Stats
- 20-30 potential deals evaluated weekly
- 45% faster acquisition process due to streamlined due diligence
- 10X growth in revenue for key acquired assets
“Acquiring a business isn’t just about finding the right asset—it’s about navigating the intricacies of due diligence, understanding the DNA of the business, and having the patience to execute a growth strategy effectively. Partnering with WebStreet allowed us to focus on what we do best: identifying and scaling digital assets with immense potential. The 120-day process was intense, but with WebStreet’s support, we turned challenges into opportunities.”
— Andrew Pierno, Co-Founder of XO Capital
Introduction
XO Capital is no stranger to the world of digital acquisitions. Focusing on distressed assets, particularly in the SaaS space, the firm has successfully turned around several businesses by leveraging its deep expertise in software engineering, sales, and growth strategies. Founded by Andrew Pierno and Danny Chu, XO Capital has built a reputation for identifying undervalued digital assets, acquiring them at favorable terms, and scaling them to achieve significant returns.
“Our strategy has evolved over time, but at its core, it’s about identifying something with an initial spark and then bringing rigor around go-to-market, sales engineering, and moving faster than if we started from scratch every time.”
— Pierno
WebStreet, a pioneering platform in the alternative investment space, connects accredited investors with lucrative opportunities in online businesses. By offering a co-investment model, WebStreet allows investors to participate in the growth of digital assets alongside experienced operators like XO Capital.
The partnership between WebStreet and XO Capital represents a powerful synergy, combining XO Capital’s operational expertise with WebStreet’s robust infrastructure and support services. Together, they have navigated the complexities of the digital asset market, enabling investors to reap the benefits of high-growth, cash-flowing online businesses.
The 120-Day Acquisition Framework
1. Fundraising and Strategy Development
The 120-day journey began with the strategic partnership between XO Capital and WebStreet, initiated during a crucial fundraising phase. XO Capital had just completed a successful acquisition and was looking to scale its operations by raising a larger fund. The timing of WebStreet’s outreach couldn’t have been better.
“WebStreet reached out while we were fundraising and effectively said, ‘Hey, you don’t have to worry about the fundraising—we’ve got that. Do you want to just come deploy with us and partner with us to go buy something together?'”
– Pierno
This offer not only provided the capital needed for the next acquisition but also brought invaluable support in deal sourcing and due diligence, allowing XO Capital to focus on what they do best: finding and scaling high-potential digital assets.
2. Deal Sourcing and Screening
With the partnership in place, XO Capital embarked on an intensive search for the right acquisition. The goal was clear: identify a digital asset with strong fundamentals and the potential for significant growth. XO Capital’s team utilized a combination of cold emailing, content-driven inbound strategies, and deep market research to source potential deals. On average, the team evaluated 20 to 30 deals each week, quickly filtering through opportunities to identify those that met their strict criteria.
“We quickly need to get to a yes or no because we also have to spend 30 to 45 days going into the weeds on what the founders missed, how we think we can grow it, and why these people in this business for the past three years have failed enough to sell the business to us.”
– Pierno
This rigorous screening process ensured that only the most promising opportunities made it to the next stage.
3. Due Diligence Process
Once a potential acquisition was identified, the next step was a thorough due diligence process. For XO Capital, this meant conducting a “full, sort of, blood workup” of the target business, analyzing every aspect, from financial performance to customer retention rates. Given the digital nature of the assets, traditional due diligence methods had to be adapted. XO Capital and WebStreet worked closely to close the information gap, often operating with a significant amount of information asymmetry.
WebStreet played a crucial role here, offering legal and financial diligence support that helped mitigate risks and protect against potential pitfalls.
4. Decision-Making and Finalization
After weeks of careful evaluation and negotiation, XO Capital identified “OnSched” as the ideal acquisition target. This SaaS product, designed for developers creating complex scheduling applications, met all the criteria set by XO Capital: strong retention, high customer satisfaction, and significant growth potential.
“We just acquired OnSched. It’s a scheduling tool for developers…an extremely sticky product with excellent retention,”
– Pierno
The final stages of the acquisition involved intensive negotiations, where WebStreet’s experience once again proved invaluable. With the deal closed XO Capital was ready to move into the execution phase, armed with a solid acquisition and a clear plan for growth.
Execution and Integration Post-Acquisition
With the acquisition of OnSched finalized, XO Capital immediately shifted focus to the execution of their post-acquisition strategy. The first step was to integrate OnSched into XO Capital’s existing portfolio and begin executing the growth plan meticulously developed during the due diligence phase. The product’s inherent strengths, such as its high retention rate and sticky nature, made it a prime candidate for XO Capital’s tried-and-true approach to long-term growth and stability.
“The name of our game is really all about retention.”
– Pierno
XO Capital’s strategy was clear: build on OnSched’s solid foundation while identifying and implementing opportunities for growth.
Operational Focus
A key component of XO Capital’s operational focus post-acquisition was the emphasis on consistency and patience. The team was well aware that the success of OnSched would hinge not only on growth but on the ability to execute fundamental business practices consistently over time.
“What we’ve gotten really good at is doing the boring stuff for an absurdly long time and just not getting fatigued.”
– Pierno
This approach involved doubling down on what worked—whether it was running effective Google Ads, maintaining a strong content strategy, or leveraging sales-led growth to attract and retain customers.
Support from WebStreet
Throughout the execution phase, WebStreet continued to play a critical role in supporting XO Capital’s efforts. From handling the backend operations to providing strategic advice on legal and financial matters, WebStreet’s involvement allowed XO Capital to focus on the core aspects of growing OnSched.
“WebStreet’s been a great partner for us, on the back end side, on the diligence side, in bookkeeping, and in setting stuff up. It allows us to really just focus on what we do best, which is the operations and finding deals.”
– Pierno
This partnership not only streamlined the integration process but also provided a safety net, ensuring that any potential issues were addressed promptly and effectively.
Early Wins and Continued Growth
The immediate post-acquisition period also saw several early wins for XO Capital and OnSched. By maintaining a clear focus on customer retention and operational efficiency, the team was able to achieve incremental growth quickly. One of the key factors behind this success was XO Capital’s ability to remain patient and allow the business to grow at a sustainable pace.
Conclusion
The 120-day journey from due diligence to deal closure is a testament to the power of strategic partnerships and disciplined execution. XO Capital, with its deep expertise in digital asset acquisition, and WebStreet, with its robust support system, successfully navigated the complexities of the acquisition process to secure a high-potential asset in OnSched.
The success of the OnSched acquisition has solidified the partnership between XO Capital and WebStreet, paving the way for future collaborations. The combination of XO Capital’s operational expertise and WebStreet’s strategic support has also proven to be a powerful formula for identifying, acquiring, and scaling digital businesses.
“As long as they’ll let us, we’d like to keep buying businesses with these guys. It’s been a great experience so far.”
– Pierno
Looking ahead, XO Capital and WebStreet are well-positioned to continue their shared mission of transforming undervalued digital assets into profitable, high-growth businesses, benefiting their investors.
Ready to invest in high-growth digital assets with a trusted partner? Join WebStreet today and gain access to exclusive opportunities alongside experienced operators