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Ask HN: Where can I buy real software companies?

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Re: Ask HN: Where can I buy real software companies?

#101

This strikes me as one of those 'if you have to ask, you shouldn't do it' situations.

Care to explain? The OP's question was not whether it was a good idea, but the specifics of how, where, and why a particular website marketplace.

I was confused as well. A market place is basically lead-gen into the funnel of deciding whom is worth further diligence (interviews, tours, IP review, finances, customer surveys, etc.)

Re: Ask HN: Where can I buy real software companies?

#102
post #35

Earlier quoted context omitted.

I don't know why you are downvoted. The $500k/year business does , conservatively, cost $2-3 million (using the common "5x the yearly revenue" formula).

Valuing companies based on revenues is a bit of a stretch in my mind. Actual income/earnings/cashflow makes a lot more sense. If you don't take into account expenses then you get some really wacky valuations: ie a company is in the business of selling houses (or other large cost item) for a small percentage higher than they bought them. If you don't take into account the cost of buying the house and running the busin…

That's fair, but you can only reason that way with an owner who is mentally "done" with his business, or his business is flat/ declining. For entrepreneurs that feel they haven't yet attained anything close to the full profit potential of their business, you just have to make them an offer they can't refuse, which leads to absurd valuations. Sometimes works great, sometimes it doesn't, hopefully it evens out positively in the end. That's the game you play when you invest.

Re: Ask HN: Where can I buy real software companies?

#103
post #44

Why are the answers here so coy? "Send me an email, we'll talk" Is it a secret to be shopping your website/product to a new management? Why?

Poker face and cordial until all the bodies are dug up and the figure and most importantly, terms and conditions of sale and transition plan are agreed and the check is deposited, because it's tire-kicking until the ink is dry. It's important to telegraph genuine admiration to suggest a shop might have a better home than competing bids.

It's a hard thing to do, trade-in somwthing more precious than cash, labor, time and effort, life... so have a good time and aim make people consistently, insanely happy and always satisficed

Re: Ask HN: Where can I buy real software companies?

#104
Again, if a side hobby/business is getting too time-sink, boring or unsure how to scale it, selling off the value, happiness of customers, employees, vendors, etc. created, is a rational act. Shutting down is only advisable if the business model cannot ever have hope of being monetized AND folks running it lack ideas (and asked around to advisors and such) how to adjust the consumer/producer relationship.

Re: Ask HN: Where can I buy real software companies?

#105

Earlier quoted context omitted.

That's to protect the broker, not the company. They don't want you to bypass them.

I would think it protects the company just as much. I've never sold a company but I'd imagine that people often don't want their customers and/or employees knowing that they're shopping the company around. Requiring an NDA before the company name is shared presumably makes it significantly less likely that word will spread in undesired ways...

Not that it is a good practice in general IMO. I also don't like the "hush money" practice mentioned by Lane Becker either.

Re: Ask HN: Where can I buy real software companies?

#108
Love this thread. I've been looking to find answer to this question. I used to get more quality results from Flippa when I wanted to buy sites, back when they were Sitepoint. Now it's more or less for newbies to drop their money.

For sales, Flippa offers a brokerage service as well. They don't charge, unless the site is sold. I've got an extension for a CMS that stably makes 6-figures profit for past 3 years. Last year I wanted to experience the process and test the market, but didn't find the right buyer. This year might try again. If interested, reach me on Twitter: @ugurkaner

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