How a Tech Founder Transformed into a CEO Championing M&A Growth

The role evolution from tech lead to CEO

M&A came into play much later, once we were private equity-backed. Initially, we started with a different business model and eventually discovered the staffing industry—it was almost accidental. 

An investor introduced me to the owner of a staffing firm. At the time, we were trying to build a freelance marketplace, and the investor said, “You should meet my friend who runs a staffing business. They do what you're trying to do, but in an offline version.” That meeting changed the trajectory of our business. 

The owner explained the challenge of managing multiple offices, each with its own database. They were spending heavily on R&D to synchronize those databases, and I suggested, “Why don’t we put your database on the internet?” The owner immediately saw the potential and agreed to pay us about $25,000 a month, which was mind-blowing at the time.

Once we built the software, it became clear there was a huge opportunity in the staffing industry. While the term “software as a service” wasn’t common then, it was evident that selling internet-based software to help staffing firms manage their businesses from start to finish was a solid path forward. That’s what I’ve been focused on for the last 25 years.

I initially served as CTO. Eventually, as we began commercializing the software, it made sense for me to step into the CEO role. It was around 2003, and we faced significant challenges. 

We couldn’t raise capital, so the founders had to regroup and focus. My co-founder with a sales background focused on signing accounts, another took on CFO and operations, and I focused on the business. This division of labor made the CEO role a natural fit for me, and I’ve grown to love it over the years. I wasn’t great at it on day one, but I’ve learned a lot since then.

Being a technical CEO allows you to stay close to the product while understanding go-to-market strategies, finance, and customer needs. It’s crucial to identify whether competitors are real threats or if their features can be replicated. 

Plus, understanding good software helps you recognize when your team is delivering quality or missing the mark. This perspective has been invaluable.

Lessons in Discipline and Growth

We initially bootstrapped, and it was sort of a funny story. We did a Series A round in 2000-2001, even though we had no business raising money at the time. We had no revenue, and then the bottom of the .com market fell out. But the .com boom made it seem like the right thing to do, and we raised too much, too early, and then spent that money too quickly. 

Investors encouraged this approach, focusing on building the brand and collecting eyeballs. The top metric was clicks per day, but we quickly moved away from that mindset. By 2002 and 2003, the funding environment for software as a service (SaaS) was terrible. 

I pitched to venture investors, saying, “We have a SaaS business approaching a million dollars in revenue. Would you fund us?” The answer was a resounding no. 

I vividly remember a meeting with a venture capital firm that later invested in Bullhorn. It ended abruptly when the partner said, “Enterprise businesses will never buy software as a service. It’s always going to be client-server. You’re crazy to think they’ll use the internet.”

Fortunately, she was wrong, and years later, they came around. However, at the time, skepticism forced us to adopt a disciplined approach. We couldn’t rely on venture capital and had to sell our way through that tough period. 

The economy wasn’t great either, so we became highly focused on managing expenses, being frugal, and finding customers willing to bet on us. We were fortunate to have big customers take that leap, which allowed us to grow organically.

We reached $20 million in revenue while maintaining 50% year-over-year growth, achieving the "triple, triple, double, double, double" growth model. Unlike most venture-backed companies that burn cash to achieve similar milestones, we stayed cashflow break-even. 

This was a testament to the demand for our product, strong product-market fit, and our leading position in the SaaS market. Opening up our ecosystem with an API further accelerated growth and expanded our reach.

When it came to M&A, Vista Equity approached us in 2012 with an offer to acquire the business. At the time, I knew little about private equity or M&A. Between 2010 and 2012, we hadn’t raised new funding beyond a mostly secondary round in 2008. That round was used primarily to buy back shares from Series A investors and some angels. 

We added some funds to the balance sheet but didn’t need to touch it because we remained profitable throughout that period, it was largely a secondary capital raise. We thought we might actually burn money for a period of time, but we were able to grow faster than we expected.

