the day-to-day of the business so it's easier for someone else to take over and focus your energy on learning the game of exits/acquisitions and positioning yourself in the best way for the right buyer for you and your business.

Where to get acquired

James: What is the best place to sell?

Kevin: You should reach out to companies like Big Band to get on their radars early. Building relationships isn't required, but it sure helps. I love tracking founders/businesses over time to get to know them before they are ready to sell.

It's also a great idea to build relationships with strategic acquirers in your space — this could be a competitor or partner.

James: What about platforms like Acquire.com?

Kevin: Acquire.com is great, and I was one of Andrew Gazdecki's first customers and investors when he launched. There is a challenge in standing out and being a signal in the noise because that platform is so popular.

I wouldn't rely on any one of these strategies. Do them all. The more people who are interested in your business, the more likely you are to get the best outcome for you (not just price, but all terms considered).

Exit planning

James: You're bullish on exit planning too, right?

Kevin: I believe that EVERY founder with a business over two years old should do Exit Planning ANNUALLY. It is not something that waits until someone is "ready" to sell their business. I know nobody else is thinking/talking about this because I was able to register www.annualexitplanning.com for $6.99.

I truly believe that Annual Exit Planning can unlock opportunity, reduce stress, and provide way better outcomes for almost any entrepreneur.

James: Why?

Kevin: Selling a business is the most important thing you will ever do in your professional life. Why would that not deserve the same (or more) focus as annual strategic planning?

Educate yourself on the process and make progress toward that important end every year until you do ultimately sell.

James And you don't feel that it's time spent prematurely?

Kevin: Conventional wisdom says that you should start thinking about selling well before you want to sell...maybe two years in advance. But that advice assumes you will know exactly when you want to sell and can therefore back up two years from that time.

I think that's dumb. Life takes turns. Things change. Start now. Repeat often. You'll be more ready to sell when you decide it is time.

James: Fair enough.

Kevin: This is also a good time to remind people that a good business to sell is also a good business to own...so doing a little prep and education will only benefit you as a founder.

Here's a workbook you can use to get started.

Bad advice: Hustle

James: Okay, so you've found a high degree of success. What advice do you wish you had ignored along the way?

Kevin: The idea that founders have to put their business above everything else and 'sacrifice' to make it successful — I think that's bullshit.

James: How so?

Kevin: Life (our families, our health, our happiness) is way more important than any work we could ever do, whether you are a brain surgeon, the leader of a country, or a SaaS Founder.

My biggest highlights and rewarding moments are celebrating "life" success with my teams (marriage, babies, health goals achieved, etc.). They aren't in celebrating the next MRR goal achieved.

James: I take it you've done the whole "hustle culture" thing?

Kevin There have been a lot of times when I felt like I was killing myself for my work. I would get burnt out and have to go through cycles of unproductivity, both mentally and physically, to recover.

James: How did you break the pattern?

Kevin: I realized two things that helped me make the change:

1. As much as I felt like I was "hustling" I wasn't really doing the right thing, which is being the best version of myself every day to do what was most important that day.

2. If I want to run a business long-term, I need to find a sustainable way to do so. And what I was doing was not sustainable.

One of my friends and indie hacking legend, Natalie Nagele, gave a talk about this entire concept at a software conference. She described her business (Wildbit) as a monster that was controlling her life. She realized that the monster (like all monsters in our lives) wasn't real and she was in control of what needed to happen and the pace at which it needed to happen.

She closed this amazing talk with a message directly to the Founders in the room. She said, "Protect the asset...and the asset is YOU."

Bad advice: Your idea needs to change the world

James: Well said. Anything else to ignore?

Kevin: If you aren't out to "change the world" your idea isn't ambitious enough — also TOTAL bullshit.

Most ideas DO NOT change the world, so I hate that this is some standard that someone decided to set for startups. Jobs, Gates, Ford, Eddison, Bell... the list is not that long of people/businesses who ACTUALLY changed the world, so let's chill out on that.

Most indie hackers probably have some simple goals in mind. Financial independence, personal independence, and doing something that makes them happy. That's it! If your business idea can achieve those things, that is a good idea.

James: Like you said about relationship building — just get started. Okay, any parting words?

Kevin: In 100 years we'll all be dust and 99.99% of people won't be remembered at all for anything they do or achieve professionally. So stop taking yourself so seriously.

James: Nice. Where can people find you?

Kevin: You can find me on X or LinkedIn. Or check out Big Band.

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