“Spray-and-pray” isn’t enough to surface quality opportunities — or secure wins. In this webinar, Guy Mitchell and Octavian Manoli from Synacti and Alex Prokofjev from RollUpEurope joined Sourcescrub VP Tristan Alden to talk about how they created an automated and effective sourcing machine that would build trust with prospects early and make every touchpoint matter.
Guy and Octavian broke down their experience as a new firm, sharing the importance of not wasting time slowly wading into the market; they were set on making a splash. “We wanted to start full steam, and we wanted to make sure that we were talking with the right people in the market,” revealed Octavian. He went on to explain the importance of having a connected tech stack and detailed the platforms they invested in to help them meet their goals. “That's why we selected Sourcescrub. We [also] have a CRM system and a system that allows us to do the outreach. We invested a little bit of time and money into connecting all three systems.” It’s a strategy that fills their pipeline with opportunities and ultimately delivered their first win.
Having the right data and technology is only half of the battle. Octavian shared the approach he takes to building rapport with prospects in the beginning stages and recalled the difference it made in that first deal for Synacti, saying, “Usually, during the first call, I have questions, but not about the numbers. For me, it was important to understand why... [this] allowed us to build trust and a relationship with them. Only during the second call did we start to speak about numbers. This is how we ended up having a good relationship over email.”
Alex credited Synacti for the way they attacked the market and their ability to continue making strides without trying to “reinvent the wheel.” He cautioned firms against making that mistake, asking, “Are you manually scraping databases? Surely, you're not just going into some weird industry forums and scraping them one by one because it's not efficient, right?” He added, “Don't start with the manual processes. Don't try to skimp on the cost. Do something that's efficient. Put the investment on day one. Otherwise, you will end up going very, very slow.”
There’s a competitive edge firms can still gain, and new firms like Synacti are proving it’s possible. Watch the webinar recording for tactics and processes that helped them start strong and strategies that are sustaining them in uncertain times.
Transcription:
Tristan Alden (TA): Hello and good afternoon, everyone. You're joined by myself, Tristan of Sourcescrub, and our esteemed panelists today. The topic for the webinar today is how Synacti sourced their first deal with Sourcescrub. So for today, we have a 30-minute webinar. We'll try and wrap up with around five minutes to go so we can answer any questions.
Octavian, we'll start with you. And then, Guy, if you can, you can, do your intro afterwards? Octavian, over to you!
Octavian Manoli (OM): Yeah. Thank you very much, Tristan. And thank you very much to everyone for joining this session, actually. My name is Octavian. I'm responsible for the origination at Synacti. I joined Synacti in March last year.
Before that, I was doing deal origination for Constellation and for Valsoft. And yeah, since I joined we we we we closed one deal and we had about to close the second deal. Guy, over to you, yeah?
Guy Mitchell (GM): Thank you. Yes. As he said, my name is Guy Mitchell. I am a director and co-founder of Synacti, as Octavian mentions.
And I work alongside him and myself and my co-founder, Mark. We got together, sort of tail end of 2023 and formed Synacti. I guess both of us got together at that point because, you know, we come from a background, so we have a real passion for software companies and a passion for growing software companies. And, you know, the biggest asset in a software company is of people with a real passion for working with people as well.
So we were really keen to start something, partner with businesses, and hopefully grow something, something special out of that as well. Octavian came on board with us, as you mentioned, in March 24. And things have really began to move for us since then. I mean, Octavian was brought in a deal origination role, and he's certainly brought a lot to the table in that respect with the skills that he's got as well.
And it's been really good fun, to date. I mean, I may, I guess I'm 25 years in senior finance roles. 14 years of those in the last 14 years in software. And, I guess I've seen the real good, the bad. And sometimes completely ugly, of software companies as well. And, really, our aim is to try and bring some of that experience to bear to, to some businesses as well and really help them grow and our model really is to target young, software companies who are on a growth curve, and, you know, are looking at some sort of expertise.
We're not trying to come and dictate, but they've got a management team and founders who want to stay in the business. It's their baby. We want to help them get there and really realize the potential for them. So that’s me.
TA: And in truest form, Alex has joined fashionably late. So Alex is also one of our panelists. Anyone that goes to RollUpEurope or knows of RollUpEurope will know of Alex.
