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Ask HN: Sell my startup for $14M because I can't raise $2M?

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Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#131

Post by jrs235 »

jonnathanson wrote: post #40
austenallred wrote: post #11

A few things, though it's hard without much info (re: revenue/growth). Regardless: 1. A $14m sale is a huuuge win. You'd be set for life. A 100% likelihood of $14m is something that is difficult to turn down in almost any scenario. Even if you'd eventually make $50m, your life wouldn't change much from a net worth of $14m to $50m. You could buy a nicer jet? Let's say you take the $14m. Your life would (presumably) ch…

"Even if you'd eventually make $50m, your life wouldn't change much from a net worth of $14m to $50m. You could buy a nicer jet?" I know you're kidding around here, but all kidding aside, whether your net worth is $14M or $50M, you can't afford a jet. (I mean, nominally speaking, you can front the sticker price -- but you'll get eaten alive on fuel and maintenance over the jet's useful lifespan, and the jet as an ass…

Yep. You're better off just chartering private flights when you need to.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#132

Post by T2_t2 »

hexadecimated wrote: post #101
osteele wrote: post #84

Earlier quoted context omitted.

I dined once with a billionaire and a couple of multimillionaires. The billionaire owned a jet. The multimillionaires were envious of him because they only owned jet timeshares . (If you own your own jet, it's always where you want it, you can decorate it the way you want, and you can leave your stuff in its bedroom and living room. It's like having a pied-à-terre in a city instead of renting a hotel room each time y…

Such hideously wasteful extravagance, and how sad that these people who are already absurdly rich are still greedy for more.

Not really. Buffett bought a jet, after calling it indefensible for years, and actually named it The Indefensible.

I reckon it is a good investment for many CEOs. There time is worth FAR MORE to their companies than whatever a jet costs to run, the saved time is invaluable as is the clarity that comes with better conditions when flying.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#133

Post by AdrianB1 »

jonnathanson wrote: post #119
osteele wrote: post #84

Earlier quoted context omitted.

I dined once with a billionaire and a couple of multimillionaires. The billionaire owned a jet. The multimillionaires were envious of him because they only owned jet timeshares . (If you own your own jet, it's always where you want it, you can decorate it the way you want, and you can leave your stuff in its bedroom and living room. It's like having a pied-à-terre in a city instead of renting a hotel room each time y…

My experience tells me you're lowballing the crew salaries; your pilot alone draws at least $200k. You probably don't pay for the rest of the crew, but you do pay monthly fees for storage, private airstrip clearances, and ad hoc (big) costs each time you fuel it up, 'rent' an attendant, and cater the flight.

A commercial pilot at a regional airline makes less than $50,000 a year, many are closer to $30,000. When you get hired by a big airliner (over 1500 hours of flight time) and eventually you get to captain (not co-pilot) then you increase substantially, but nowhere close to $20,000, unless you fly a drug lord in strange places.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#134

Post by cestith »

Many of the top founders are serial entrepreneurs. If you're the only shareholder and you sell for $14,000,000 now you've got fourteen million dollars (minus whatever your government takes) to live from while starting your next company.

You can learn to love again. If you can sell but can't raise funds, consider the option of it being a way to self-fund your next startup.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#135

Post by hpcjoe »

zupreme wrote: post #47

Learn from my mistake. Unless you're already financially secure (meaning you could stop working and live your current lifestyle for several years) then my advice is to take the money while you can OR to leverage that valuation to pocket a few million $ (by selling equity). I'm doing great with my current startups now but several years ago I founded a very promising startup which almost immediately got many acquisitio…

This +100

One day I'll write my story. A few acquisition offers, some investment offers. Foolishly we rejected them.

Company when bust with the help of a bank last year.

Same rules as in baseball. Don't swing for the fences. Many singles and doubles win you the game.

Homers and grand slams are infrequent and elusive.

Had the same sort of capital issues. Same problem with VCs... I'll write my thoughts on them some day as well.

Take the money and run. Rinse and repeat.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#137

Post by mseebach »

rdlecler1 wrote: post #130
mseebach wrote: post #126

Earlier quoted context omitted.

How do you get to those dilution numbers? The OP is already at 14M, apparently with no significant outside funding. If you assume they'll be at 5-20% ownership at 400M, practically all the "growth" will have been cash from equity sales. Presumably the OP believes that he can actually grow his business to that size, like he grew it to 14M.

He’s at a $14m acquisition number. How much of the company does he own? Does he have one or two other founders? Marching to a $400m valuation is going to dilute you around 20-30% each round to both investors and ESOP. I’m giving an approximation but what I’m pointing out is that you not going to own 100% of the company and you may see a <1x - 20x multiple on your current ownership.

But he's not "marching to a $400m valuation", that's what he believes he can grow the company to. If you get a 20x multiple on 14M for 400M, you have grown less than 50%, and raised a ton of money.

You're not magically getting diluted into the ground because you raise a bit of money.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#138

Post by lpolovets »

I'm a seed stage VC. If you want feedback on your pitch or cold email, please email me at leo@susaventures.com. I'd be happy to help.

My fund might be a fit as an investor. If not, then I might be able to suggest a few firms that could be a fit.

Also, 4% is a low open rate, but that might be misleading. For example, I set gmail to not open images by default, which could affect emails that use tracking pixels.

Finally, selling something for $10m+ is a really amazing "last resort." :)

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#139

Post by nugget »

AdrianB1 wrote: post #133
jonnathanson wrote: post #119

Earlier quoted context omitted.

My experience tells me you're lowballing the crew salaries; your pilot alone draws at least $200k. You probably don't pay for the rest of the crew, but you do pay monthly fees for storage, private airstrip clearances, and ad hoc (big) costs each time you fuel it up, 'rent' an attendant, and cater the flight.

A commercial pilot at a regional airline makes less than $50,000 a year, many are closer to $30,000. When you get hired by a big airliner (over 1500 hours of flight time) and eventually you get to captain (not co-pilot) then you increase substantially, but nowhere close to $20,000, unless you fly a drug lord in strange places.

I have friends who are pilots at the majors who clear $300,000+ a year. Pay has risen substantially since the round of bankruptcies cleared legacy debts. FedEx and UPS apparently pay the most - although I'm not sure why.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#140

Post by jonnathanson »

AdrianB1 wrote: post #133
jonnathanson wrote: post #119

Earlier quoted context omitted.

My experience tells me you're lowballing the crew salaries; your pilot alone draws at least $200k. You probably don't pay for the rest of the crew, but you do pay monthly fees for storage, private airstrip clearances, and ad hoc (big) costs each time you fuel it up, 'rent' an attendant, and cater the flight.

A commercial pilot at a regional airline makes less than $50,000 a year, many are closer to $30,000. When you get hired by a big airliner (over 1500 hours of flight time) and eventually you get to captain (not co-pilot) then you increase substantially, but nowhere close to $20,000, unless you fly a drug lord in strange places.

My gut tells me that calculus goes by the wayside when you're flying Bill Gates around the world, or even just flying your 'garden variety' billionaire and his/her family around the country. I could be totally wrong here, because I'm neither a jet owner nor a pilot. But I've worked around enough uberrich people in my day to know that their domestic staff gets paid really well, and I have to believe a private pilot cracks into the sixes rather handily. Whether or not he/she cracks $200k is another matter, but it seems likely.

There aren't very many of these jobs going around at any given time, and they involve exhaustive security and background clearances. You are also privy to a ridiculous amount of inside info flying these guys around everywhere, and you need to be trustworthy, i.e., come with references from other billionaires and such. It's a very hard world to break into, and if flying commercial paid better than this did, no one would bother trying.

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