Why we’re building Baton
March 13, 2023 ⋅ 4 min read
In my career, I have been a small part of several market transformations: the advertising market at Google, the music industry at Spotify, and the residential real estate market at Zillow. I have been lucky enough to work with amazing teams to empower millions of people with data and access - I’m excited to do that now in the small business space.
Anyone that has spent time in the SMB (small-to-medium-size businesses) acquisition space knows that the market is outdated. When I discovered the SMB acquisition space and met my co-founders - Dylan, Jamie, and Koda - the market was strikingly full of many of the same inefficiencies I’d seen addressed in the real estate market over the last ~30 years and Zillow helped solve. The issues?
What is my business worth after 1, 5, 10, or 40 years?
Am I doing everything I can to improve my business?
What’s the right time to sell your business?
Did I pick the right broker to help me sell my business?
Overall, the SMB acquisition market lacks data and trust. If you wanted to figure out how much your business is worth before Baton your best bet was to either pay hundreds, sometimes thousands of dollars for a valuation or go to a business broker. This is problematic because the information is gated and a broker may be motivated to give you a higher valuation just to lock you into an exclusive agreement, only to convince you to drop the price later.
The process of understanding the things you can do to improve your business and the partners needed to execute on these things has been kept behind a gate as well. All of this has resulted in small business owners not getting fairly compensated for their life’s work, and we're working hard to fix that.
Building a Trusted Solution
Trust and transparency need to be brought to the SMB acquisition space to create a more efficient and fair market for everyone. We are committed to exposing our business model, our valuation methods, and continuing to be transparent with all of our stakeholders.
If we can set information free, we will create a category-defining company that will change perspectives on small businesses, include more people in a path to financial freedom, and ultimately expand the size of the market. This all starts with free valuations and business assessments. So, how do we make money if the valuation is free?
When we connect businesses to our partners or potential buyers, we get paid by the partner when they sign the business as a new customer or the buyer completes the acquisition. Most owners we’ve talked to so far have needed a bookkeeper, marketing firm, lender, etc., but haven’t had the time to search and evaluate dozens and dozens of partners and feel confident that they picked the right one. We lower that hurdle by vetting our Partner Network for companies that are aligned with our mission and work as hard as we do to help SMBs succeed. We’ve already signed up over 100+ companies in the network, and we’re excited to continue to scale and add even more partners in the coming months.
We continue to get great validation of our Baton Valuations and Investability Assessments. We’ve seen buyers make cash offers to owners that have been through our process that are within less than 5% of our estimates. We’ve seen the owners use our assessment to make positive changes to their businesses. They have been able to connect with the right partners to address any shortcomings and/or accelerate their growth trajectory. We have also seen brokers and potential buyers start to use us as a third-party valuation service — we’re excited to be building that trust across all sides of the marketplace.
We are energized by giving free business valuations to even more small business owners so please sign up here, and find your valuation and unlock your potential!