So, Alex, over to you to introduce yourself. You are mute, by the way.
Alex Prokofjev (AP): Yeah, sure. It's very nice to be in this webinar. I do have a good reason for being late. I was just seeing a factory here in rural Estonia, so I'm no longer buying stuff for businesses. But I am very active in the port co space, as the readers of RollUpEurope will surely know.
Formerly, I was the CFO and head of M&A at Threecolts, an e-commerce aggregator, which during my time there went from $7 million to $16 million in revenue. We made some good acquisitions. We made some bad acquisitions, and definitely had a lot of learnings about origination. And, the last thing I'll say, I'm a big supporter of Sourcescrub. I think if you're not using Sourcescrub, you’re not being efficient. Which is why I'm in this webinar.
OM: That's so Alex. I want to tell you that when I joined the market, you called me and you said, Octavian, if you need a good, a good tool. Yeah. When I was, say, Alex, what kind of tool talking about?
TA: Thanks, Alex, for the shameless plug. Yeah. So, for the first question, Octavian and Guy, we’ll kick off with you guys.
Let's jump straight in. And, if you could share how you kind of approach building your technology stack, to underpin kind of Synacti’s acquisition strategy, you know, which tools you selected, how they integrate, and why you took the approach, that’d be great!
OM: Yeah. I'll get I'll start here. Look, when we started Synacti, we understood that we need a way to communicate with the market.
We need a way to to approach them. And we needed a way to say loudly who is Synacti? Yeah. That's why, like, in the market, you have sometimes CRMs that provide also like marketing campaign, but it's not as good as like it should be. That's why what we did, we selected three tools. One was Sourcescrub, of course, because we wanted to start full steam and we wanted to make sure that we are talking with the right people in the market.
Yeah. And that's why we got Sourcescrub. The second one, we have a CRM system, and we made the connection like, and it's like native I would say connection between some Sourcescrub and our CRM system that allows us to pump the data from Sourcescrub into the CRM system. What is what's very good that you guys have is that we are allowed to not to move the name or name of the company, but that let's, let's call it the commercial name of the company into the crm, which is very important when you reach out. Yeah?
That's why we select Sourcescrub. We have a CRM system and we have a system that allows us to to do like, like to do the outreach, you know, to reach out to them and to make sure that they know about us. What we did we invested a little bit of time and money into connecting all these three systems together as such.
Sourcescrub that speaks with our CRM, CRM that speak with our, outreach system, and we avoid it like we reduce the manual, like, or the, you know, the fact that we need to do something manual and this is what we, what we did for like and right from the, from the beginning.
GM: Yeah. I think if I can just kind of add on to the back of that as well.
So we're willing to invest in the right tools for us to do the job. And so, you know, when Octavian had come on board, we were discussing this, we said, well, look, let's do the right thing now. Let's set it up now. And we're trying to keep the top call as Booz. A lean top call. And, really to kind of, to automate as much as possible was really key for us.
And, like, the price points and things with every software that you engage with. But for us, was it came into it, it wasn't so important. It was about getting the right tool for the job that we wanted to do. And that was really key. And, I think given the level, you know, of opportunities we see coming through, it's proved to be the right strategy so far.
OM: Yeah. That's right.
TA: And so obviously, yeah, the big headline was that you guys sourced your first deal, you know, using Sourcescrub. So I guess, I'm sure lots of people will be keen to understand, kind of, you know, what numbers did you need to reach out to, and how big was the pipeline before you actually started to get some traction?
And then also touching on that specific target that you acquired, you know, what did you do in terms of outreach and just walk us through that process from top of funnel through the, yeah, through the flag.
OM: Yeah. Tristan, we started to go country by country and industry by industry. Based on my experience, we decided, okay, like healthcare is not something that where we will go off of the companies because, so my point of view, healthcare sometimes could be extensive.
And we started to go country by country and we built a funnel of of or funnel of companies. By the moment that we heard back from our third deal that they want to sign. Like they did, accepted the IOI, the offer, I think that we had already, and I would say roughly 4 or 5000 companies in our funnel.
