Stephen Campbell, the founder of Tiny Acquisitions, is a serial founder. Among his many projects is Jamaica Reviews, which aggregates transparent reviews for Jamaican businesses; ScotchBonnetPeppers, which delivers spicy yellow peppers from Jamaica to around the globe; The Maker Mindset, a book on building and selling small projects; and Virtual Ghostwriter, which lets people generate copy using artificial intelligence.

Virtual Ghostwriter, which charges $9.99 a month, was doing well for a while — Campbell was feeling positive about it. “We even came top five in the AI category for the ProductHunt Golden Kitty award,” Campbell tells me over Zoom. But soon, Virtual Ghostwriter’s growth started to slow down. Monthly subscriptions dropped. By January 2021, Campbell started to worry about the future of the business. And he was ready to move on.

Campbell turned to the many acquisition marketplaces on the internet, but his efforts were futile. “I listed on MicroAcquire and some other marketplaces, but the responses were shallow,” remembers Campbell. “Many people who were inquiring weren’t actually interested. Nothing ended in a deal, so I began to think — maybe these marketplaces aren’t suited for smaller projects that sell for less than $1,000, or less than $10,000.”

The earlier parts of running a business have become easier than ever before thanks to new tools — Stripe to incorporate and set up payments, Squarespace to build a website, Mailchimp to build email campaigns. Simultaneously, new business applications in the U.S. have skyrocketed.

But the final part of the business journey — the acquisition — remains what MicroAcquire founder Andrew Gazdecki describes as the “dark matter of tech.”

“I think people just think Google shows up at their door with a big check,” says Gazdecki.

Acquisitions are especially difficult for companies who might want to sell for smaller amounts. M&A brokers are not always the right decision — brokers take cuts of sales and don’t always make financial sense. Not everyone has the right network or the right timing or the right location to be approached by a buyer independently. And it's not always clear how much smaller companies should be sold for (in 2018, Crunchbase stated that the average startup acquisition was worth $155.5M — a number that was skewed by the biggest deals and the lack of overall acquisition data, and is yet to be amended).

Enter the acquisition marketplaces. Those like TinyAcquisitions and Side Projectors cater to the smallest businesses. "Some businesses list between $10,000 and $100,000, and they’re usually making between $1,000 and $5,000 a month,” says Campbell. “Those that list less than $10,000 are typically making lower than $500. And some are even pre-revenue.”

Others, like MicroAcquire, market themselves as open to all revenue-making startups. MicroAcquire competes directly with the older acquisition marketplaces, like 11-year-old Empire Flippers, and 13-year-old Flippa, the oldest and biggest player in the place.

However, there are unofficial niches. MicroAcquire is often recommended for SaaS tools (in fact, Gazdecki sold his own SaaS startup for a "small but life-changing amount of money") and has several SaaS-specific features. For example, it allows companies to connect their Stripe account to the platform and produce a free valuation, with a focus on the monthly recurring revenue (MRR) that SaaS companies usually incur.

And though the lines often blur, the older acquisition marketplaces have grown popular for ecommerce and content businesses, as well as domain names.

But all marketplaces have two sides. Not only are acquisition marketplaces catering to a new generation of startup builders, they're also catering to a new generation of buyers.

Just shares that the buyers on BitsForDigits often cross over into professional buyers. “We also have serious buy-side professional investors, including micro PE funds, family offices, that are OK to pay subscriptions,” he says.

“This is a major trend,” adds Roman Beylin, who runs M&A due diligence marketplace DueDilio. “You’re seeing a lot of traditional private equity groups go after the SMB market, where maybe it was too small for them before.”

Many cater to ecommerce aggregators, especially with the entrance of deep-pocketed aggregators like Thrasio, which has raised $3.4B and is snapping up stores left and right to integrate into its brand.

And for SaaS buyers, MicroAcquire has partnered with recurring-revenue lender Pipe to help buyers get upfront cash that they can pay off monthly with the revenue streams that they’ll supposedly get from their SaaS acquisitions.

Then, there are buyers like Bruce McLachlan, who was working a full-time job as a technical director at a fintech company, but knew he wanted to become an entrepreneur — specifically, the CEO of a SaaS company that he could grow with his technical skills. But McLachlan has a family and didn't have the runway to build a product without making any money. Instead, he wanted to buy a pre-built product.

He spent ten months browsing listings. Eventually, he long-listed 83 companies on MicroAcquire.

But there wasn’t enough information online for him to feel comfortable with making the deal. So he set up calls with 18 companies to ask a few key questions, like: How mature is the product? What marketing channels do they have?

Based on the answers McLachlan received, he narrowed his list down to six businesses. He sent a letter of intent to each of the six businesses. And of all of those businesses, McLachlan worked out a $60,000 deal with a company called Cloakist, a startup that lets people change URLs on sites like Notion and Google Docs to their preferred web domains.

But the process was far from over. For the next six weeks, McLachlan spoke with Cloakist’s co-founder Louis Barclay to learn everything about the business. “There was full transparency about what was there, what wasn't, what might be done in the future to improve the product, and grow the business,” he says. “I wasn’t just buying something blindly. And as we went through his business, I started to get my own ideas about how to improve the business and the product.”

McLachlan had a successful outcome: he quit his full-time job in April 2021 to go all-in on Cloakist. His plan is to “3 or 4X” the business from when he onboarded it in February 2022.

But McLachlan’s effort was still hefty — marketplaces might make it easier to list niche businesses and find more buyers, but they still lack the curation and hand-holding that come with in-person brokers or a deal that’s made in an acquirer's office. And, like a lot of marketplaces, they can be gamed.

“It’s important to closely vet the smaller businesses being listed,” says McLachlan. “Sometimes, you see people building products where the owners did a big drive to get initial users just to sell the business. There won’t be a lot of history in the business to see if users stick around and use the product, or if it’s even worth anything in the long run. That’s always quite risky.”

And even in the new world of acquisition marketplaces, valuations remain a mystery.

“In broad strokes, I’d say the marketplace is a good option for entrepreneurs,” says Beylin. “It creates transparency and lets you see what other businesses are selling for from that perspective. But it’s not always the best option. Sometimes, there’s a lot of value in having a professional M&A advisor, to help you on the valuation and the terms of your deal. Especially around the valuation, I think a lot of startups come into these marketplaces with a skewed idea of what they’re worth.”

“No one wants to get ripped off,” he adds. His company DueDilio acts as a marketplace for startups that are looking for pre-vetted due diligence providers.

And Alexis Grant, who’s sold two companies and now runs They Got Acquired, a publication on companies that sell for less than $50M, agrees that valuations can be off-base on marketplaces, but she's optimistic. She's working on a database that will track all acquisitions under $50M — something she thinks will benefit the ecosystem as a whole.

“There is no good place to find data on smaller acquisitions," she says. "We want to answer questions like: What did other ecom companies your size sell for? Who did they sell to? Was there a broker?”

In January 2021, ten months after Louis Barclay first listed Cloakist on MicroAcquire, he sold his business for $60,000. But the most important thing the sale gave him was psychological freedom. “I sold it to a fellow developer, I made some money, and it was nice to see that my work wasn’t wasted.”

He’s since used the money to launch Nudge, an app that intervenes when people are spending too much time on social media, with features like screens that block Facebook or Twitter whenever a user pulls them up. Barclay’s dream is to find a way to cure social media addiction; he's now considering whether that dream is best-fulfilled through a non-profit model.

He agrees with Gazdecki. Sometimes, to pursue your dreams, all it takes is a "small but life-changing" acquisition.