How I built my startup and got it acquired 6 years later

I founded my first startup in the summer of 2015 and got it acquired 6 years later.

AirCourts was a booking app and software provider for sports, with 350 customers (B2B) and 500k users in 3 countries. The company was capital efficient, profitable and had exceptionally low burn with 6 people.

We got acquired because we were the category leader (booking platform for sports) and because we were an attractive target for a major competitor looking to penetrate our home market.

Now that I’ve had some time to reflect on my first exit, I decided to put my thoughts down.

Hopefully the learnings I went through can be helpful to other founders going through a similar adventure!

1. The idea

“Be the change you wish to see in the world” - for me, it was sports.

Playing sports has always been a primary source of inspiration and joy.

Back in 2014, I was playing tennis every other week and kept bumping into a recurrent problem - booking a court was hard.

I had to call several clubs, asking the same questions over and over, just to book a time to play. The process was tedious and time-consuming.

So, it got me thinking — why isn’t there an app to book tennis courts?

After deep research, I realised there was no app like it in the market.

It looked like a huge opportunity and I got totally obsessed about solving this problem, so I decided to go ahead and build it myself.

2. Building a prototype

Even though I had studied computer science in university, I had no idea how to build an app. At the time, I was working for an energy company and had no prior experience in tech.

I also didn't have enough savings to hire a developer, so I turned to upwork.com, a freelancing platform.

Hiring a developer overseas came with a huge price discount, so I decided to give it a try and hired a guy from Bangladesh at a very reasonable price (less than €5k).

Nine months later, my v1 was ready!

The product was very simple: a platform for clubs to manage their available times and register bookings. I started interviewing the first clubs and signed around 10 customers in 3 months.

To my surprise, they were very tolerant to bugs and flaws.

The good thing about disrupting an industry is that customers tend to be more forgiving with your product, as there's nothing else to compare it to.

With 10 clubs using the platform, I started building the second part of the product: the booking app for the players. This is when things started to get trickier.

I underestimated how tough it would be to create a marketplace product and failed to set realistic deadlines, which led to project delays.

While I was trying to get my freelancer to dedicate as much time as possible to my project, he was optimising for "how many clients I can work at the same time”.

On a desperate attempt to speed things up, I started learning HTML and CSS to help with the "design side" of things but quickly realize this was not a very efficient use of my time and the results weren’t that great either.

Learning #1: If you're considering outsourcing your prototype and hiring a freelancer, begin by finding someone who can help you with requirements, deadlines, and costs, ideally a product manager or a founder.

3. Raising money

I was frustrated with the slow pace of things and realised the only way to pull this off was to raise money and build a team.

I got in touch with a friend who was working at a VC-backed startup, and he introduced me to some investors. A few weeks later, I was on a plane to London.

When I began meeting with investors, all I had was a functional prototype, plus a dozen clubs using the platform and a spreadsheet with overly optimistic revenue projections. The first meetings were kind of terrible. I was nervous and felt I was punching above my weight. After all, I didn't have any previous experience raising capital and pitching to VCs.

Eventually I got better over time, but the main problem was lack of traction. I didn't have enough customers and revenue to convince any VC, and being a first-time founder from Portugal (small market) made it even harder.

In the end I almost got a fund to invest, but they backed out last minute because "too much uncertainty".

I returned home empty-handed, but I wasn't ready to quit.

Back to Portugal, I reached out to a group of business angels, and after several meetings, I convinced one to invest €100k. This small investment changed my life and I will be forever grateful to this person.

While this funding round wasn't enough to launch AirCourts in a big city like London, it would allow me to hire a small team and expand within our home market.

The plan was simple: take over the Portuguese market, find a sustainable business model, and prepare for international expansion.

Learning #2: Unless you've made money for investors, your idea is worth 0. Traction is the only true currency for VCs.

4. Conquering our home market

My first hire was an entrepreneur who had previously led sales at Foodpanda.com, a food marketplace owned by Rocket Internet.

I convinced him to join me by offering him a generous equity package. We became partners, and ever since, he played a crucial role in building AirCourts.

As a solo founder, it was crucial for me to have a high-caliber profile to help me assemble the team and bringing my vision to life. He became my "late co-founder" and stayed with me until the very end, going through all the ups and downs. Today, I'm lucky to call him a friend.

Here's some typical advice - talent is hard to find and harder to hire but it's the most important part of your business, mostly when you're starting up, so put all your efforts there. If you can't afford to pay high salaries, I recommend you try this.

With a small team in place, things started moving faster.

We improved the product, signed 50 customers and launched two cities: Lisbon and Porto.