Those are companies that at least they heard at least once from us, yeah? And this is, and we usually we try to speak with at least to have meaningful contacts. When I say meaningful contacts, I mean that like, really discussions, trying to understand what motivated them to respond to our email. What what like what's the next for them?
Why the they considered to speak with Synacti? That means that we try to have at least 30 meaningful calls per month, at least. And yeah, by the moment that we heard back from Callbell that they wanted to consider our offer, I would say that we had at least 200 calls before that.
GM: But some good numbers!
Yeah, it is big numbers and I think it's interesting as well. And Callbell was a good example of that. You know, they were our first acquisition. And you know, at that point, you know, we barely got a proper website in place and, but it was like it wasn’t even was a proper website at that point. So they were kind of engaging with us, going, is this actually serious?
You know, these guys, these guys that have come through to us. But I think that's very, very quickly on the journey. You know, it's important to invest the time in speaking to these companies as well. Because it's an old adage, you know, you got to kiss a lot of frogs sometimes, to get the, to get the one that you're looking at, you're looking for.
And so we did invest the time, and again, it was very useful to be able to drill down, quickly and effectively, for us to, you know, to focus on the right, the right companies at the right time. And again, speaking to Callbell, you know, the fact that we use tools like we do, I think just kind of helped convince them that we're a little bit more serious than they originally thought we were when we first approached them.
TA: Nice. Yeah. I hadn't thought of that one before. And yeah, talk us through. Octavian, I guess this would be for you. How did you initiate that first contact? Like what? How many times have you already reached out to them? You know, what medium of communication did they actually reply to you back on? Was it email? Phone? Yeah, how did you do? How did you do that? What does it look like?
OM: Yeah. Tristan, look, when we started to approach them and other companies, like, it's safe to say that it's got guys that said we didn't have an active web page. Like, if you're looking at www.synacti.com, you saw nothing, yeah?
You saw something which wasn’t perfect. But we continue to approach companies, including Callbell, based on my records we reached, we sent them the first email. They did not respond. And we usually do not send an email to just one person from the company. We usually we at least it's a rule. It's like we at least have to have at least two contacts from one company, yeah?
And we sent to them 2 to 3 of them emails. No response from the first email, no response after the second email. And Carlo, the CEO, because I have a link in our email like in the in the signature, and I have a trigger, like I have a system that allows me to see who clicked.
And I called them actually after that, yeah? And I saw that Carlo clicked, and I said, let me call him. And I said, dude, I know that you click. You saw my email. I know that you clicked. Like, I would like to understand what made you kind of because, as you can understand, through something like tens of emails like this every week.
And we started the discussion, and my usually in during the first call, I try to have questions, but not questions about the numbers. Like for me, it was important to understand why they wanted to, like why they did consider this email and did not consider other emails. Okay. Yeah. This is actually what what made us to to, I would say allowed us to build a little bit of trust and relationship with them and only after during the second call, when it was a formal call, like we started to speak about numbers and this is how we, we, we ended up having a good relationship with the emails.
And after that, the call with them directly trying to understand where is the need, or like why they would consider speaking with people like us.
GM: I like how Octavian gives you the impression there that you clicked on this! What are you saying? He's on you like this?
OM: Well, sometimes. Yes. I mean, if we have time.
Yes, we call a lot of people. If we don't have time, we don't call them. But yeah, that was the case. You know, we were lucky to say, oh, that guy clicked. Let me call him.
And we are allowed to mention other software platforms in the call, although not direct competitors, like, you use Outreach, don't you? So the audience knows.
We do use Sourcescrub, we do use Salesforce, and we use Outreach as they have native integration among them.
This is how we connect it. But yes, it's safe to say to some that and Guy will confirm that when we started, we invested a little bit of time and money, and we got a free lesson that made even from my point of view, I might be wrong. Yeah, but we made even better communication among these systems than they have with each other, yeah?
Like no,w all the emails that we sent are registered. We have them in the CRM. We know forwarding who’s out. We know that they did respond, which is very important. Like if you build something for the future.
TA: Or something that's largely all automated. So it's just picking it up. Yeah, exactly. And I'm curious, before we turn to you, Alex, just a final question.