Even during the tough recession of 2008-2009, by 2010-2011, growth had resumed, and we didn’t need to burn capital. Then Vista came along and showed us the potential of using M&A to accelerate growth. 

At first, I was hesitant, thinking raising $20 million in equity to acquire a business would dilute shareholder value. They introduced me to the concept of leveraging debt markets instead. 

The math was compelling—if you acquire a business generating $20 million in bookings and that acquisition doubles your bookings to $40 million, it’s a no-brainer. In five years, you could turn that into a $100 million business, paying off the acquisition debt while generating significant profit.

Vista also taught us the importance of integration. It’s not just about signing an LOI or closing the deal; successful integration ensures you hit your sales targets and maximize value. They provided best practices around acquisition integration, which made them an excellent first private equity sponsor for us. This experience laid the foundation for our continued success in leveraging M&A for growth.

The case for buyer-led M&A

We were buyer-led. We didn’t build a team right away, but Vista had deal professionals who helped us prospect and negotiate. 

Their methodology was clear: canvass the entire market, build a database of every potential target, and decide which deals to pursue—and pursue aggressively. The idea was not to wait for a banker to hand you a book. Instead, go out and make the deals happen. 

Waiting for a banker’s book doesn’t make sense because you may end up with the wrong deals. A banker might show you a beautiful business, but it could be the number three product in the market. Why not aim for number one or two? 

At the very least, you need to know why number one isn’t an option—maybe it's too expensive, or they don’t want to sell. But if you’re not already diligent in assessing the entire market, you could miss these insights. You should know exactly what you’re getting, the value it brings, and whether it’s the best asset available for the price.

Another key factor is timing. You can’t fully diligence an asset within the short diligence period offered in competitive banker-led processes—sometimes just three to six weeks after signing an LOI. 

If you’ve done the work upfront, talking to customers and understanding the market, you’re not scrambling to make decisions. By the time you approach a business, you already know what the customers say about it.

A buyer-led approach gives you the advantage of deeper diligence, more time to understand the market, and better rapport with the target company. You can navigate surprises more amicably. 

Most M&A diligence focuses on financials—quality of earnings, revenue retention, and spreadsheets reflecting past performance. But those metrics only tell you how healthy the business was a few years ago. Talking to customers tells you how healthy it is now. That’s the hardest diligence to do, but it’s also the most important.

For example, sometimes we see a business where the financials show issues like churn, and the CEO might acknowledge they had customer experience problems. But through customer conversations, we learn they’ve addressed those issues. 

In that case, we can look past the past churn because we see that customers are now satisfied. Another buyer, relying only on historical metrics, might pass on the same business. Great companies sometimes face temporary challenges like product-market fit or leadership turnover, and those issues take time to resolve. 

Customer diligence helps you understand whether the company has overcome those hurdles and whether it’s positioned for success. It’s like looking through the windshield at where the business is going, rather than the rearview mirror at where it’s been.

Leveraging customer insights to identify strategic opportunities

If you're a horizontal solution looking to acquire a business that focuses on other horizontal solutions, it's challenging unless you have a substantial customer base. 

At Bullhorn, we benefit from being in a vertical market, allowing us to focus on one type of buyer. When we meet with these buyers, we make it a point to ask them what solutions they use. 

Of course, we discuss our own solutions, but a critical part of the conversation is understanding who else they buy software from.

For example, we host a CIO forum once a year where we bring CIOs together for an event. During this, we go around the room and ask them who their best vendors are—those providing unique solutions and driving value in their businesses. Our corporate development team actively participates in these conversations, taking notes on valuable insights.

Interestingly, we don't directly ask customers for references during early conversations, as most businesses are hesitant to involve their customers in that way. It can create unnecessary anxiety. 

Instead, we consistently engage with customers to learn about the solutions they use and how they value them. This approach ensures the conversation isn't tied to an impending deal but rather about understanding their tech stack holistically.

