Summary
In this episode of the Inorganic Podcast, hosts Christian Hassold and Ayelet Shipley, along with guest Anthony Costanzo, delve into the topic of becoming a “platform”, that is, an agency that becomes the foundational business for additional add-ons to expand service offerings or grow into new client categories. They discuss the characteristics of successful platforms, including company behaviors, leadership attributes, and the important role of investors. The conversation highlights real-world examples of successful platforms and emphasizes the need to align the vision and investment strategy between founders and investors. The episode concludes with insights into the future of platforms and the opportunities for growth through add-ons.
Takeaways
The concept of a platform in M&A serves as a foundation for broader investment strategies.
Many successful platforms exhibit platform behavior before becoming sponsor-backed and expanding rapidly (Croud, Brainlabs, Wpromote)
Qualities of CEO’s that are prepared to lead a platform often have a good bench of leadership and a C-team that fills in their own capability gaps (CFO, COO, etc)
There is no shortage of private equity investors willing to back agency platform scaleups, but you need to choose
The right investor can not only provide capital, they offer strategic guidance and can help with the search for add-on businesses
Agency founders/owners should determine the kind of investor they desire (active or passive, for example) and what role they want investors to play in the business (board level only, or operating advisors).
The future of platforms is promising, with increasing opportunities for growth and consolidation.
Chapters
1:24 Anthony’s Story & Approach to M&A
6:08 What It Means to Be a Platform
8:54 Key Criteria: EBITDA, Clients, Teams
15:46 Traits of Strong Platform Leaders
20:34 The Investor–Founder Relationship
27:17 Should You Really Be a Platform?
31:36 The Reality of Becoming a Platform
36:36 Real-World Examples of Platforms
44:23 Market Trends in Platforms & Add-Ons
47:34 Rethinking the Role of Add-Ons
49:22 Closing & Takeaways
Connect with Christian and Ayelet
Ayelet’s LinkedIn: https://www.linkedin.com/in/ayelet-shipley-b16330149/
Christian's LinkedIn: https://www.linkedin.com/in/hassold/
In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured
Connect with our guest Anthony Costanzo
https://www.linkedin.com/in/anthony-costanzo-08062318/