How exactly did you identify, you know, your hit list of top targets, by using Sourcescrub itself, because this is something we get asked all the time, how do you actually identify which ones look like the most attractive targets? Using the platform?
OM: Well, we like your feature, your feature that where we put the a company that we know that it's it's like it's of interest to us and shows us like companies that are the same in the same space.
That means that those are competitors. This is a way that we are like this, some feature that we use a lot. We also use your AI where we just type and say, this system, give us the list of these and these companies. And yes, like once we have a call with someone and once we, we understand that that industry could be a fit for us and the industry is performing well or is growing, then we go by industry and like, you know, the system does allow us to to to understand where that that company comes from and to select companies from the same space from the same country.
GM: So, can you imagine the number of people you'd have to have involved in the business to to do some of what Octavian just described if you weren't able to automate it? I mean, we have a much bigger team than what we have now, that would just have to be doing that manually. So it's really saving on time for us.
TA: And Octavian, do you typically try to focus on companies that are growing? Does that matter to you? Do you normally try to identify?
OM: That does matter. For Synacti, yes, that matters. We do like the growth more than I would say EBITDA. And yes, we, we are the people who like to bring some organic growth to the companies after acquisition.
But at the same time, the company should have something like should have a DNA of growth out. So like this. That's why when we look into the system, when we are looking, we always have a like, like I would say put the system to help us to look only after growing companies.
TA: Thank you. And over to you, Alex. I know you get asked all the time by new serial acquirers. There's a lot of them, going to the events or people coming to you, like in investment banking or private equity. They're looking to kind of start up. I guess, what are the kinds of common pitfalls you see that newbies typically run into? And what are the kinds of or one of the most common, mistakes you see in the market?
AP: Yeah, I'll say there's probably two types of mistakes. I think the first one is that people try to reinvent the wheel, and in the process, eventually, if people are smart enough, persistent enough, they figure out a sort of a workflow that is efficient. But until they do, they end up with processes that are very manual.
And I want to pick up on something that Guy said about like, so this is a numbers game, right? I've just come back from seeing a factory that produces millions of consumer items per year. Okay. And, you know, we were just going through the different parts of the factory just now, looking at the conveyor belts at the warehouse.
And basically the owner of the factory says, listen, so we improve the procurement process, which reduces our Cogs by 2%, right? Or we do something else. But all of that adds up, right? So, ultimately, you need to be able to stand out in an increasingly crowded kind of landscape. I think if you're running like a thematic buying build that's focusing on specific type of software, maybe you buy an ERP, or maybe you’re buying manufacturer software.
It's a little bit easier for you, but also your addressable universe is smaller. If you're running a more interesting, agnostic port co like a Synacti, it's harder for you, right? Because a lot of people are trying to reach out to the same business owners with a very similar pitch. So this becomes very much, sort of attitude game, but also like a numbers game.
Right. So, what can you do to maximize the conversion? Right. So you have kind of multiple points along the funnel, starting with like, is your universe big enough? Right? So okay. If you're not using Sourcescrub, what are you doing? Are you manually scraping databases? Surely you're not just going into some weird industry forums and scraping them one by one because it's not efficient, right?
So you need to be able to maximize your conversion along the way. And this is where if you're not using the tools that the slick system that Octavian mentioned, by the way, I should steal your freelancer because I need to set up something very similar to clearly you just you just saved money on the table. So that's number one, right?
So don't try to reinvent the wheel. Don't start with the manual processes. Don't try to skimp on the cost. Do something that's efficient. Put the investment on day one. Otherwise you just end, you just you know you will end up going very, very slow. I think the second part is about what type of people you have on the team.
What I like about the Synacti team is that you clearly have people who have done this before. You know, Octavian has done this before since he worked at aggregators. The rest of the team has software experience, whereas what I tend to see with a lot of new software aggregators is that they tend to be populated by people who come mostly or exclusively from the finance industry.
Right? And I have nothing against this industry. I myself worked in investment banking for a long time, but people tend to prioritize, I would say, quantity over quality. And a lot of the time, when people pick up the phone and call the founders, they tend to sound too pushy or too aggressive. You cannot do that, right? So there is there are different ways to follow up with that founder when you see that the founder has clicked the link or opened the email, which, like Octavian said then, if you come across as too financial or too pushy or just too impatient, one of the two things are going to happen.
