Ep 568 Walked Away From $38M, Sold to Fiverr for $91M

Colin Morgan (0:01)

Hi there, and welcome back to another edition of Built to Sell Radio, the podcast designed to help you punch above your weight in a negotiation to sell your company. I'm the executive producer Colin Morgan.

Now, what do you hope an acquired does with your company after they buy it? If you're like most founders, you wanna see your business and your people thrive after you're gone, which is why our next guest turned down $38 million for a company he started with nothing. Lior Pozin Bootstrapped AutoDS, a dropshipping automation company to more than $20 million in annual recurring revenue without a dollar of outside money. A PE firm offered him $38 million. Five months of negotiation, lawyers engaged one day to signing and he walked. Every question they'd ask was about who to cut, where to trim, and when he asked to be paid more for beating their growth targets, they balked.

That told him what kind of owner they'd be for the people who had taken a chance on him early.

Two years later, he sold the Fiverr for roughly $55 million in cash plus $36 million in an earn out. After running a full auction with multiple bidders and choosing a buyer he trusted over a higher number. And in this episode, you'll hear how Lior read the buyer's real intentions, how he used competing offers to decide whether he even wanted to sell, and how an earn out tied to revenue and EBITDA changed the way he ran the business. Without further ado, here is Lior Pozin. Enjoy.

John Warrillow (1:37)

Lior Pozin, welcome to Built to Sell Radio.

Lior Pozin (1:39)

Thanks for having me.

John Warrillow (1:40)

Yeah, no, for sure. I'm excited to have this conversation because you've built a really pretty incredible company, AutoDS. Describe this kind of origin story.

How did you get into this business?

Lior Pozin (1:50)

Well, so I started 17 years ago as a dropshipper. Basically, I was looking to buy a cell phone online. And I saw the same cell phone on a website for much cheaper price than what I saw on eBay. And I just tried to copy that product from one website to the other website.

And it worked. Within three hours, I got my first sale as e-commerce entrepreneur. Basically, after seven years of me running the dropshipping business and some other e-commerce businesses, I started AutoDS as a software to manage my own dropshipping business. I decided to scale from one store to a hundred stores. We can talk about that more later about why I did it. But that was the plan, just to scale from one to a hundred stores. I understood that I cannot really manage it manually.

I decided to create a software. It was back then just a black screen that was managing all my stores completely automatically. That's how I started.

John Warrillow (3:01)

You had these eBay stores that you would buy and sell things online, and you were struggling to get a handle on all of these different e-commerce stores. So what did the software actually do?

Was it capturing revenue numbers or what did the software offer?

Lior Pozin (3:21)

So the whole idea was basically to automate my e-commerce business. Now, I'm coming from a developer background, and it didn't make sense to me that I need to find products manually, what to sell, then I need to keep up with price and stock changes from the suppliers. If the supplier goes to out of stock, for example, I had to find about it and then update the products and put them also as out of stock.

Let's say the supplier changed the price and I'm asleep, and then someone is buying from me a product and I'm selling it at loss. So the goal of the software was one, to find what to sell for me, second, to keep up with price and stock changes from the suppliers, and third, to automate my orders. So when the order comes, within a few minutes, it's automatically or already shipped to our users, to my, basically to my buy-outs. Got it. The whole goal.

John Warrillow (4:18)

And I don't really know the drop shipping game very well. My understanding is that you're not manufacturing the product.

You're identifying a product that a supplier offers and effectively reselling it to consumers on a platform like an eBay or an Amazon. You're a middle man of sorts, and you're making a margin in that transaction. Is that right?

Lior Pozin (4:45)

Yes. So drop shipping meaning you're basically doing an arbitrage between the supplier and the buyer.

Back then, I did drop shipping from Amazon to eBay. So basically, what the software did, it went to Amazon to movers and shakers. It was looking for what's trending right now, and then it was automatically uploading it to eBay. Adding a markup around 30% profit, and that's it. So basically, you never see the products, and you're just a middleman.