The entrepreneurial landscape is experiencing a massive transition as millions of small business owners approach retirement, creating unprecedented opportunities in business ownership transfer. This shift, coupled with growing interest from a new generation of entrepreneurs shaped by post-COVID work culture, has highlighted the need for efficient business sale solutions. Baton is revolutionizing the SMB acquisitions marketplace with a tech-enabled platform that achieves a 70% close rate – 10 times higher than traditional solutions – while delivering 50% cost savings. The platform streamlines the entire sales process from valuation to closing, making business ownership transfer more accessible and efficient. The platform provides free initial valuations and digital data rooms for sellers, then offers paid tiers ($500-1000/month) plus a 6% commission on successful sales, with monthly payments credited toward the final fee.
AlleyWatch caught up with Baton CEO and Cofounder Chat Joglekar to learn more about the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $12.8M, and much, much more…
Who were your investors and how much did you raise?
$10M Series A led by Obvious Ventures with participation from Burst Capital, FJ Labs, Fluent Ventures, and Spencer Rascoff (cofounder and former CEO of Zillow) via 75 & Sunny, Divergent Capital, Bloomberg Beta, Zeno Ventures, and Giant Ventures.
Tell us about the product or service that Baton offers.
Baton is the leading marketplace for SMB acquisitions. With a 10X higher success rate than previous top solutions and a 70% close rate, Baton is the best place for sellers to navigate the sale of their small business, and for buyers to start their entrepreneurial journey.
What inspired the start of Baton?
The founding of Baton was inspired by the recognition of significant inefficiencies in the SMB acquisition market, similar to what I had previously seen and helped solve in the real estate market through Zillow. Drawing from my experience in market transformations at companies like Google, Spotify, and Zillow, I identified key problems in the SMB space including a lack of transparent business valuations, difficulty in accessing improvement strategies, and challenges in finding trustworthy brokers. Together with my cofounder, Dylan Gans, whose grandfather closed his business because of a lack of viable options, we created Baton to address these issues by providing free valuations and creating transparency in the SMB acquisition market, aiming to ensure small business owners receive fair compensation for their work.
How is Baton different?
Fast data-driven valuations in 1 day vs traditional weeks-long manual processes, with automatic data pulling from websites and QuickBooks integration.
Free valuations and private listings with a free model, unlike competitors who charge upfront fees or require lengthy broker interactions.
Comprehensive digital data rooms that provide full business transparency to buyers immediately, compared to traditional platforms requiring back-and-forth emails for basic information
Helps guide the owner through buyer interest, negotiations, and closing in half of the time as a traditional sale process.
What market does Baton target and how big is it?
Baton targets the SMB acquisitions market, specifically focusing on small and medium-sized business sales with a valuation of over $100K. The market size is estimated at $10 trillion in small business assets expected to change hands over the next decade, largely driven by retiring baby boomers (“Silver Tsunami”).
What’s your business model?
Baton offers free initial valuations, then two paid tiers: a “lite” plan ($500/month) and a “pro” plan ($1000/month) with enhanced services. They take a 6% commission on successful sales, with monthly payments credited toward this fee.
How are you preparing for a potential economic slowdown?
Baton has seen that its business is relatively resistant to economic swings — small business transactions occur for a variety of reasons such as relocation, retirement, or health. As the economy changes, Baton sees small shifts in deal structure and slightly more favorable deals for the buyers in slow economic times.
What was the funding process like?
Baton’s funding process was really buttoned up — they went from the kickoff to a signed term sheet in less than a month!
What are the biggest challenges that you faced while raising capital?
Baton’s biggest challenge was handling all the interest from investors as the market has realized that the small business space is ready for a transformational solution, which is Baton!
What factors about your business led your investors to write the check?
The key factors are Baton’s superior performance metrics (10x higher success rate than current market solutions with 70% close rate), 50% cost savings compared to traditional solutions, and their position as a leading marketplace in a massive market opportunity around business ownership transfer.
What are the milestones you plan to achieve in the next six months?
Baton plans to double its workforce from 15 to 30 employees by the end of 2025 and enhance its product offerings.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Baton focuses on supporting small business owners and future entrepreneurs. If you focus on providing value everyday to your customer the investors (and capital) will follow. New York is the greatest city in the world and there are tons of great investors that will be willing to take a meeting if you are solving worthwhile problems.
Where do you see the company going now over the near term?
We are excited to support more and more small businesses with their next phase and finding an honorable successor. Everything we do is focused squarely on that mission.
What’s your favorite winter destination in and around the city?
You can’t go wrong with the Rockefeller Tree and Ice Skating — but I am partial to The Nutcracker every holiday season at Lincoln Center!