Number one, the founder will lose interest in you and just say, I don't need to sell to that difficult person or the price goes up, right?
They see a difficult person or think this is somebody who's in a rush to spend the money, okay? So maybe that person can pay half a turn to return and be down more. So those would be the two things that I would say that Synacti has been able to nail that some of the other emerging sale acquirers are struggling to get right.
TA: Thank you, Alex! And that we've talked a lot about systems. But once you've actually, yeah, initiated that first contact when you actually kind of scheduled, you know, your first in-person meeting, how do you guys go about differentiating, you know, what do you kind of bring to the table that helps you really build trust and secure deals?
And obviously, I know you've got a second one on the way.
OM: Well, Tristan, I will tell you, like, I what what Alex said resonates a lot. This is sometimes it's about it's a game of numbers. Like, there are so many players doing the same thing. And believe it or not, they use like they send emails.
Now, this is one of the most effective, I would say, communication channel. But, and this is like until you get on a call with them, it's a game of numbers. You have to send like a number of emails. You have to reach out to a number of companies, but once you are on a call with them, this is the way when you have the taste, like when you bring a little bit of trust, and then you are able to bring some differentiators to be different than others.
Yeah? So like Alex said, some people like they go straight to the numbers. If you are below that number, like below that revenue threshold, no one is willing to to to speak with you, yeah? Also, second, what is important from my point of view is that people usually sell one company in their entire life.
That's why it's very important to build trust. It’s very important to go out of those numbers and not to be part of that number game, but like to build trust and to make sure that you listen to them. And if you have in your company everything that they said that they need, then you tell them, I can provide this to you guys.
Yeah. And this is like I do agree a lot to really what Alex said. It's numbers, but at the same time, it's the right approach when you speak to people, kind of, yeah?
GM: Yeah, I think just absolutely agree with all of that as well. I mean, what we've found with great success so far in terms of, you know, we get to speak to people who ordinarily might not entertain us.
Right? Is that, you know, people can see the passion. We were quite down-to-earth as a team anyway. Right? But they can also see the passion that we have for software and for helping them to succeed. Because, you know, we touched on it earlier in the call. I mean, for all these founders, it’s, that's their baby, right?
And Octavian's right, you might only sell a company that you've created once in your lifetime. Right? And you actually feel a big emotional attachment to as well. And what you don't want to do is sell to someone who's not necessarily going to take care of it or, you know, have the same passion that you do. So our approach is that, you know, we all come from software backgrounds ourselves.
We understand the journey that people have been through to get to this point and how there's so much more for them still to do. There's a journey for them to go on, but they want someone sitting alongside them rather than dictating to them from above, sitting alongside them and helping them get to the same goal. And we're all aligned on the same goals.
And I think that's, that's been really enjoyable actually, so far, doing that as well. And I think a lot of people have enjoyed speaking with us on that basis. And hopefully Callbell and the others that we're going to acquire can see the same thing as well.
TA: Yeah. And so, you know, what we hear a lot as well is the kind of space that serial acquirers are in.
It's less competitive than, you know, mid-market or PE. So that's partly driving more and more people to enter into it. Although I think partially this is driving that for more competition in the space. So, do you see a large level of competition in terms of the people you're reaching out to? Are they already flooded, you mentioned earlier, that they are they would be flooded with emails from other investors?
What kind of competitive landscape do you guys see?
OM: Well, I spoke today with the company, which is a $5 million revenue growing 10% year over year. And he said, Octavian, last week I had 8 emails like you. I was surprised. I was like, well, what made you to respond to my email? Just imagine. One company. $5 million. Yeah. Like, what can we say about companies that are like $8 million?
They gain more interest from other players, yeah? Or like something like that. And that's why there are lots of people doing and doing like reaching out to companies, and the competition is struck out. So like you.
TA: And Octavian, you mentioned as well that you are getting good, can have you know, your emails are landing, people are taking them.
You know, obviously that guy today, you know, responded to you. How personalized do you go in terms of the emails? Because this is always a hot topic. Yeah. How personalized are you going? What level of personalization are you adding? Just talk us through that because I know people always ask about that one.
