Stats
- 3x growth in portfolio value within 12 months
- 2x increase in deal flow efficiency
- 50% reduction in legal risks during acquisitions
“When we first started acquiring digital businesses, it was all about experimenting—testing the waters to see what worked. But as we grew and honed our strategy, we realized the potential was far greater than we ever imagined. Partnering with WebStreet allowed us to focus on what we do best: finding and growing great companies. Their support has been invaluable, particularly in handling the complexities of acquisitions, which lets us focus on scaling and creating value.”
– Andrew Pierno, Co-Founder of XO Capital and WebStreet Portfolio Manager
Introduction
XO Capital, a firm known for its strategic acquisitions and innovative approach, has positioned itself as a leader in the digital asset space. Founded by Andrew Pierno and Danny Chu and focusing on distressed venture-backed companies, XO Capital has developed a unique methodology for turning struggling businesses into profitable ventures.
The collaboration between XO Capital and WebStreet began during a pivotal time for XO Capital, as they were exploring ways to scale their operations and expand their portfolio. WebStreet’s proposition was simple yet powerful: provide the capital and back-end support needed, allowing XO Capital to focus on the acquisition and growth of digital assets.
“When we first started, it was about experimenting—testing the waters. But as we grew, we realized the potential was far greater. Partnering with WebStreet allowed us to hone in on what we do best: finding and scaling great companies.”
– Andrew Pierno
This partnership has since proven to be a game-changer, enabling XO Capital to experience a 2x increase in deal flow efficiency, secure better deals, and reduce the risks traditionally associated with digital business acquisitions. Together, they have set a new standard in the digital asset investment space, creating a blueprint for success that leverages the strengths of both firms.
The Acquisition Process
The journey to a successful acquisition begins with identifying the right opportunities. For XO Capital, this process is both an art and a science, blending data-driven analysis with deep industry knowledge. In their recent acquisition of the SaaS product OnSched, the team was not just looking for any business—they were searching for a digital asset with strong retention, scalable potential, and an existing customer base that could be nurtured and expanded.
Andrew Pierno, Co-Founder of XO Capital, emphasized the importance of this phase:
“What’s most interesting about the past 24 months is the emergence of marketplaces that allow these digital assets to trade. These assets, which were once buried in someone’s portfolio, are now accessible, and there’s market pricing for them, which is really interesting.”
Initial Contact and Negotiation
Once a potential acquisition is identified, the negotiation process begins. For OnSched, the initial contact came through XO Capital’s content strategy, which generated inbound interest from the SaaS product’s founders. This approach was complemented by XO Capital’s proactive outreach, cold emailing potential sellers to create a steady pipeline of opportunities.
However, negotiating a deal is far from straightforward. It requires a delicate balance of securing favorable terms while maintaining a positive relationship with the seller. XO Capital’s partnership with WebStreet proved invaluable in this phase.
“What we realized is 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 just focus on what we do best, which is the operations and in finding deals.”
– Pierno
Due Diligence and Risk Assessment
The due diligence process is a critical step in any acquisition, and for XO Capital, it’s where the real work begins. This phase involves a comprehensive analysis of the target business’s financial health, product capabilities, and market potential. Pierno explained,
“You are trying to do a full sort of blood workup of exactly what the DNA of this business consists of. Can we grow it? How are we going to grow it? What’s the current state of the business?”
WebStreet also played a pivotal role in this process, bringing their legal and financial due diligence expertise to the table. In the past, XO Capital had relied on off-the-shelf legal documents, which led to some challenging situations. However, with WebStreet’s involvement, the process was much more robust, resulting in a 50% reduction in legal risks.
Closing the Deal
The final step in the acquisition process is closing the deal. For XO Capital and WebStreet, this involved not just signing the contract but also ensuring a smooth transition of ownership.
“In this particular transaction that we just went through with WebStreet, they did a fantastic job of mitigating both downside risk and some of the sort of worst-case scenarios,”
– Pierno
Impact and Results
The acquisition of OnSched marked a significant milestone for XO Capital and WebStreet, demonstrating the power of their strategic partnership. Within the first year of integrating OnSched into its portfolio, XO Capital experienced remarkable growth. The combination of strong customer retention, an effective content strategy, and targeted operational improvements led to a 3x growth in portfolio value.
Looking ahead, the future for OnSched and XO Capital appears bright. The SaaS product’s sticky nature and high retention rates suggest that it will continue to perform well in the coming years. The collaboration with WebStreet has also opened doors to more opportunities, with XO Capital eager to continue the partnership.
“WebStreet really helped us in negotiations, and as long as they let us, we’d like to keep buying online businesses with them. It’s been a great experience so far.”
– Pierno
Conclusion
The acquisition of OnSched represents more than just a successful deal for XO Capital and WebStreet—it exemplifies the power of strategic partnerships in navigating the complex world of online business investments. Through a combination of methodical due diligence, disciplined operational strategies, and a shared commitment to long-term growth, XO Capital and WebStreet have turned a distressed asset into a profitable venture and laid the groundwork for continued success.
This collaboration has proven to be a win-win, with both parties benefiting from their complementary strengths. XO Capital’s expertise in identifying and scaling digital businesses, combined with WebStreet’s robust financial backing and operational support, has created a powerful synergy that sets them apart in the alternative investment space.
Looking forward, the success of the OnSched acquisition is just the beginning. With plans from both to continue expanding their portfolios and capitalizing on new opportunities, XO Capital and WebStreet are poised to make even greater strides in the digital asset market. As Pierno succinctly put it,
“We’re doing a lot of the small things for a very long time, and it doesn’t have to be complicated. With the right partners and the right strategy, the results speak for themselves.”
Are you ready to take your investment portfolio to the next level? Join the ranks of savvy investors who are partnering with WebStreet to unlock the potential of digital assets.