Within a year we launched 10 more cities, using the same playbook:

• Step 1 - Identify the most popular clubs in the area (we called them "anchor clubs" because once they joined, others followed suit).
• Step 2 - Convince them to switch from pen-and-paper to our platform.
• Step 3 - Notify all the players in the area.

As we added more clubs, more players joined in, and this led to more bookings and increased revenues for the clubs and for us.

Our way of making money was through software subscriptions and booking commissions:

• Monthly fee for the software, priced at €100
• Small commission fee (<5%) for each booking paid through the app

This business model is called "SaaS-enabled marketplace" and consists on generating revenues from software subscriptions (usually the supply side) and commissions from transactions (usually the demand side). We copied it from Opentable, a marketplace that connects diners and restaurants.

Within three years we made a decent dent on the market, signing over 350 clubs and hitting €1 million in monthly GMV (Gross Merchandise Volume). We also became profitable and reached €40k in MRR.

5. Growing pains

By the time we conquered our home market, three years had passed. It was time to expand.

We began our international expansion by identifying two countries and started contacting prospects through cold calls and emails.

Despite our efforts, we couldn't sign more than 1-2 clubs per month.

The main problem was that clubs weren't used to buying software online and had difficulties adopting our platform.

In our home market, we could easily tackle this by visiting them and assisting with the onboarding. However, doing this remotely wasn't feasible.

To enter new markets, we would need to establish a local sales team.

That's when reality smacked me in the face:

• We were selling a €100/month service, using a high-touch sales model.

In other words, our sales model was not scalable.

In the context of SaaS (Software as a Service), "touch" refers to the amount of human interaction required for customers to buy and adopt your product. A high-touch model requires personalised demos and customised onboarding. This always comes with higher cost and longer sales cycles.

The combination of having a product priced at €100/month and a sales model that required building local sales teams, made me realize we'd fell into the dead zone.

The dead zone is where you have the sales friction of an enterprise deal but the deal sizes are on the SMB (small and midsize business) band. Such models quickly hit a scalability wall even if they show initial promise. That's exactly what happened to us.

We had been very successful in our home market because we provided training and onboarding using a high-touch model, but this ended up trapping us.

The only way of getting out of the dead zone, would be to remove friction from our sales process.

But how could we achieve this?

The solution - simplifying our product to the point where any customer could easily adopt it with minimal assistance from our team.

This strategy is most known as product-led growth and consists on lowering sales friction by making the product very easy to be discovered and adopted.

We decided to go this way and began changing our product.

But it wasn't a walk in the park.

The main problem was that our software began as a simple reservation system, but over time, it became more complex. To meet the demands of our largest customers, we had to develop more features, which made the product more challenging to adopt and to use.

This transformation process became a huge undertaking, and for the first time in four years since starting the company, I felt my motivation waning.

Learning #3: One of the crucial decisions you must make as an early-stage founder is to align your Go-to-market (GTM) strategy (how you take your product to market) with deal size. Failing to do so might result in building a product for which there is no optional GTM strategy.

6. Selling

While we were busy transforming our product and moving into a product-led growth model, our biggest competitor - a company based in Spain - raised their Series B (€60m) and their CEO reached out soon after.

He planned to use the latest funding to strengthen his position in the market and buy out some competitors.

We had known each other for some time and had even exchanged progress and metrics. He was well aware of our performance and how AirCourts was doing.

A few weeks later I was on a plane to Madrid and came back with an offer.

Learning #4: Building a relationship with a potential acquirer early on is an excellent way to fast-track discussions and kickstart a negotiation process.

Joining forces with the biggest competitor seemed like a good way to solve our expansion problems. They were coming from a bigger market (Spain is 5x Portugal) and had already expanded to 30 countries (while we were only present in 3). Plus, this funding round would reinforce their position in the US, UK, Italy and Sweden, some of the biggest markets for Tennis and Padel.

If we turned down the deal and chose to compete, we'd have to raise more funds to speed up our transformation to a product-led growth model. Not only that, but we would also face tough competition on the markets where they were already operating and growing stronger.

Joining forces seemed like the best path for achieving faster growth.

I discussed the deal with my board and asked my two investors for their thoughts on it. We all decided to proceed with the deal.

My biggest concern was to ensure the company's continuity and to find a suitable place for the team to continue working and growing their careers. I also wanted our customers to continue benefiting from our service, which had become vital to their business. I believe that many founders can relate.

But the deal didn't close right away, it took some time.

There were some long debates around valuation and deal structure, and at one point, it nearly fell apart.

I knew that continuing the talks with them would likely lead to failure. Instead, I had to get other potential buyers interested and initiate a competitive bidding process with the main goal of generating FOMO (Fear of Missing Out).

So, I did just that.