This benefits the customer because it demonstrates that Bullhorn not only understands their specific piece of the tech stack but also how everything works together and what's most important to them. 

In some cases, one of our products might not be the most critical part of their operations. Through these discussions, we discover other tools they rely on heavily, allowing us to offer better service and deeper insights into their needs.

For us, everything starts with the customer. It's about understanding what's important to them, the problems they're trying to solve, where they're focused, and where they're heading with their business. We're always thinking about how to meet those opportunities as they evolve.

For example, with the deal we just completed with TextKernel, years ago, customers told us there were a lot of players in the market offering search and match solutions, which are critical in recruitment. But none of them had a truly great product. Customers suggested we step in to solve this problem.

We evaluated the market, including TextKernel, and at the time, we felt their product wasn't at the level where customers were raving about it. We also wondered if what customers wanted was even technologically feasible. 

Fast forward four or five years, and the feedback shifted. Customers started telling us TextKernel’s product had come a long way and was now fantastic. They’d cracked the code.

At that point, we realized owning this solution could be transformative. It was about listening to customers over time, constantly pulse-checking on how things were progressing, and making the move at the right moment.

Even with 1,600 employees now, staying connected to our customers remains a priority. I don’t personally talk to all 10,000 customers—that would be cool—but we rely on our strategy team and executives to stay close to them. It's our job as leaders to maintain that connection and ensure we’re in tune with customer needs.

Balancing control and growth with private equity sponsorship

To do M&A effectively, it's challenging when you're a smaller company. When we partnered with Vista, Bullhorn was approaching $45 million in revenue, a size where you can start thinking about M&A. At $10 million, especially if you're growing fast, your focus is just on keeping up with the growth rather than pursuing acquisitions.

Anytime you bring in a private equity investor or sponsor, you need to accept that you'll cede some control. However, as the CEO, if you have a strong vision and execute well, you remain in control of the company's destiny. 

The best scenarios happen when the CEO and management team lead with a clear vision for where the company is going and how to get there. The sponsor plays a complementary role by helping you think through potential blind spots, financing strategies for acquisitions, and ensuring the financial model works. But ultimately, you're in the driver's seat.

A critical advantage of partnering with a private equity sponsor is the ability to take risks you might not have been comfortable with otherwise. Liquidity from these deals can give you and your team the confidence to make bold moves instead of focusing solely on preserving the status quo.

At Bullhorn, this dynamic has been essential. Our management team is long-tenured, with most of my direct reports having been with the company for at least five years and some for over 20. 

Many of them started at entry-level positions and grew into leadership roles. This creates a founder-like mentality across the team, where they have a deep sense of ownership. However, that sense of ownership can sometimes make leaders overly cautious because their livelihood is tied so closely to the company. 

Private equity sponsorship helps address this by reducing personal risk and encouraging the team to focus on growth and innovation. It's a shift from simply preserving what we have to taking calculated risks to unlock new value. That’s where sponsor deals can be transformative.

It happens all the time—you hear about friction between CEOs and investors. It’s hard to predict who will struggle in these situations. 

That said, it’s not always about good investors versus bad investors. While there are bad investors who behave poorly, most don’t want to replace a CEO. Conducting a CEO search is time-consuming, stressful, and risky for the business. It can lead to losing top talent and create instability, which is the last thing they want.

What often causes issues is the transition from being venture-backed or bootstrapped to being private equity-backed. The dynamics are entirely different. 

Private equity brings a high level of scrutiny to finances and operations. If you’re not detail-oriented or you’ve never cared much about the financials, that mismatch becomes a serious problem. They’ll quickly realize that what they care about most isn’t your priority, creating a fundamental misalignment.

For instance, if you’re not focused on operational metrics—like improving your cost of customer acquisition or boosting customer retention—and your mindset is just to sell more software, that can cause tension. 

Similarly, if you’re accustomed to burning money annually while they’re pushing for profitability, you need to adjust your perspective.

