Investments in media buying teams: how, why, and where to find investors

Opinions and perceptions of arbitrage teams vary widely, yet everyone agrees that the affiliate marketing market is enormous. According to 2023 statistics, it is valued at over $17 billion.

Unsurprisingly, the niche's dynamic growth and the heightened attention it attracts are driving the emergence of new players. In just the past 3–5 years, dozens of public media buying companies have entered the market — and even more private ones.

Together with investment fund Burner, founded by IT company Boosta, we set out to explore every nuance of attracting investment for the development of arbitrage teams. Read on for everything about affiliate company valuation methodology, key performance metrics, and channels for finding investors.

Why do arbitrage team owners turn to investors? 

Why sell a stake — or the entire team — when media buying is already generating profit? It's a question many people ask. Let's break it down with an example. 

Imagine you have a team already operating at certain traffic volumes. You also have ideas for rapid scaling and launching new verticals, but you lack the funding to execute them. This is the ideal moment to bring in investment and multiply your profits.

The math is straightforward:

• without an investor, you run volumes of up to $100,000 per month with a 30% net margin. Owning 100% of the company, you take home $30,000;
• with an investor bringing in $1,000,000 in exchange for, say, 50% of the company, you scale up to $500,000 per month. At the same 30% margin, your profit from a 50% stake comes to $75,000.

Is there a difference? You do the math. 

Investment = growth. And it's not a one-time windfall — it's an opportunity to build a solid company foundation, generate more stable and predictable revenue. 

The general framework for selling media buying companies

Some believe that selling an arbitrage team is a matter of days — find an investor, close the deal, and start receiving large budgets for scaling. In reality, such quick transactions are the exception rather than the rule; the process typically takes months, sometimes years. 

Deals worth hundreds of thousands or millions of dollars always go through due diligence. So it's perfectly normal for agreeing on the key terms of a deal to take considerable time. 

The basic investment attraction framework looks like this:

Step 1. Finding an interested investor.

Step 2. Sharing key operational and financial metrics for the most recent period (one year or more). Additionally, if a new vertical is being launched, investors should be provided with a basic financial model for that vertical. 

Step 3. Agreeing on the deal size and scope (the list of assets included in the transaction). 

Step 4. Agreeing on the commercial and non-commercial terms of the agreement.

Step 5. Closing the deal.

Throughout the investment process, the arbitrage team owner's primary goal is to maximize the company's valuation, while the investor's top priority is to verify the deal's transparency and growth potential.

The ideal exit scenario is one where a new line is simply added to the ownership registry, and employees continue working at their desks without disruption.

How to find investors

As the experience of many companies shows, arbitrage team owners typically rely on word of mouth. Rather than listing their companies on international auction platforms, they reach out to fellow entrepreneurs or pitch investment funds directly.

The latter can offer more than just capital — they can also provide expertise sharing and operational support. As a representative of investment fund Burner explains, they are invested in the company's growth and provide everything needed to achieve it:

Burner is a Private Equity fund, so our strategy is nothing like the "spray & pray" approach of a classic VC fund. We are a hands-on investor and co-founding partner who helps ambitious entrepreneurs that have already found their business model to break through the "glass ceiling" and grow alongside us by tens — or even hundreds — of times.

In most cases, we become the majority strategic partner, resolve funding questions, and provide the necessary "infrastructure": financial / legal / HR frameworks and the functional expertise of the entire Boosta group. That said, our investment strategy does not involve changes to the company's management. The founder stays, the employees stay — we simply become an additional driver of the business.

Moreover, when it comes to cash-in deals (where capital is raised for business development), we walk away from any deal in which the C-level management or the founder plans to exit the company.

We focus on traffic-driven businesses that have the potential to grow to $100M in annual revenue within 2–5 years.

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Yaroslav Svyrydiuk

Managing Partner of the Burner investment fund.

What metrics buyers look at

It's worth keeping in mind that the CPA marketing market is unique — it operates by its own rules. For instance, when Facebook goes through a turbulent period, a team's profit can drop to zero. Many companies didn't survive the 2020 US elections and were never able to resume operations.

The problem of unstable profit is relevant both for new teams and for those who have been in the market for several years. Algorithm changes on ad platforms, intense competition, and other factors complicate operations and drive down ROI.

