2024.01.05 - Online Biz Acquisition Opps

Hey hey peeps, here’s what we got today!

Just one. In fact I am planning to change the format going forward to 1 business per send out, and expanded ‘Corey’s Take’ section.

Virtual Medallion Signature Business

SDE $466,000 - Asking $1,250,000 - 2.7x

This 8-year-old SaaS business provides a fully digital solution for Medallion Signature Guarantees, a critical service for transferring securities. Traditionally, obtaining a Medallion Signature required an in-person visit to a financial institution, many of which no longer offer the service. This innovative platform allows shareholders to complete compliance reviews, verify their identity, and secure a Medallion Signature Guarantee from the comfort of their own homes.

The business operates with minimal overhead, requiring only two employees, and generates $943K in annual revenue with $466K in SDE. With high profit margins, streamlined operations, and a relocatable model, the business is positioned for growth in the rapidly expanding digital signature market. The global digital signature market, valued at $6.74 billion in 2023, is projected to grow to $28.33 billion by 2028 at a compound annual growth rate (CAGR) of 33.6%.

Despite limited marketing efforts to date, the business has established strong partnerships with financial institutions and built a secure, fraud-resistant platform that has earned a trusted reputation. The current owner is selling to focus on other ventures and offers comprehensive support during the transition.

Corey’s Take:
This business is solving a major pain point with its digital Medallion Signature solution. Having personally dealt with the inconvenience of traveling long distances (2 hours to another city) to obtain a Medallion Signature, I can attest to the value of this service. It’s comparable to title insurance for a home—necessary for high-value transactions where cost is secondary to convenience and security. The ability to provide this service digitally adds a layer of convenience that will resonate strongly with consumers, many of whom are likely unaware that a digital option even exists.

Operationally, this business is a model of efficiency. Generating nearly $500K in revenue per employee is impressive, particularly for a digital service business, and highlights the scalability of the model. The lean structure, high margins, and minimal overhead make this an appealing acquisition for an investor seeking a digital service business with strong fundamentals.

The valuation at 2.7x SDE ($1.25M) is exceptionally attractive, to the point where it feels underpriced. Entering this niche would be nearly impossible without significant expertise, and this business offers not just a foothold but a well-established position in the market.

In terms of growth, partnerships with financial institutions could be beneficial, though not essential. Many consumers rely on recommendations from their financial institutions, so aligning with them could drive growth. However, I see the real opportunity in educating the broader market about this service and its benefits. Paid advertising, and outreach campaigns emphasizing the convenience, security, and necessity of this offering could unlock significant revenue growth.

As for risks, compliance and regulation should always be assessed with legal counsel, but the business’s long-standing operation and the broader acceptance of digital tools in the legal space suggest these risks are manageable.

Overall, this is a standout opportunity to acquire a scalable, high-margin SaaS business in a niche that offers defensibility, growing demand, and significant upside potential.

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