To succeed, you need to understand what “good” looks like for them. How do they make money? What does their ideal outcome look like? Aligning with their goals means figuring out how to deliver a two- to three-times return on their investment within three to five years. 

If you don’t understand that or can’t deliver on it, you’re likely to be one of those CEOs who doesn’t work out because they will find a way to achieve their returns, with or without you.

Building M&A strategies and handling private equity transitions

With Vista, it was more of the latter scenario—they came to us with a mapped-out marketplace and identified opportunities for consolidation. Over time, we built our own internal M&A team. Initially, it was private equity-led, but by 2016, we brought the process fully in-house.

Today, we maintain a robust M&A database with hundreds of targets. We tier them as A, B, or C targets based on their revenue, growth trajectory, and alignment with our strategic goals. 

We track these companies regularly, contacting them at least once a quarter or every six months to gather updates. We also speak with their customers to understand their value and how they’re performing. This allows us to identify actionable targets and plan which A targets we want to pursue within the next 12 months.

When it comes to private equity transitions, it’s about aligning with their timelines and goals. Typically, private equity firms hold a business for three to five years, sometimes longer, and the CEO’s role is to help them achieve liquidity when the time comes. That could mean selling the entire business or just part of a shareholder's stake.

Each firm’s goals will vary, and it’s up to the leadership team to navigate those transitions. When a large shareholder is ready for liquidity, you go to the market and pitch to new shareholders—whether it’s a minority or majority deal depends on the situation. It’s all about finding the right partners and continuing to align with the company’s long-term strategy.

Structuring equity, debt, and capital in private equity deals

My portion of a deal is one of the least critical parts of the negotiation. In most private equity deals, management gets a predefined stake. As a business owner, you can choose to sell some of your stock or keep it. 

However, selling your stock prematurely—unless you truly need the money—is usually a poor decision. There are few assets where you have the control and visibility that you do in the business you run. 

Unlike investing in public stocks like Microsoft, where you have no control or foresight, in your own business, you likely know what the next 12 months or even two to three years look like. That’s a compelling reason to invest in your own company.

When these deals happen, there's typically an option pool created for the management team, and its size depends on the deal. 

For smaller deals, the pool might be around 20%, while for larger, multi-billion-dollar deals, it could be closer to 7–8%. These percentages are generally standardized in the industry, especially as the company grows larger.

When transitioning between private equity firms, the focus isn’t on using invested capital for acquisitions. M&A is typically financed with debt, not equity. The capital on the balance sheet is there to run the business, ensuring operations remain stable. 

When an acquisition is planned, you approach a bank, presenting the deal and the expected EBITDA it will generate. The bank then provides debt financing based on those EBITDA projections.

If a target company is burning cash, it’s generally avoided unless it’s a small acquisition or there’s a clear plan to turn things around. Private equity firms typically won’t support deals involving significant capital losses. Incinerating capital goes against the core philosophy of private equity—it’s simply not how the business works.

The right way to integrate acquired businesses

After Vista, we brought in Insight and Genstar simultaneously—they bought down Vista's share. Then, in 2020, Stone Point came in and purchased a share from both Insight and Genstar. Stone Point is now our primary shareholder.

Each firm has been a fantastic partner. Vista, Genstar, Insight, and Stone Point all brought unique strengths to the table. During our time with Insight and Genstar, they provided incredible support, but in different ways tailored to their expertise.

Stone Point stands out because of their deep concentration in the human capital space. They own a staffing business, which gives them direct insight into what it’s like to be on the customer’s side. 

Additionally, they own a vendor management business that interacts with both our customers and their buyers. Their knowledge of the human capital sector has been invaluable, making them an excellent partner for us.

The knack on private equity is that it’s all about slashing costs and focusing solely on profitability. While profitability is a focus, the perception that it means constant layoffs isn’t accurate—at least not for us. When Vista acquired us, we were about 150 people. Today, we’re over 1,600. We grow businesses by hiring great people and scaling.

