Whatever you do, don't try to sell without the help of a banker. Also negotiate the best possible deal with the banker you choose.
I can intro you to ours, he was great (we sold this year): andrei@sameroom.io
Ask HN: Sell my startup for $14M because I can't raise $2M?
211–220 of 336 posts
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#212Earlier quoted context omitted.
"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…
In a somewhat crude and related note. felix dennis (the week weekly magazine founder) once said, “If it flies, floats or fornicates, always rent it.” Not completely bad advice for most rich people that want to stay rich.
It's ok to say "fucks" on HN, especially if it's a direct quote (and in this case fairly relevant since he was a fairly crass man).
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#213Earlier quoted context omitted.
At 14M you are already in the territory where a jet card is definitely something you could afford. If I had that sort of money, I would use a jet card for flights within a continent and go first class commercial for intercontinental (and definitely use VIP terminal or at least meet and greet services). But at 50M you might be looking at fractional jet ownership already. There is a difference and it's a big one.
Let's pretend someone has arrived upon 14 million in after tax net worth (not the case in OP's scenario). You want to be set "forever" and not dependent on working again. You'll probably work, but may not be able to replicate the same financial success you experienced previously, so it's hard to count on future income. There's a debate around what's called the "Safe Withdrawal Rate" which is financial-market speak fo…
$320k disposable every year is very different from $320k post-tax income. With the latter, you'd probably be stashing nearly half of it away for various reasons. The annual spending of a person drawing $320k post-tax from their investments is more comparable to someone earning about $500k post-tax from work.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#214I'm curious what ARR is?
Annual recurring revenue, I'm not sure if monthly
subscriptions or even 1-year contracts count but I think multi-year contracts definitely do.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#215Earlier quoted context omitted.
It was in his book "how to get rich" or something similar to that title. Half memoir half advice. It's actually a pretty good read... title notwithstanding. I am not sure if he was he originator of that saying though.
The Audible version is extremely good. The narrator makes it sound like Monty Python, which seems to be an accurate tone for the book. It isn't a parody, but it's definitely irreverent and thoroughly entertaining.
One of the better books on wealth building I've read. Also very amuzing!
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#216Earlier quoted context omitted.
Do you add a break up clause to prevent this?
You should* also be working with a banker who sells companies for a living. They will take some % (10%? Who knows) of the deal, but in my limited experience it seems worth it, since they will also help you make introductions and give advice - maybe not perfect advice but it will be advice that will either raise the price of your sale, make it happen faster, or promote some corrupt agenda the banker has (i.e. work wit…
I could be wrong, and if I am I'd appreciate informed corrections, but I don't think it's the norm for low-8-figure transactions to use bankers.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#217Earlier quoted context omitted.
I would be quite comfortable at those levels, do you enjoy arguing?
Sure why not would you provide break down of how that would look with family:)? you can start by subtracting taxes
Let's say $100k post-tax to make it easy.
- Housing $34k annually
- Car $16k annually
- Food $20k annually
- Stuff $20k annually
- Vacation $10k annually
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#218please send your deck to dy@deepmagic.io, we might work something out
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#219Earlier quoted context omitted.
At 14M you are already in the territory where a jet card is definitely something you could afford. If I had that sort of money, I would use a jet card for flights within a continent and go first class commercial for intercontinental (and definitely use VIP terminal or at least meet and greet services). But at 50M you might be looking at fractional jet ownership already. There is a difference and it's a big one.
Let's pretend someone has arrived upon 14 million in after tax net worth (not the case in OP's scenario). You want to be set "forever" and not dependent on working again. You'll probably work, but may not be able to replicate the same financial success you experienced previously, so it's hard to count on future income. There's a debate around what's called the "Safe Withdrawal Rate" which is financial-market speak fo…
> You'll probably work, but may not be able to replicate the same financial success you experienced previously, so it's hard to count on future income.
If that is the case, then you should focus on learning how to invest properly and on achieving, say, 10% annual returns yourself (i.e. without having to pay bank fees for subpar investment advice, which is what you usually get).
Just because you made bank doesn't mean you have to get all conservative. Or at least, I wouldn't.
One example: you could make calculated bets when there's "blood on the streets", e.g. wait (for years) until the market crashes, but when it does, leverage up that $14m to $50m and book a nice 20-30-40% gain.
Or acquire an existing company using mostly debt (and a bit of equity), etc
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#220Earlier quoted context omitted.
Do you add a break up clause to prevent this?
You should* also be working with a banker who sells companies for a living. They will take some % (10%? Who knows) of the deal, but in my limited experience it seems worth it, since they will also help you make introductions and give advice - maybe not perfect advice but it will be advice that will either raise the price of your sale, make it happen faster, or promote some corrupt agenda the banker has (i.e. work wit…
I could be wrong also, my remembered banker stories were about larger transactions, it's true.
(PS, why can't I reply to the comment to my comment? I guess I don't comment enough to understand HN :-)