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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?

#31

Post by nols »

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…

It's a team of people, so the $14MM wouldn't all go to a single person. It's certainly a lot of money, but it may not be retire in comfort money.

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

#35

Post by dawnerd »

nols wrote: post #31
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…

It's a team of people, so the $14MM wouldn't all go to a single person. It's certainly a lot of money, but it may not be retire in comfort money.

Even if it's a small team and everyone gets an equal split (unlikely), that's still a ton of cash. I'd take it, move somewhere cheap and just work on personal projects for the rest of my life and not worry about trying to please shareholders.

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

#36

Post by kingnothing »

If $14M is a life changing amount of money for you, if you aren't already monetarily set for life, then take the deal. Having that kind of financial freedom will afford you the opportunity to start other, risker, ventures in the future. On the other hand, if you're already very wealthy, it might not be worth exiting right now.

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

#37

Post by superdex »

If you're not profitable enough to hire without borrowing money, then that's something to really look at. You don't have to hire 15 people. And taking on money is giving away your control; you'll have to bow to the VC's wishes because they bankrolled you. If you can go without, I'd go without and keep on chugging.

And depending on how you're structured now, $14M is a LOT or it's quite a bit and you can take your time looking for the next thing....

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

#39

Post by callmeed »

IMO You need to look into both options until you get at least (a) a letter of intent for acquisition or (b) a term sheet from a VC. If you can, get both, then consider taking the VC money if you can get a significantly higher valuation and good terms.

I recall a VC interview recently where he said (paraphrasing) not accepting cold emails and requiring an introduction is a filter that proves you know how to hustle and make some connections. That's a skill you're going to need anyway.

If you're willing to do that, start working your network of former classmates, co-workers, bosses, friends, etc. Don't be afraid to make phone calls, ask for favors, etc. If you are in the US, attended a university, and worked in tech there's really no excuse for not being able to get some warm intros to investors.

On the acquisition side, definitely pursue that but don't be mistaken thinking "interest" == "sure thing acquisition". 8-figure acquisitions don't happen without a shit-ton of due-diligence. If you feel someone is truly interested, retain an M&A lawyer and get their advice before giving access to anything beyond basic numbers.

Good luck and expect to be challenged/busy whichever way you go.

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

#40

Post by jonnathanson »

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 asset is depreciating all the while.)

I say this almost as a reflex. I used to work in talent management many lifetimes ago, and I'd actually find myself having this talk with people in this specific situation. Explaining to someone who just made $10M on a single movie that s/he can't afford a jet is a surreal experience. Sorry for the tangent!

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