One of the key lessons we’ve learned in M&A, especially from working with Vista, is how to integrate acquired businesses effectively. Many companies say, “We’ll leave you alone for the first two years.” But that approach doesn’t work. I don’t like that, and the team doesn’t like that.

We learned this with Vista: when you go into a business, and you acquire a business, the worst thing you can do is tell people “we're going to leave you alone.” Once you own the business, you see things that you want to change. If you promise not to make changes and then start changing things—like compensation plans or benefits—it breeds mistrust. 

Why are you buying the business if you just want to leave it alone? Now that you own it, you have to be upfront from the beginning that you’re going to change stuff. We learned that in the early days with Vista, because Vista's playbook back in 2012 said you go in and you catalog every single change you want to make in the business and you make it right away.

We learned and then they learned that it’s not always the best thing to do because we make mistakes. So, together with Vista, we calibrated and said maybe we need a period of time to learn about the business. But the first thing you do when you buy the business is be open about the things you’re going to change.

When we acquire a business, we tell the employees: “Congratulations, you’ve been acquired because your business is amazing. You’re joining Bullhorn, which has its own culture and way of working. We want you to learn about our values and integrate into our culture while bringing the strengths of your team.” This sets clear expectations.

We want to be honest about how we’re going to integrate our cultures, because we’re a big company and they are smaller, and our culture will be the one that ends up staying long-term.

We would never hire somebody and say, “Hey, we behave a certain way, but you can behave however you want because you're cool. We hired you. We're going to leave you alone.” 

No, we have behavioral norms, and our employees need to adhere to them. We call those our core values, and they're just behaviors, like responding quickly to customers or giving people the benefit of the doubt, or always doing what you say you're going to do. 

We expect the people we acquire to adopt these cultural norms. We tell people we're going to make change. We evaluate the business for three or four months. And then we say, “Here's our plan. This is what we're going to do. This is what we're going to change. This is what we're going to leave the same.” And people love that. 

They don't love it at first because people hate change, but eventually, they embrace it. Some people leave, and some want to be part of a smaller company. We acknowledge that and do a smooth transition, and maybe even help them find something else if a big company isn’t where they want to work. We need to do that early so we can wrap our head around where people want to stay.

What often happens when you leave an acquired business alone is that the employee experience begins to deteriorate. They’re no longer at a startup; they’re part of a larger organization, but you haven’t taken the time to integrate them properly. 

As a result, the best employees—those with strong prospects and marketable skills—end up leaving because they feel undervalued or disconnected. Meanwhile, the employees who stay are often the ones with fewer opportunities elsewhere, and you don’t even know if they’re the right fit for your organization.

This is why it’s critical to actively engage with the acquired team. You need to get involved, evaluate their strengths, and make them feel like an integral part of your culture. Identify the top performers and show them how much you value their contributions. 

For example, if there’s a VP role open, ask them if they’re interested. That kind of recognition completely changes how they feel—it makes them see themselves as part of something special, rather than just an afterthought in a bigger company.

When you fail to do this, employees feel like the company doesn’t care about them. They think, “We don’t matter. All they do is mess with our bonuses and commission plans at the end of the year.” That’s the worst-case scenario.

It’s about being honest from the start. When you tell employees, "We’re going to leave you alone," it’s simply not true. It’s either a lie—and employees know it, which instantly damages your credibility—or they believe it, and later feel betrayed when changes inevitably happen.

Imagine you say, “Oh, we’re just making one small adjustment,” and two months later you make another. At that point, employees think, “You’ve lost all credibility. I don’t trust you, and I’m leaving.” That’s the outcome you want to avoid. 

Instead, you need to say upfront, “Things will change. We’re not sure exactly what yet, but in three to four months, we’ll have a plan, and we’ll communicate it clearly.” This approach gives people clarity and helps them prepare. 

