Decision
Lean toward not selling Megaphone to ZKW. Hold and consolidate: let all writers go except Jacob (stays on Draper only), Blake uses Casper to handle remaining accounts. Wait for SBA loan eligibility next year, which expands buyer pool and could yield a 2-3x higher multiple.
Context
ZKW acquisition process reached add-backs stage. Michael has an August 1st decision deadline. The alternative is: consolidate immediately, margins jump from agency-level (40-50%) to near software margins (80%+), then sell later at a much higher multiple.
Options considered
- Sell now to ZKW: clean exit, no non-compete, cash in bank; lower multiple
- Hold and consolidate: higher eventual multiple, but ongoing lead gen risk and cash flow dependency
- Hybrid: sell the agency side, keep the tooling/IP
Consequences
- Only ongoing risk of holding: continued lead gen must work
- Cap.E (Ben Gusberg) likely churning; downsell play: Casper + Eddie self-serve tier at $49/mo or full team at $200/mo
- Personal factor: Michael planning to buy land and build a house; ongoing cash flow alongside any future lump sum is appealing
- Jacob retained 1-2 months as optionality in case volume spikes
- Cutting Jacob and Austin now could make rehiring hard if volume spikes