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ASK HN: I'm very tired.... how do I sell my company?

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Re: ASK HN: I'm very tired.... how do I sell my company?

#31

Post by jacquesm »

tansey wrote: post #30
jacquesm wrote: post #24

Earlier quoted context omitted.

I'd tell, after all HN constitutes a possible audience of buyers.

And he would have just told those potential buyers that he is tired of running his company and desperately wants to get rid of it, thus giving them lots of leverage in negotiations.

Yes, that's correct, his initial wording should have been a bit more diplomatic then.

Even so, if there are multiple potential buyers you will likely fetch market value, if you are actively selling the reason why you sell is not so important as finding a good market to sell it to.

If there is only one buyer then it changes matters considerably.

Re: ASK HN: I'm very tired.... how do I sell my company?

#32

Post by toto »

Honestly there is not enough information to provide you good advice.

There is no ONE approach to sell whatever website / company / solution. The strategy will depend on the nature of the assets you want to "sell" (your expertise, employees, code, customers, etc.), your potential customers (an entrepreneur, a medium company, a Fortune 500 company, ...), your balance sheet, etc.

So my advice would be to analyze your situation and try to identify someone who already sold his company with a similare situation and contact him. For sure (s)he will be happy to share his/her experience. Also, you could find some VC or investor and just invite him/her for a lunch and have a productive talk (it worked amazingly well for me).

Re: ASK HN: I'm very tired.... how do I sell my company?

#33

Post by gyardley »

Selling a company is a full-time job that's a lot like raising money, except unlike raising money there's not a ton of blogs out there giving free advice on how to do it. If you try to do it yourself, you will suck at it.

If your company could actually be worth something, where 'something' has seven digits in it, find someone with experience who's successfully shopped companies before. They will want a retainer plus a percentage of the total. Assuming they know what they are doing, they will be well worth it.

If your company has no chance of being worth a large sum to anyone, put together a list of parties who might potentially be interested, e-mail their CEOs or 'corporate development' executives (if they're large enough to have such things), and just be open with them. They will take you to the cleaners, but if your company isn't worth enough to hire a professional this is hard to avoid.

Ultimately your startup is worth what the market will pay. Lines of code don't mean much and time spent on it means nothing. Let another party make the first offer if you manage to get any nibbles.

Re: ASK HN: I'm very tired.... how do I sell my company?

#34

Post by nash »

tansey wrote: post #30
jacquesm wrote: post #24

Earlier quoted context omitted.

I'd tell, after all HN constitutes a possible audience of buyers.

And he would have just told those potential buyers that he is tired of running his company and desperately wants to get rid of it, thus giving them lots of leverage in negotiations.

Why do you want to sell it is one of the first questions a buyer should ask, or at least find out an answer for.

After all there are lots of reasons to get out: - Patent lawsuit incoming - google/apple just entered the market - Future law change

'My heart's not in it' is a reason to think it is safe to buy.

Of course due diligence for the above is also needed.

Re: ASK HN: I'm very tired.... how do I sell my company?

#35

Post by bradleyland »

tgoing wrote: post #7
pierrefar wrote: post #3

I was in a very similar situation a few months ago. I ran a URL shortener and got tired of the upkeep, but more importantly, I realized that it's a not product but a feature. I sold it, eventually. Here is how. I blogged saying the site is going to shut down, and I started making plans about what would happen in terms of data export and keeping the URLs working. The community responded VERY loudly: we like it, don't…

Hi Pierre, Thanks for sharing this, I can see that you do understand the situation that I am facing right now. Except the fact that I only have a handful number of customers, what makes a big difference.... I have the 50K number in my mind for the price, based on the code, domains and possible patent that we might get. Tks also for sharing your contact, I'll be in touch!

Valuing code and valuing a business are two different things. The value of code relates to its utility to its intended purchaser, its quality, and the difficulty of reproducing the same code from scratch.

The value of a business is directly related to the bottom line. Companies with no sales are a dime a dozen. They're one step ahead of "ideas", and may even be worse off. A company with no sales is a idea that has proven its ability to fail.

$50k is a pipe dream.

Re: ASK HN: I'm very tired.... how do I sell my company?