OM: We try to find a balance, but yes, when we have, let's call them, customized emails based by the industry, as an example, yeah?
And we try to bring some of the news from the industry. We put in that email. We sometimes even name the names and put the names of their competitors in an email when we see. Of course, we don't do it manually. Tristan, don't get me wrong. We just create email sequences, but we sometimes even put the name, names of their competitors.
And this is the way that we try to make it more like customized, more like personalized. And. Yeah, but I'm not sure, like, I have my point of view. I have a very good open rate, but I'm not sure. Perhaps people do something else, and even more than like they have an even better response rate than I do.
Yeah? But yes, we we, we try to customize the email based on the country, industries, based on their, based on the, the last events, for example, there is a trade show which by the way, your, your system is very good because I used to go to the web page of that trade show to understand what are the software companies that will attend and, and with your system is just a few clicks.
And I do understand because I know the name of that trade show, you know, and with a few clicks, I know like I have the list, the people. Then by the way, let's, let's stick to them. Yeah.
TA: Another shameless plug for Sourcescrub, so I appreciate that. And I guess to wrap up because I know you guys focus on software companies.
Alex, you see, and you yourself are actually active in other spaces. What's the kind of approach and the level of personalization you see in other spaces? Does it differ? Because we have people that have joined us today and will be watching the recording, doing roll-ups in traditional industries, you know, compliance, that type of environment as well.
So what's your kind of stance on the nuances there?
AP: I think it's very simple. That there is one phrase that I heard at a conference, at a hotel conference in America a couple of weeks ago, and it's a very simple phrase that really resonated with me. You did not lose a deal because the capital wasn't there. It’s because the price was too low.
Right? We talked about the sort of number of people that are flooding into the space. And I think the fact that search funds, port cos, and roll-ups are becoming much more prevalent. And I have to take part of the blame because of all of Europe, but also because the AI tools, various tools, are becoming more popular.
Like I use some AI tools, you know, I think you end up with people just being overloaded with information and sort of, a business owner may get this idea that there are a lot of people standing outside his or her door, but it's actually not it's actually not true because the credible buyers are not. There are actually not that many.
So I would say the emphasis for me is to definitely try to do a lot more research ahead of that. We also write personalized emails, and I think using various tools, you know, ChatGPT and Sourcescrub, and just anything that we can learn that gives us this incremental edge, you know, and maybe we can go. So, rather than just email the person, maybe we can meet that person at an exhibition first.
Right? But I think creating that emotional bond and actually ensuring that you care about the business of the owner, for me, this is the thing that actually converts at the highest rate. And whether you do it in the email you mentioned, maybe the fact that you want you're looking at this industry. And as Octavian mentioned, maybe you list a couple of competitors.
Or in our case, we tried to do roll-ups in the Baltic region. So we come to the meeting prepared and say, Look, we've spoken to XYZ from the industry, this is what we want to do, right? And I would say the more you can do ahead of that first meeting, the higher your chances of actually getting insurance.
So, so once again, to recap, use software like Sourcescrub to research and get the maximum information to refine your data set and to also refine your thesis. Have a really punchy email. Maybe you need to you need to do it in multiple languages. Maybe some people are not comfortable using English. Again, you know you can't just machine translate in English.
You know, we actually been fighting a lot with the team here. I had to completely rewrite some of the emails. And when you do plan your in-person meetings, try to plan it in a way that maximizes, the, the sort of the positive impression, maybe do it at an industry conference or maybe when you walk up to the meeting, you already know, like the basic facts about the company in the industry.
That's what helps you stand out from the, from the competition, because 90% of my competitors are just people who come unprepared. They don't even know what the company is, and they have a vague idea. If you are not like that, immediately your probability of converting goes up, right? It's either that or it has to be the price.
And nobody wants to compete in the pricing in this industry.
TA: Thanks, Alex. Well, I know we're up for time. So a massive thank you for everyone that's joined. For those of you that will be watching on the recording, also thank you as well. And huge thank you to Octavian, Guy, and Alex for joining us today.
OM: Thank you very much.
GM: Thank you very much.
TA: Cheers, guys. Take it easy. See you later.