Even if some don’t like it, at least you know who’s not on board early. Maybe some employees decide they don’t want to work for a larger organization, and that’s fine—it’s better to know sooner rather than later. 

Being transparent allows you to address potential issues before they escalate and reduces unnecessary attrition. By being upfront, you preserve trust and keep more employees engaged in the long term.

Ensuring smooth M&A integration through detailed planning

Integration requires a lot of planning. We track everything we need to do in a database, including the small but critical details that people often overlook. For example, how and when are we cutting over email or Slack? 

Before the acquisition even closes, we plan out the timelines so that on day one, we can clearly communicate to employees: “You’ll be brought into our email platform or Slack on this date, and here’s how it will happen.”

This approach covers everything, from communication tools to the website. For example, we decide in advance if we’ll drape our logo over theirs or just add a small banner at the top. When everything is planned, employees feel more comfortable because it’s clear there’s a thoughtful process in place—not just chaotic, haphazard decisions happening on the fly. 

It also prevents mistakes, like forgetting to update the website, which could lead to a customer calling tech support and asking why there’s no announcement about the acquisition. That kind of oversight erodes trust and makes employees and customers doubt the organization’s competence.

To get this right, you have to put yourself in the shoes of employees, customers, and partners. Think about their questions: Will email systems change? What does this mean for our tools? Are there plans to end-of-life certain products? By anticipating these concerns, you can create frequently asked questions (FAQs) for employees, customers, and customer-facing staff. 

For example, if a customer asks whether their product will be supported, the answer should be clear: “We have no plans to end-of-life this product. In fact, we’re investing more.” That reassures customers and builds confidence, preventing them from immediately considering your competition. 

We also create internal FAQs for employees. When an acquisition happens, they’ll want to know, “What does this mean for us?” If you don’t address these questions proactively, it creates chaos. Leaders end up scrambling to answer questions on the fly, and misinformation can spread. 

For instance, if someone mistakenly tells a customer that a product will be discontinued, it takes hours to clean up that miscommunication when a well-prepared FAQ could have prevented it in seconds. It all comes down to detailed planning and perspective-taking to make something really efficient. 

Integration and risk planning post-LOI

At the LOI stage, we don’t do a lot of integration planning beyond the basics. We focus on building a plan for the first 90 days between signing the LOI and closing the deal. There are things we know we’ll do on day one, like updating websites, issuing press releases, and preparing FAQs.

The first 90 days after closing is when we take a deeper dive. That’s when we assess roles and how they would look if integrated into our business. For example, if they used our support methodology, how would their jobs change? What tools do they use for development? 

Should we migrate them to our toolset, or would it be better to leave them on their existing tools and integrate them another way? We also need to decide who will lead the team and who has experience with their tools.

When it comes to products, if they’re already integrated because they’re a partner, great. If not, we ask how we’re going to integrate the products and who will take ownership of that process.

During diligence, especially post-LOI, we spend a lot of time on the tech stack, code quality, and cybersecurity. Cybersecurity is critical because the moment we close the deal, we’re responsible for protecting customer and employee data.

We need to understand what cyber defenses the company has in place and plan for how we’ll protect that data going forward. Smaller companies are often less sophisticated in this area, so it’s essential to evaluate their approach.

Sometimes, the results raise a red flag that could mean we can’t move forward with the deal. Other times, it’s about creating a clear roadmap to bring the company up to standard. It’s usually a bit of both. 

Best practices for handling overlapping products in M&A

Kill the product and move customers over? I don’t recommend that. Early on, when we were working with Vista, we acquired a product with a lot of overlap with our core offering. I asked if we should kill it because we didn’t want to sell two competing products. Their response was clear: never kill a product.

We had a competitor once that killed a product line that competed with Bullhorn, and it was a huge opportunity for us. We ended up gaining around 70% of their customers because nobody likes being forced to switch software, especially mission-critical tools. 

