Acquiring Minds – Episode Summary

Podcast: Acquiring Minds
Host: Will Smith
Episode: Buying for $600k, Selling for $35m
Guest: Jake Bittner, former CEO & Co-Owner of Clarion
Date: December 1, 2025

Episode Overview

This episode features Jake Bittner’s extraordinary journey: buying an unprofitable government-focused data analytics business for ~$600K and growing it into a high-margin company that ultimately sold for $35 million a decade later. Jake discusses his approach to risk mitigation, the gritty early years, key strategic pivots, and hard-earned lessons in both acquisition and exit. He also shares tactical advice for would-be entrepreneurs—especially those eyeing the “govtech” sector.

Guest Background

• Jake Bittner: Grew up in St. Louis; Yale grad (engineering).
• Built a career in enterprise software sales, primarily selling data analytics solutions to government agencies.
• Family roots in entrepreneurship, but learned caution from witnessing his father's struggles and health decline due to entrepreneurial stress.
• Prioritized developing sales skills and accumulating a financial cushion before venturing out.

Key Discussion Points & Insights

1. Mitigating Risk in Entrepreneurship

[07:35]

• Jake’s views shaped by his father’s failed ventures (and personal health consequences).
• “People look at entrepreneurs as risk-takers, but in reality, entrepreneurs hate risk. They actually are just better at mitigating risk than anybody else.” – Jake Bittner ([08:50])
• Built a substantial nest egg and made career moves to acquire relevant skills before buying a business.

2. Transition from Corporate to Acquisition

[16:12]

• After seeing culture shift at SAP post-acquisition, Jake hit “an inflection point” and decided to pursue entrepreneurship.
• Originally intended to build from scratch, but a former colleague presented a unique carve-out acquisition opportunity.

3. The Acquisition: A Losing Business

[22:32]

• Purchased a money-losing carve-out for ~$600–$700K via 100% seller financing.
• Value discovered not in earnings, but in government contract vehicles (like GSA schedules), historical performance, references, and a viable delivery team.
• “There was a reason to buy the business…but it also had to be a fair number for us and fair terms.” – Jake ([27:45])

4. The Scrappy Startup Phase

[36:23]

• Tiny team (Adam, Jake, and few staff; both co-owners heavily involved in delivery & sales)
• Scrambled for survival, taking any analytics-related staffing contract regardless of margin or fit: “We were putting butts in seats… basically selling resumes, staffing.” – Jake ([37:55])
• Plagued by employee churn, loyalty issues, and constant operational headaches. Wild employee stories abound ([39:57]).

5. The Strategic Pivot: From Staffing to Programs

[44:52]

• Realized that winning new contracts was just keeping them afloat due to offsetting client losses—“sticking your finger in the dam every day and never really getting ahead.”
• Found inspiration in one client (City of Boston) where they delivered high-value, multi-year analytics programs at much higher margins (60%+ vs. 20-30% for staffing).
• “We were really helping them build an analytics program…transforming the way the whole organization thought about and used analytics.” – Jake ([43:23])
• Adopted frameworks (e.g., Jim Collins’ “hedgehog concept”) to focus on what drove passion, profits, and differentiated value.

6. Scaling & Growth

[49:46]

• Narrowed focus: only sought long-term, high-value program work.
• Systematized processes, tracked metrics like customer retention (rising to 90%) and dollar retention, converted projects to multi-year programs.
• “Once you declare what you do and don’t do, it makes other decisions much clearer and you can delegate. That allowed us to push clarity down in the org and finally work ON, not IN the business.” – Jake ([49:50])
• Growth took off: company revenue grew from ~$3M to over $20M.
• Worked in attractive public sector verticals, won industry awards (notably for COVID-19 and opioid data platforms).

7. Exit: The $35 Million Sale

[60:00]

• COVID increased demand: governments leaned on trusted partners for urgent analytics.
• Attracted multiple acquirers, ultimately sold to a strategic buyer for $35M (approx. 11x EBITDA).
• Reluctant to sell—company atmosphere was enjoyable and profitable. Advisors convinced him of market timing (interest rates low, valuations likely to fall).
• Deal structure: ~$18M cash up front, $12M earn-out, $5M rollover equity ([71:29]).
• Earn-out was delayed as buyer faced financial constraints (an independent sponsor, not a traditional PE fund), but was eventually paid.