How to pull off a bidding process out of thin air 🤹

• Step 1: List your potential buyers. I started putting together a list of prospective buyers. The list was made of other startups in the space and some established software companies operating in adjacent markets.
• Step 2: Fine tune the message. Crafting the perfect email requires time and dedication. I tried to make it as straightforward as possible (check below).

• Step 3: Create FOMO. I highlighted the fact that I needed to make this M&A as short as possible, not only because we had an offer on the table but also because I wanted to avoid bringing unnecessary distractions to the team. The key point here is to create urgency without sounding desperate. Easier said than done :)
• Step 4: Keep the ball rolling. Buyers typically ask for an exclusivity period to conduct due diligence and review numbers. Avoiding a long exclusivity period is crucial to protect the bidding process. Being honest about having another offer on the table helped me secure favourable terms.

Within a few weeks, I had two companies showing interest to partner up and potentially do M&A. One in Europe and the other in the US.

With these two potential buyers in play, I returned to the initial buyer and resumed discussions. This time I had leverage, therefore I was able to impose urgency.

A few days later, we finally received a Letter of Intent (LOI).

From the time we received this LOI to the final asset transfer date, the process took around 4 months. I spent a lot of time discussing the terms with the CEO and his legal teams. During this time, I had to learn many new concepts from scratch: earn-outs, put & call option agreements, warranties, escrow accounts, and many other gotchas that I knew nothing about. 

Learning #5: If you have just one potential buyer, consider creating a bidding process to gain leverage on negotiations.

This period was emotionally tough for me. I was very fortunate to have a great lawyer and friend to share my doubts with. This person also happens to be my wife and I'm incredibly thankful to her for keeping me moving forward.

It took quite a bit of time to go through all the stages but once we all agreed on the terms, we finally sat down and signed the deal!

The closing day was super intense, like a Mexican standoff in one of those wild Western movies.

On one side, the lawyers from the buying side, collecting signatures and reviewing documents. On the other side, my lawyer and I, going through the same documents and conducting the same reviews.

After everyone in the room gave their final OK, we signed the deal and began wiring the payments.

I had to make sure everyone on the cap table got paid accurately, including investors, employees and myself.

Making sure everyone gets paid is something that CEOs should personally inspect and confirm. Processing many wire transfers often comes with issues, so it's important to follow up with everyone and confirm they received the correct amount.

As soon as the deal was sealed and everyone got their payments, the first thing I did was celebrate and go on a well-deserved vacation with my wife.

After my exit, I instantly felt more relieved and calm. The immense pressure that came with going through all the stages of selling my company took a toll on me.

Being a solo founder made this even more challenging because I had to manage every aspect of the acquisition while keeping the business running and the team motivated.

7. Life post-acquisition

As part of the deal, I agreed to help the buyer with the migration and was made responsible for integrating the two companies and transferring our customer base. On paper, this would take no less than one year to complete.

The first step was to make sure the team was motivated, so I set out an incentive plan (bonuses) and aligned everyone with the migration goals.

Next, I sat down with the CTO and mapped out the integration of our technology and product. We established a deadline and immediately started working towards it.

Everything was moving swiftly until the company decided to go on an acquisition spree, purchasing five other startups within two years, which resulted in substantial delays in product development.

This was a major issue for me and the team because a significant portion of our earn-outs depended on integrating the product and transferring our customer base.

Fortunately, our lawyer suggested including an earn-out acceleration clause in our agreement, just in case something like this happened.

An acceleration clause grants you immediate payment rights on the occurrence of certain events that are agreed between the buyer and the seller.

If it wasn't for this clause we likely wouldn't have been able to receive our earn-outs.

Here's some common advice regarding earn-outs: always avoid including goals and metrics that are beyond your control. I often hear this a lot from lawyers and M&A advisors.

Learning #6: Migrations can take a lot of time, so be prepared to be hit with unexpected challenges. If you have an earn-outs clause, make sure not to include any objectives that are beyond your control.

The migration was supposed to take one year but ended up taking nearly three.

During this time I took over other responsibilities within the company, moved to a different city and continent (Singapore) and ended up sticking around for a lot longer than I planned. 

As I look back on my time with the company, I feel lucky to have worked with 180 talented colleagues and to have been a part of the company's growth, taking it from €5 million to almost €20 million in annual revenues.

What a great and unexpected journey it turned out to be.

I'm still getting used to life post-acquisition, and I'm not sure what my next adventure will be.

One thing's for sure, I already miss the adrenaline of being an entrepreneur! That sense of being motivated to give it your all to solve a problem that you really care about... that's something truly special.

Maybe I’m an entrepreneur for life?

I guess I'll have to find out! :)

If you have gone through this journey yourself and have a story to share, I’d love to hear it! Please shoot me a PM.