My Guest
Peter Lehrman is the Founder and CEO of Axial, North America’s #1 online platform connecting buyers and sellers of small and medium sized businesses. Axial is used by over 20,000 investors, M&A advisors and CEOs, allowing them to connect on a confidential basis to explore potential M&A, debt, buyout, and growth equity transactions, to name just a few. Over 10,000 transactions are posted each year on axial, covering companies that generate anywhere between $2.5M – $250M in revenue.
Prior to Axial, Peter worked in private equity at SFW Capital Partners and was part of the founding team at Gerson Lehrman Group (“GLG”, for short), a platform where investors and other users are able to connect on-demand with experts spanning a countless number of industries and disciplines.
Peter earned his undergraduate degree from the University of Virginia and received his MBA from Stanford Business School.
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Peter Lehrman, Founder & CEO of Axial, The Largest Online Marketplace to Buy & Sell SMBs – In The Trenches
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Questions Asked
Founding Axial
- Walk us through the arc of your career and what led you to what you’re doing today
- What does Axial do?
- What was it about the product, market, or nature of the problem that compelled you to take such a big professional bet in leaving GLG and starting Axial?
Axial’s Pricing Model
- Why did you initially choose a subscription revenue model, and why have you since changed it to the current percentage of total transaction pricing model?
- What was it like for you personally to make such a fundamental change to your business? What was the self talk? What was going through your mind? What were you scared of? What were you excited about?
- How did your Board and investors react to the idea of moving off of subscription revenue, which is typically viewed as a “holy grail” type of revenue model?
Building & Scaling Axial
- To what extent have you grown axial through M&A (or have you at least considered doing so)?
- Have you ever felt as if Axial has, in a way, become a victim of its own success, with so many buyers on the platform pushing up competition and thus pricing?
The Current State of Lower Middle Market M&A
- To what extent are mid-market private equity firms actually going down-market and looking at smaller businesses that would otherwise be targeted mostly by acquisition entrepreneurs?
- Is the lower middle market as inefficient as it was, say. two years ago? Five years ago? Even 10 years ago? Why or why not?
- How does a buyer differentiate herself in the eyes of a broker or intermediary, who often find themselves drowning in potential buyers that sound similar very to each other?
Conclusion
- If you had to buy a single business, and put all of your professional eggs into that single basket, what type of business would you want to buy? Why?
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