Welcome to Upper Market

When Facebook bought WhatsApp in 2014 for around nineteen billion dollars, the messaging app had about fifty-five employees. Not fifty-five thousand. Fifty-five. A handful of engineers were serving close to half a billion users.

The business wasn't valuable because of how many people it employed. It was valuable because of how much each one, and the software behind them, could produce. Headcount was almost beside the point.

So when you size up a business, don't count the staff; measure the leverage. A tiny team, or no team at all, running the right system can be worth more than a floor full of people, and far less of a headache to own.

What's ahead in this Newsletter:

This week I spoke with three people who had deals lined up.

Theses ready - clear value proposition with pitch decks.

But no capital lined up.

These were people already in the acquisition space. Either by themselves or in an investment bank.

Can you see the problem?

If the business is the first half of the tools you need to close - then the capital sure as shit is the second half.

People talk about deal-flow, but what about investor flow?

I’ve realised it’s the missing step in the Acquisition Factory most people try build.

Let me give you the first step in building it.

Go to GoDaddy, and buy the closest domain that matches your name.

This is your future business card.

You’re going to build (with free tools and 20 minutes of your time) a website that at least tells the world that you exist.

Before you tell me that you have a LinkedIn, stop.

It’s boring, too formal and also doesn’t give you the flexibility to brand yourself adequately.

Why’s this so important in raising capital?

Simple - no presence online is going to start getting creepy. Particularly if you’re wanting to find investors.

We’ll keep it simple for this week, but next, I’ll run you through what you should put on it.

Note: Capital Raising Course is inbound.

$273,000 of EBITDA, gross margins above 90%, no employees, no premises, and a product that automates something every business has to do. Asking $860,000. A pure little software business of the kind that's almost all leverage, where the whole question is how sticky those subscribers really are, and who keeps the code alive.

This is a software-as-a-service business that automates a core finance function businesses rely on, earning recurring subscription revenue from loyal business customers who, the seller says, stay once they're on board. It runs with no staff and no premises, from anywhere, at software margins a physical business can't touch. The homework is the two things that make or break any SaaS purchase: the real churn behind "they stay," and who maintains and develops the product once the current owners leave.

The product automates a core finance function and is sold on recurring subscriptions to business subscribers, generating $273,000 of EBITDA on gross margins above 90%, with no employees and no premises so it can be run from anywhere. The owners describe the product, integrations and customer base as already in place and say customers stay once on board, and they're looking to hand over, with a full handover included, to a buyer with the resources to scale it. At $860,000 that's roughly 3.1 times EBITDA, which is modest for genuinely recurring, high-margin software, if the recurring part holds up.

What I'd Want to Understand:

First is the churn, because for SaaS it's everything. "Once customers are on board, they stay" is the entire thesis, so I'd want it proven in numbers rather than words: monthly and annual churn over several years, by customer and by dollar, how long the average subscriber lasts, and what the subscriber base looked like three years ago versus today. Software automating a core finance function should be deeply sticky, because ripping it out is painful, so I'd expect low churn and I'd want to see it, because low churn is what makes 90% margins compound and high churn is what quietly turns them into a treadmill.

Second is who keeps the software alive, given there are no employees. "No employees" is the attraction and the risk in one phrase: if nobody is on the team, the product is almost certainly maintained by an owner who is also the developer. So I'd need to know exactly who built it, who maintains and secures it now, how documented and transferable the codebase is, and what it would cost to hire the technical capability the business currently gets for free from its founder. For a non-technical buyer this is the whole deal; for a technical buyer it's the opportunity, but either way I'd confirm the product won't stall the day the current owner stops answering the phone.

Third is what it's built on, and what it plugs into. A finance-automation tool almost always integrates with other systems, accounting packages, banks, payment platforms, so I'd map those dependencies: if the product relies on a third party's API or sits on top of one accounting platform, then that platform's decisions, pricing or competing feature can affect the whole business. I'd also want the technology stack's health, whether it's modern and maintainable or ageing and fragile, because with software you're buying the engine, not just the subscriber list.

Fourth is why it hasn't scaled, and the customer concentration. The owners want a buyer "with the resources to scale it," which is honest, and also a flag: I'd want to know what's actually held growth back, a product that needs work, no sales effort, a niche smaller than it looks, or a founder who simply never pushed. And I'd check how concentrated the revenue is across subscribers, because a high-margin recurring business leaning on a few large accounts is far riskier than the same revenue spread across many small, sticky ones.

Growth Angle: The appeal is that the expensive, slow work is done, the product exists, the integrations work, and customers are paying and staying, so the opportunity is pure leverage: add subscribers to a product that costs almost nothing to serve the next one, and nearly all of that new revenue drops to the bottom line at 90%-plus margins. A buyer with a real sales and marketing engine, exactly the "resources to scale" the owners mention, could grow this far faster than two hands-off owners have, and the no-staff, run-from-anywhere model means scaling doesn't drag a mountain of cost behind it.

