Builtfirst CEO Aaron Bailey on navigating the M&A process

In May 2024 AppDirect announced the acquisition of Builtfirst, a leading partner marketplace platform. As M&A advisor, NextPath helped Builtfirst navigate the entire process. Nearly 6 months in, we asked Aaron Bailey, CEO and Co-Founder of Builtfirst, to reflect on the process of selling the company.

Tell us a bit about Builtfirst.

Aaron: Builtfirst is a no-code partner marketplace platform, creating the largest ecosystem of partner marketplaces that any B2B company can go-to-market through. The $1.5T in IT spend that is sold through B2B marketplaces today is forecasted to double to $3T by the end of the decade.  Thousands of software and service providers around the world leverage Builtfirst partner marketplaces to reach new customers. 

What were the primary strategic reasons behind deciding to sell the company?

Aaron: The holy grail for Builtfirst was enabling commerce in our marketplaces. AppDirect had already spent a decade building a robust subscription commerce platform to make it easy to turn on merchant-of-record in any of our marketplaces. This enables not just a one-time payment for the marketplace owner, but an ongoing cut of the solutions they sell for the lifetime of the customer. 

We really focused the M&A process on finding ‘better together’ opportunities where we could accelerate partner marketplaces. The mutual visions and distribution advantage between AppDirect and Builtfirst compelled us to explore something deeper than a strategic partnership.

Multiple companies were interested in Builtfirst. What factors did you consider when selecting the buyer?

Aaron: Selecting the right buyer involves more than just the deal value. Acquisition experience is key, as a buyer with a proven track record can ensure a smoother transition and growth. Founder friendliness and culture fit matter too, as we wanted an alignment with our values. Lastly we evaluated each buyer’s potential to offer strategic growth and operational opportunities, both to enhance our solution and market reach. Of the several interested buyers, AppDirect was the strongest fit.

What was the biggest value of using an M&A advisory firm?

Aaron: We looked at several factors.  We wanted an advisor with relevant experience and connections in B2B SaaS who could identify strategic buyers more effectively and understand the unique challenges and opportunities we face. Having a strong pulse on current market terms and multiples specific to our situation helps set realistic valuation expectations and deal structure. A great advisor not only provides insights into the market but also balances optimism with realism, helping founders stay grounded while navigating complex emotional and business decisions.

As experienced enterprise tech CEOs with many successful exits, the NextPath team met the above criteria, and most importantly they felt like a trusted part of our team helping us navigate the entire process.

What advice or lessons learned would you give to other CEOs considering selling their companies?

Aaron: It would be very circumstantial. Selling a company can be very emotionally difficult and it can be very challenging to be rational at times. Surrounding yourself with a good team of folks who are supportive of the path you’ve chosen, who’ve been through this before, outside of your org, is probably the #1 most important thing you can do.

Builtfirst seems like a great addition to AppDirect, what’s new and exciting as you move into the future?

Aaron: The team came over to AppDirect to win, and we’ve actually ended up finding a ton of new opportunities we didn’t initially see. They’ve kept us as a separate brand and team in order to preserve our culture and agility as a startup. It’s really been an amazing experience.

More about Builtfirst and AppDirect.