If your plan is to acquire a business and shut down its product, you’ll lose most of the customers. The best approach is to maintain the product. Keep fixing bugs, stay on top of regulatory updates, and let customers know they’re supported. You can encourage them to migrate to your flagship product, but it has to be their decision. 

You might say, “We’re not forcing you to move, but our intent is to eventually transition customers to this platform. It’s better supported, and we’re actively investing in it.” 

Customers will usually respond by saying, “Your product needs to do X, Y, and Z before I’ll consider migrating.” That’s valuable feedback. Close the gaps quickly and give them confidence that switching will be worth it. Over time, customers will migrate, but they won’t rush for the door.

If competitors are listening, I’d say go ahead and kill the product immediately—force those customers to switch. But realistically, the best practice is to keep the product in maintenance mode. 

Customers understand if you’re not advancing the product but are maintaining it for those who want to stay on it. Especially with SaaS products, where there’s a recurring revenue stream, it makes sense to keep the lights on and transition customers gradually.

You don’t need to heavily invest in R&D to maintain a stable product, unless it has serious issues. The key is to respect the customer’s choice, maintain their trust, and provide a smooth path to your preferred platform when they’re ready.

First M&A deal with Vista

The first M&A deal we did with Vista was actually two companies at once—Sendouts and MaxHire. We announced both acquisitions on the same day, and they were competitors. That competitive dynamic made it an exciting and complex deal. 

During negotiations, I would hint to each company that we might do a deal with the other. For example, I’d say, “You probably wouldn’t like to read a press release about us partnering with them.”

At one point, Vista suggested, “Why don’t we just do both deals?” That shifted the conversation from considering one company to bringing all three of us together. It was a complex negotiation, but it worked out really well. 

Both CEOs loved the idea of combining the companies, and their employees were excited about no longer having to compete with each other. The negotiation itself was shuttle diplomacy. 

I’d meet with one CEO and say, “Here’s what we’re thinking, and here’s what it could look like. By the way, I’m also talking to the other company, and together, the three of us could do something really great.” Employees responded positively, saying things like, “We’ve hated competing with them—this could be amazing if we combine forces.”

Even customers liked the idea of these three companies coming together to create the best possible solution. Of course, not all customers were thrilled if their preferred product didn’t come out on top, but overall, it worked out well. We took the best features of all three products, merged them into one, and created something truly great.

This deal was an interesting one. All three companies—Sendouts, MaxHire, and Bullhorn—had built their original flagship products around the same time in 2000-2003, and all competed in the same market. 

Bullhorn was the largest, but we all faced the same challenge: we had built on outdated technology. Bullhorn had used ColdFusion, while Sendouts and MaxHire had built on .NET smart clients, which required desktop installations.

Our browser-based approach gave us an advantage, which is why we ended up being the biggest, but we still needed to update our backend. Meanwhile, their smart client products had some features and speed advantages over ours. 

They knew they would have to invest heavily to replatform, and so would we. These were businesses that didn’t want to spend millions of dollars in R&D just to replatform.

We proposed a better path: instead of fighting and investing separately, why not join forces to create one best-of-breed product on a single platform for our combined customers? That vision helped solidify the idea that this was the best way forward.

When we rebuilt the Bullhorn platform, the product lead from Sendouts joined our product team and played a key role in designing the new user interface. MaxHire also had features that customers loved, and we worked with them to figure out how to incorporate those into the new platform. It was truly a combination of strengths from all three companies.

Interestingly, the product lead from Sendouts left Bullhorn a few years later and started a company called HereFish, which built an excellent marketing automation product for the staffing industry. When Herefish hit around $1–1.5 million in revenue, we acquired it, and it has since become one of our most successful acquisitions.

Evaluating deal timing and product-market fit early

Product-market fit is critical. When evaluating a deal, I look at two things: first, what customers say about the product. If I ask a customer what they think, and they just say, "Yeah, it’s good," and can’t tell me what they’d like to see improved, that makes me nervous.

