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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?

#121

Post by have_faith »

bsvalley wrote: post #12

Welcome to Silicon Valley, it's all about networking here. I'd suggest you to sell and to update your Resume - "I created company XYZ acquired by ABC in 2017". That alone will help you fund your next venture. Also, you'll gain a lot of credibility in the Valley and you will be seen as a successful entrepreneur. Lock your money first, then go out there have fun with your new ideas. You'll be way more focused on your b…

> Welcome to Silicon Valley, it's all about networking here.

I haven't found any aspect of life that this isn't true yet.

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

#122

Post by enraged_camel »

mosselman wrote: post #87
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…

Indeed, never having to work again in order to provide yourself with the basics (home, food, car, education for your kids, etc) is already a huge thing to achieve in life. Don't let multi-billion dollar acquisitions you read about here cloud your appreciation of something as big as this.

Besides, several million bucks can be turned into much more with with relatively little effort.

This is the reason why people who receive sizable inheritances get several steps ahead of others.

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

#123

Post by wheelerwj »

erex78 wrote: post #94
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…

There is a lot of advice on the thread saying: take the money. Given your personal situation etc. this may very well be the right choice. But you need to realize that just because you've been approached for acquisition and even if somebody tells you straight up "we want to acquire you", it sounds like you are far away from actually getting acquired. The road from casual interest to money in the bank is long and bumpy…

> Unless you actually have a term-sheet in your inbox, you aren't in the position to make this decision right now.

even then, its not over till the cash is in your account.

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

#124

Post by lphnull »

kevan wrote: post #78
secondmod wrote: post #58

Earlier quoted context omitted.

Will bunch of Cessnas do? 50k to 150k per plane https://www.globalair.com/aircraft-for-sale/Cessna-172

You don't even need a $500k net worth to afford a Cessna. Most guys I know that have them are firmly middle class. They have to make some compromises on houses and cars, but it's worth it to them because they love to fly.

brb, launching cesna uber startup for rich folk.

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

#125

Post by flamedoge »

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…

Uber for jets... for millionaires?

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

#126

Post by mseebach »

rdlecler1 wrote: post #85

If you get your $400m exit you might own 5-20% ($10m - $80m) of the company at that time. At this point I assume you’re a large shareholder and so you need to price out what your time cost is. That’s a lot of money to take off the table and from then you’ll never have trouble raising another seed round. Do be careful though. Business development people are paid to scour a market and this could be a huge time suck wit…

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.

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

#127

Post by richardweddle »

SELL AND GO AGAIN WITH CONTROL Sell and go again because you will have your OWN seed funds out of the $12-14M. CONTROL is key and many of the VC are just THAT short sighted.

SMART PEOPLE Please remember that as the old saying goes - "Smart people seem like Crazy people to dumb people." I know it is a radical simplification and a bit cruel, but since it makes you laugh a bit, you know it is a bit true.

RICH Richard.Weddle@gmail.com

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

#128

Post by Smerity »

callmeed wrote: post #39

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…

Whilst it might be a general concept, the most recent time I heard your paraphrased notes on warm introductions was Marc Andreessen at Startup School.

Both the video and the transcript (with the warm introduction question first) are available at:

http://blog.ycombinator.com/marc-andreessen-at-startup-schoo...

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

#129

Post by jrs235 »

>Only 4% of my cold emails have even been opened (yes, we track it).

You only know that at least 4% have been opened. If an email client blocks the image used to track opens then you'll never know if it was opened. I'm guessing many SV folks and HNers block their email client from displaying images by default.

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

#130

Post by rdlecler1 »

mseebach wrote: post #126
rdlecler1 wrote: post #85

If you get your $400m exit you might own 5-20% ($10m - $80m) of the company at that time. At this point I assume you’re a large shareholder and so you need to price out what your time cost is. That’s a lot of money to take off the table and from then you’ll never have trouble raising another seed round. Do be careful though. Business development people are paid to scour a market and this could be a huge time suck wit…

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.
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