#36

Post by joelhaus »

RockyMcNuts wrote: post #27
tgoing wrote: post #8

Earlier quoted context omitted.

Short-answers like this make me very nervous.... For me it means that you (or anyone who give those short-answers) do not care so much about the matter.... am I correct? But I'm thinking about tell what is the product.... I can tell that we're making a script to add to any website and we have a handful number of customers. We've been thinking of getting revenues by advertisement, but in order to get significant reven…

Sometimes a short answer is the simplicity on the other side of deep understanding. Do you value an ounce of gold based on the hours that went into mining and refining it, or a Picasso based on the quantity of paint that went into it? It's worth the value the buyer can get out of it, not what you put into it. Typically that's the expected values of future cash flows, discounted to the present using an appropriate ris…

Taking exception with some of the above statements on valuation. There are actually three relevant methods for deriving a value, with the circumstances & audience dictating which approach (be it single or blended) to use:

1) Income Method

As stated, discounted cash flows.

2) Replacement Cost

What would it cost me today to recreate this asset from scratch?

3) Comparable Sales

What price has recently been paid for similar assets?

My assumption was that the OP brought this up because he needed to justify a valuation to the co-founders, not because he is trying to dictate a replacement cost to potential buyers.

NB. There are many nuances to each of these approaches and most situations can be taken into account with the appropriate tweaks; if anyone is curious, there are firms which specialize in this or you can start here: http://en.wikipedia.org/wiki/Business_valuation

Re: ASK HN: I'm very tired.... how do I sell my company?

#38

Post by rickdangerous1 »

Theres quitting for the right reasons and quitting for the wrong reasons. If you quit your project make sure you do it for the right reasons, otherwise you'll regret it later when your perspective is brighter. This may be a situation where the business idea is a lost cause and its time to quit (the smart thing to do), or this might be a situation where if you pivoted and tried something smarter, you could have a breakthrough. (Notice I didn't say work harder - thats a fools game).

Re: ASK HN: I'm very tired.... how do I sell my company?

#39

Post by tgoing »

techiferous wrote: post #28
tgoing wrote: post #8

Earlier quoted context omitted.

Short-answers like this make me very nervous.... For me it means that you (or anyone who give those short-answers) do not care so much about the matter.... am I correct? But I'm thinking about tell what is the product.... I can tell that we're making a script to add to any website and we have a handful number of customers. We've been thinking of getting revenues by advertisement, but in order to get significant reven…

Notice how your comment missed the mark emotionally. Someone took time out of their day to give you good advice and you implied that they don't care. You took an innocuous statement and painted it black. I know it was an honest mistake--I'm not judging you for it--I just want you to notice that. Also reread your post. Notice how you are describing depressive symptoms (fatigue and you even mentioned depression). Only…

>>Notice how your comment missed the mark emotionally.

Yes, that's true.... It's been like a roller-coaster of emotions, and that influenced my comment. I've been thinking a lot before posting this to HN.

>>Notice how you are describing depressive symptoms

True... It has a LOT to do with the time that I've spent on it, the numerous negative feedback of people (that wouldn't work, too hard, you should do something else, etc).

I learned that you can fight back those comments, but there is a limit, and after that it start to play with your head.

Tks for the hint, I can see how it is influencing my judgment, but I believe that will still proceed and contact a possible buyer on Monday.

Re: ASK HN: I'm very tired.... how do I sell my company?

#40

Post by tgoing »

tgoing wrote: post #8
petervandijck wrote: post #4

1) lines of code and time don't matter at all. 2) yes, if they're any good. You need to figure out who might get value out of what you built. Those are the people that might by it. Once you've done that, you need to build competition for the buy. Why not tell us what the product is, so we can give better advice? It doesn't sound like you're going anywhere with it in any case.

Short-answers like this make me very nervous.... For me it means that you (or anyone who give those short-answers) do not care so much about the matter.... am I correct? But I'm thinking about tell what is the product.... I can tell that we're making a script to add to any website and we have a handful number of customers. We've been thinking of getting revenues by advertisement, but in order to get significant reven…

Roller-coaster of emotions...

Petervandijck actually replied and made me see that was a good answer.

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