OffDeal wants to help small businesses find big exits with AI agents

Date:

Share post:


Small businesses are the unsung heroes of the American economy, employing nearly half of America’s workforce and making up 44% of the country’s GDP. But when it’s time for small business owners to sell their companies, their options are limited.

Some go to small business brokers or pass the business on to their children, while others just close up shop altogether. Large corporations traditionally use investment banks, like Goldman Sachs, to get acquired for the best price, but Wall Street giants don’t waste their time on acquisitions less than $25 million.

Founded by a former investment banker, Ori Eldarov, and a former Meta engineer, Alston Lin, OffDeal is trying to bridge the gap by automating the work of investment banks to offer traditional M&A services to millions of small businesses.

The startup, part of Y Combinator’s Winter 2024 batch, created AI agents to discover good businesses to acquire, match them with institutional buyers, and create pitch decks to sell them. But customers never see the software. They only interact with human advisors, who work more efficiently thanks to OffDeal’s software product. That’s the pitch anyway.

“The most important transactions in our lives, they all involve a human,” said Eldarov in an interview with TechCrunch. “The big mistake that people before us have made is that they delegate everything to Python code.”

OffDeal can help a small business find a buyer, or a buyer to find small businesses. In a demo shared with TechCrunch, Eldarov showed how its AI agents can help with both.

To help a small business find a buyer, Eldarov input the company’s website, revenue, and number of employees into a digital form. Then OffDeal’s agent scraped the company’s website for info about its products, services, and end markets, ultimately producing 150 eligible buyers. The agent also produces information about those buyers’ previous acquisitions and other factors that make it a good match, and offers a way to quickly contact them.

As for buyers looking to use OffDeal to find acquisitions, the startup created a database of 2 million American small businesses that could be looking for an exit in the coming years. It uses similar AI agents to match buyers with small businesses here.

So far, OffDeal says it’s currently under contract with nine institutional buyers looking to use its services, with over 250 others on a waitlist.

OffDeal’s software looks good enough to be a platform itself, but Eldarov insists it’s not. The CEO said he considered building software for small business brokers but figured that adoption would be too slow. Instead, he decided to build his own advisory firm using the product — then compete with them.

But what if OffDeal’s AI agents hallucinate and mess up a major part of the deal? OffDeal’s CTO, Lin, admits it’s not exactly a solved problem in the AI industry but has gotten much better with improvements to underlying models (OffDeal uses OpenAI’s GPT-4 models). That’s why OffDeal and many AI companies have taken the approach of having AI work as a copilot instead of working independently.

OffDeal charges between 5% and 10% of the transaction value for its services, a similar rate to what traditional investment banks charge. Eldarov is betting his AI-powered advisors will be able to close more deals than other small business brokers.

Using AI to automate the grunt work of low level employees is not necessarily a new idea (see Harvey AI for the legal world or Sedric for compliance) but these startups continue to raise funds across various industries.

OffDeal tells TechCrunch it recently raised a $4.7 million seed round, led by AI-focused venture firm Radical Ventures. The startup — which charges between 5% and 10% of the transaction value for its services — plans to use this funding to hire more advisors and invest in marketing.



Source link

Lisa Holden
Lisa Holden
Lisa Holden is a news writer for LinkDaddy News. She writes health, sport, tech, and more. Some of her favorite topics include the latest trends in fitness and wellness, the best ways to use technology to improve your life, and the latest developments in medical research.

Recent posts

Related articles

DeepSeek: Everything you need to know about the AI chatbot app

DeepSeek has gone viral. Chinese AI lab DeepSeek broke into the mainstream consciousness this week after its chatbot app...

DeepSeek triggered a wild, baseless rally for some Chinese stocks

Chinese AI company DeepSeek made global headlines for helping spark a massive sell-off in U.S. tech stocks...

Figure AI details plan to improve humanoid robot safety in the workplace

Safety is often overlooked in the rush to bring humanoid robots to the workplace. As high-profile corporations...

Bookshop.org challenges Amazon with new e-book platform

Indie bookstore backer Bookshop.org launched an e-book platform on Tuesday, making it easier for readers to buy...

Documents show UK wooed a16z for five years

UK documents show that the UK’s Department of Business and Trade spent five years convincing Andreessen Horowitz...

This founder was worried about his mother slipping — so he created sensors to detect falls

Falls are common for older people living semi-independently. According to the CDC, they’re the leading cause of...

Jetify launches Testpilot, its AI QA engineer

Jetify, the company formerly known as Jetpack.io, is launching its first AI agent product Tuesday. Dubbed Testpilot,...

Hugging Face makes it easier for devs to run AI models on third-party clouds

AI dev platform Hugging Face has partnered with third-party cloud vendors including SambaNova to launch Inference Providers,...