That's why buyers don't care about a team's brand recognition or how many years it's been on the market. First and foremost, they evaluate a deal's potential based on profit, team quality, efficiency, and scalability. Every investor has their own approach to vetting a company, but most buyers typically review the following data:

• P&L for 12+ months;
• a report on team structure;
• a payment calendar;
• a report on affiliate networks / advertisers and partnership terms.

Reviewing this information won't take long if the company is data-driven and has already put financial analytics tools in place. At later stages of the deal, a potential investor may also request access to bank statements — in addition to financial reports — to verify the figures provided earlier.
This is usually not an issue, as the media buying business has undergone a significant transformation in recent years. While many older teams used to operate chaotically, media buying companies today are building systematic approaches and operating with transparency.

Many owners find themselves asking: "How do you even value a team?" First and foremost, the valuation depends on the company itself. If it stands out from competitors through well-established and efficient processes and has built long-term relationships with partners, an investor may offer even above market value.

In most cases, however, valuation is calculated using the formula: monthly profit × 12x – 36x.

It's important to have a clear understanding of where you are right now and where you want to go. You need to have verified current results, a strong and cohesive team, and well-built business processes. And keep in mind that for an investor, past achievements in affiliate marketing combined with a lack of current results is a red flag. That's why having results here and now is a critical criterion.

We strongly recommend preparing a current P&L report for the last 12 months, a roadmap, and a business plan for further scaling before any conversation with an investor.

The motivation and ambitions of the team owner are also critically important — they are the cornerstone of business growth. We've seen countless teams hit a plateau because they were satisfied with a profit of $50–100K and had no ambition or plans to earn millions of dollars per month.

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Yaroslav Svyrydiuk

Managing Partner of the Burner investment fund.

It's important to understand that a partner is someone who is genuinely invested in the success of the business and in taking it to the next level. That's why it's crucial to choose a partner who already has experience building and scaling similar businesses and who can help you avoid the many pitfalls that arise during a company's growth. 

We look for companies and founders who are driven to grow their business and have a clear understanding that with Burner and Boosta's funding, operational support, and expertise, they can multiply it many times over. As a result, their stake in the new business will be worth significantly more than 100% of what the business was worth before the investment.

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Yevheniy Dudarenko

investment manager at Burner fund

Sale vs. Raising Investment

Selling a profitable asset is entirely realistic, but as we noted earlier, it's sometimes better to raise investment first, grow your net revenue, and only then think about structuring a deal.

In 2022, IT company Boosta launched the investment fund Burner, which invests in media buying teams. The fund's key differentiator is that it offers not only financial backing but also years of expertise in launching high-performing IT products. 

The fund is open to cash-in investments of up to $1,000,000 at the outset, with the possibility of follow-up financing of up to $3,000,000 over 2 years from the start of the partnership.

Burner pays particular attention to traffic-driven projects operating in iGaming, Finance/PDL's, Dating, AdTech, SEO & affiliate marketing tools, and Mobile Apps.

Working with a reliable partner is always a win-win. The fund offers several deal formats: cash-in and cash-out. 

Cash-in
It's worth clarifying that a headline like "Company X raised $1M from Burner" doesn't mean the company receives the full amount upfront. Funds are disbursed gradually, in multiple tranches. Internally, the fund operates on a "rounds" system. Each round is tied to financial and operational KPIs and carries a specific investment amount. 

To make it easier to understand, think of a video game with multiple levels. Each level is a round — you can only advance to the next level after completing the previous one (i.e., hitting the set KPIs), and the money is the resource you use to reach those KPIs.

Once the KPIs are met, the company moves to the next level, where the next investment tranche is released and new KPIs are set.
These rounds are defined at the investment approval stage. At that point, each company is required to prepare a financial model, from which we determine:

1. The total investment amount
2. The financial and operational metrics that are translated into KPIs and determine the sequence and size of tranches

Cash-out
When it comes to cash-out, we typically use an earn-out mechanism. This means that a portion of the funds is paid immediately (upfront payment), while the remainder is deferred over time. Importantly, the second portion of the payment is usually tied to the achievement of specific financial and operational targets.

 

 

Yevheniy Dudarenko, investment manager at Burner fund

Media buying teams in 2023 are a fully-fledged business — with their own strengths and weaknesses, growth opportunities, and risks. It's a high-stakes game where additional investment can be the catalyst for rapid scaling.

So if you own a media buying team and are ready to take things to the next level — consider raising investment from Burner. To get started, visit their website and fill out the pitch form.

Here's to fast scaling and big profits! Let`s do great things together!