8. Lessons Learned on Exit & Earn-outs

[79:11]

• Independent sponsors (deal-by-deal investors) don't have funds to bail out portfolio cos.
• “If something were to go wrong…an independent sponsor doesn’t have a bucket of money to reach back into to help solve problems.” – Jake ([79:11])
• Earn-out structuring can be precarious—consider negotiating for more upfront cash if possible, especially with rich multiples.

9. Life Post-Exit and Giving Back

[93:58]

• Investing in ETA/search deals (especially government/defense).
• Now coaching entrepreneurs and searchers: focuses on risk mitigation, team-building, and accelerating the “figuring it out” phase.
• “How quickly do you want to figure some of those things out and get on to working on growth? That’s what a coach can help with.” – Jake ([96:34])
• Jake’s coaching website: Bitner Performance Group.

10. Why GovTech is an Opportunity

[84:26], [87:24]

• “Growth can be very significant…once you win a $200K contract, you’re qualified to go after $400K, then $600K, and so on.”
• Government is accustomed to working with small firms (unlike enterprise customers in the private sector).
• Multi-year contracts, mission-driven work, and meaningful impact for employees.

Notable Quotes & Moments

• Entrepreneurs are risk mitigators:
  “People look at entrepreneurs as risk-takers, but in reality, entrepreneurs hate risk…if you can develop the skills and, in my case also, felt like building the nest egg…then it’s not as risky.” – Jake ([08:50])

• About staffing-model headaches:
  “Every day was like sticking your finger into the holes of a dam and trying to keep things together.” – Jake ([41:01])

• On finding product-market fit:
  “Once we started to focus on these programs and started to win some with our new model and message, soon customers were with us again and again, and the growth started to take off.” – Jake ([49:50])

• On rejecting broad opportunity for focus:
  “Entrepreneurs have a tendency to want to go after all those things…you’re far more successful staying focused on what you do.” – Jake ([55:10])

• On negotiating the sale:
  “The best strategic option…is to have the ability to walk away. We weren’t desperate to sell.” – Jake ([61:56])

• Post-acquisition headaches:
  “I was prepared to work on the business…here we are back to large company bureaucracy, processes that made no sense, but we did them anyway.” – ([73:58])

Key Timestamps of Interest

• Jake’s Background, Sales as Core Entrepreneur Skill: [04:31]–[07:35]
• Risk Mitigation, Lessons from Father: [07:35]–[09:51]
• Building a Nest Egg, Early Career: [11:46]–[13:50]
• Acquisition Story Begins (Carve-Out Context): [18:58]–[23:46]
• How to Value a Money-Losing Business: [25:30]–[27:45]
• Deal Terms (Seller Financing): [29:10]–[30:33]
• Early Survival Tactics, Staffing Woes: [37:04]–[41:17]
• The Pivot to High-Value Programs: [44:52]–[49:50]
• Scaling, Customer Retention/Recurring Revenue: [49:50]–[54:19]
• Exit, Acquisition Mechanics & Dynamics: [59:18]–[68:45]
• Earn-out Risks & Independent Sponsor Limitation: [79:11]–[80:30]
• Post-Exit Coaching and Investing: [93:58]–[95:51]
• Final Lessons for Searchers & Entrepreneurs: [96:00]–end

Final Takeaways

• Risk Mitigation is as important as risk-taking—financial runway, relevant experience, and the right partner/spouse create the foundation.
• Acquisition can be a better starting path than building if there’s intrinsic platform value, even in unprofitable businesses.
• Relentless focus on high-value, repeatable work leads to scalable growth and more attractive exits.
• Be wary of deal structure and acquirer type—earn-outs and independent sponsors add unique risks.
• Industry domain expertise is a major accelerator; knowledge mitigates the risks of searcher “business fit.”
• Govtech is an underappreciated, high-growth sector for searchers, with outsized contract values, high mission alignment, and favorable buyer dynamics.
• Getting external advice or coaching can slash years off your learning curve.

Jake’s Coaching Firm: Bitner Performance Group (bitnerperformancegroup.com)
Investment Firm: Mission Support Partners

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