The Drawbacks: The entire value rests on recurring revenue that must be proven genuinely sticky, and on a product that, with no employees, almost certainly depends on the founder's technical knowledge, a real risk for a non-technical buyer. It's a single product in a single niche, potentially exposed to the platforms it integrates with and to a larger competitor, and the "needs someone to scale it" framing means the growth is promise, not proof. It's a lovely shape, but a lot of it has to be verified in the churn data and the codebase.

Final Thought: A recurring, 90%-plus-margin SaaS automating something every business needs, with no staff and no premises, at roughly 3x EBITDA, is close to the purest form of leverage you can buy, an income that scales without the weight. Whether it's worth $860,000 comes down to two confirmations: that the churn is genuinely low and the revenue truly recurs, and that the product can be maintained and grown without the founder's head. Prove the stickiness and secure the technical capability, and this is a superb, scalable asset at a fair price. Fail to, and you've bought a codebase you can't maintain and a subscriber list that was freer to leave than you thought.

If you want more details on any of these businesses or would like an introduction to the sellers, just reply to this email.

$1.2m of EBITDA after paying a full management team, thousands of installed units quietly pulling in service and consumables, an exclusive line to the overseas manufacturer, and a team of just three. Price on application. A thirty-year market leader built on the best kind of revenue: the kind that keeps coming after the sale is made.

This is the largest and longest-established specialist in its niche, a premium corner of the wellness industry, importing and distributing an international brand under an exclusive relationship with the manufacturer. The real engine is the installed base: thousands of units already out in the field carry the company's branding and phone number, so they generate ongoing consumables, servicing and upgrade work year after year. The homework is proving that recurring base is as good as it sounds, and that the exclusive supply is secure.

The business reports a FY2027 forecast EBITDA of $1,200,000 after full management costs, or $1,350,000 of owner-operator earnings for a working owner, with revenue up every year for five years. It runs on a lean team of three with installation handled by trusted subcontractors, holds a direct exclusive-supply relationship with the international manufacturer and its owner, and reports no customer concentration. The recurring revenue is structural: the installed units themselves drive consumables, service and upgrade demand, making the income far less dependent on winning the next new sale.

What I'd Want to Understand:

First is the split between the two earnings numbers, and that it's a forecast. The listing quotes both $1.2m EBITDA after management and $1.35m of owner-operator SDE, which is exactly the right way to present it, so I'd confirm which I'm buying: if I run it myself the ~$1.35m is my reality, and if I stay hands-off the ~$1.2m is the number, with a real manager's salary genuinely deducted. And since these are FY2027 forecasts, I'd anchor them to actual audited results: the "revenue up every year for five years" claim is the thing to verify in the accounts, not the projection.

Second is the quality of that recurring installed-base revenue, because it's the whole moat. Thousands of installed units generating consumables, service and upgrades is a razor-and-blades annuity, which is the best feature here, so I'd quantify it precisely: what share of revenue and profit is recurring aftermarket work versus new unit sales, how many active units are out there, what each generates a year, and how reliably owners come back to this business rather than a cheaper third party for consumables and service. The bigger and stickier that base, the more durable the earnings.

Third is the exclusive supply agreement. The exclusive relationship with the overseas manufacturer is both the moat and the single point of failure: the manufacturer could change terms, appoint another distributor, or sell direct. So I'd read that agreement closely, its term, its exclusivity, what happens on a change of ownership, and how personal it is to the current owner versus institutional to the business. An exclusive import line is wonderful right up until the person whose product it is decides to take the margin back.

Fourth is the lean team and the subcontractor dependency. Three people running a business with $1.2m of EBITDA is impressively efficient, but it also means each person matters, so I'd want to know exactly who does what, whether the owner is one of those three, and what transfers on a sale. Installation sits with subcontractors, so I'd confirm that's a reliable, replaceable arrangement rather than a dependence on one crew, and that the servicing capability, the thing that monetises the installed base, is secure and scalable.

Growth Angle: The structural beauty is the installed base: every unit sold today is an annuity that pays consumables and service for years, so growth compounds rather than resets, and a larger installed base makes the whole business more valuable and more defensible. A buyer could push harder on new-unit sales to grow the annuity, deepen the service and consumables attach rate on existing units, and lean on the exclusive brand in a wellness category the listing describes as fast-growing. With a lean cost base, incremental revenue should drop through at high margin.

The Drawbacks: The headline numbers are a forecast, so they need proving against real history, and the exclusive supply relationship means your fate partly rests on an overseas manufacturer you don't control. A three-person team is efficient but thin, and the premium-wellness demand that drives new installs can be discretionary and cyclical. The recurring revenue is the core of the thesis, so if the aftermarket turns out smaller or less sticky than implied, the whole valuation case softens.

Final Thought: A thirty-year market leader with real recurring revenue from a large installed base, an exclusive brand and $1.2m of genuinely managed EBITDA is close to the ideal shape of a business, earnings that keep arriving after the work is done. Whether it's worth its price comes down to proving the annuity: verify the recurring aftermarket revenue, confirm the exclusive supply is secure and transfers, and anchor the forecast to five years of actual accounts. Get those right and you're buying an income machine. Get them wrong and you're paying a premium for a sales business dressed as an annuity.

If you want more details on any of these businesses or would like an introduction to the sellers, just reply to this email.