With Herefish, customers told me the product was really good but also pointed out specific areas for improvement: “It needs to fix this, this, and this.” That’s product-market fit. The product was providing real value, and customers were demanding more from it.

They were passionate, almost thumping the table, saying, “It needs to do this!” That’s the signal of a sticky product with a strong future.

That confidence allowed us to buy Herefish at $1.5 million in revenue rather than waiting until it grew to $10 million.

We structured an earnout with Jason, the founder, and told him, “If we can double revenue from $1.5 million to $3 million in the first 18 months, you’ll get the earnout.” We hit that target in just two months. Our sales team sold the product like crazy—it flew off the shelves.

Staying close to core competencies in M&A

The best acquisitions we’ve done are products our customers could use but that we don’t currently sell. These create strong cross-sell opportunities within our existing customer base. For example, we’ve done deals to enter new customer segments or geographies, like the three acquisitions we made in the Netherlands to strengthen our presence there. 

Our core customers are staffing firms. Of the top ten global staffing firms, we service nearly all of them in some capacity. 

Occasionally, we expand into adjacencies, like when we acquired a company that provides executive search software. Executive search is a different business from contingent staffing or permanent placement, but it was a good fit because our existing sales team could cover those accounts. 

Often, these customers were already in our database, just not tagged as executive search. Adding a product for that segment has been very successful for us. 

We also look at deals that target different buyers within our customers, such as CFOs, payroll departments, or compliance teams. These acquisitions work well because they align with our core focus on human capital providers. 

For example, we acquired Texkernel, which provides software to other human capital technology providers. Those companies are now our customers, and it stays within the domain of recruiting and human capital.

What we won’t do is acquire businesses entirely outside our expertise, like companies selling software to manufacturers or hospitals. That’s not our area of focus. We remain committed to contingent labor, executive search, and human capital solutions because that’s where we excel and can deliver the most value.

Expanding internationally with organic growth and M&A

We began expanding internationally in 2008 by sending a team to the UK to open that market. We hired a managing director who is still with us today, and it’s been fantastic.

When we decided to enter mainland Europe, we accelerated the process with M&A. Our first acquisition was a business called Kinexus in the Netherlands. Since then, we’ve acquired two other companies there, including Texkernel, which was the most recent. Now, we have a significant presence in the Netherlands.

But doing business in Europe is very different from the United States. For example, in Europe, there’s something called a works council. You can’t just roll in and make changes, like assigning new sales territories or adjusting compensation plans. You have to go before the works council, which is made up of employees, and consult with them on any personnel or structural changes.

There’s also much stricter regulatory scrutiny, particularly around privacy and other compliance areas. It’s far more complex, and it can be challenging for Americans who aren’t used to operating in that kind of environment.

Why do businesses do it? Because it can generate incredible revenue, income, and profits. But it’s not easy—it’s hard, and it’s very different from how things work in the U.S.

Building relationships in early M&A conversations

I mentioned the managing director who opened our UK office—he now runs corporate development for us. His superpower is building a bond and connection with the selling CEO, whether it’s a founder or someone brought in by investors. He loves deals, but what makes him great is his ability to understand what the other person is trying to achieve.

It’s not always just about the numbers. Sometimes it is—some CEOs are purely focused on hitting their financial targets. But others care deeply about their product, their people, or even how the press release will look. 

You have to navigate those motivations, get inside their head, and think, “If I were them, what would I want out of this deal?” Pete, and our corporate development team in general, are very good at understanding these seller motivations.

Our corporate development team is based in London, including our SVP. Maybe the British accent helps a little—I’m not sure. While we do a lot of domestic deals as well, building this kind of rapport requires a fair amount of face-to-face interaction. You can’t establish that connection or fully understand someone’s drivers without spending time with them in person.

The key is building a strong relationship and understanding the seller’s motivators and goals. That’s what makes these conversations successful.