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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?

#311

Post by tedmiston »

CalChris wrote: post #308
senatorobama wrote: post #278

Earlier quoted context omitted.

I'm about 3 years into my career. Should I focus on developing my technical or interpersonal skills?

What you think are technical skills is just currency. Your in depth knowledge of this stack or that toolchain will doom you to maintenance when that currency is discarded for the new new. Your interpersonal skills are tied to your cohort.

The in-depth knowledge is also only as worthwhile ad you can communicate how it affects the company in dollars to the business side.

At the end of the day, a competent developer will great communication is a better position to be in than a great developer with so-so communication in most companies. Maybe different in the biggest ones or where you can have very specialized roles.

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

#312

Post by davenbuster »

tptacek wrote: post #216
sgs1370 wrote: post #205

Earlier quoted context omitted.

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.

I've been involved in a few deals of that size (acquiree and acquirer) and to my knowledge, no acquirer ever had an IB. If funded, acquiree could lean on angel or VC who's seen a lot of deals.

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

#313

Post by callmeed »

sah2ed wrote: post #282
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…

I think you were referring to Marc Andreessen's AMA with Stripe Atlas founders [0] which was as recent as July: "Getting a warm introduction to a VC is a basic test of networking skills. VCs are dying for interesting qualified referrals from people in their network—angel investors, other VCs, advisors, coaches and mentors, lawyers, and customers. All of those people love giving qualified referrals to their favorite V…

Yes that's it. Thanks.

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

#314

Post by goseeastarwar »

bilbobagends wrote: post #208
goseeastarwar wrote: post #155

Earlier quoted context omitted.

+1 I think people don't recognize how "little" money you need to replicate a big salary. 14M at 3% is $420k/yr. And as long as you don't spend every last dollar, that number keeps going up...forever. Build whatever you want at that point.

First, a sale of $14M doesn't get you $14 - you'd get less than 10 - best case. Second, your after inflation return in the current environment may be quite ugly - $300K or $400K a year will not feel rich in any east or west coast city.

What a silly argument, this is the top one percentile in net worth and income. You're confusing the behavior of billionaires with what rich actually means.

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

#315

Post by xapata »

qaq wrote: post #296
xapata wrote: post #293

Earlier quoted context omitted.

$20k annually on food and it won't be good? I'm not sure what groceries you buy and where you eat out, but my family is pretty happy with our food. $400 per week is quite reasonable. Heck, you can shop at Whole Foods with that budget. Sometimes, anyway. The Asian market has much better prices, but they don't sell milk. But yeah, forgot medical. If you're doing half your discretionary on housing, that's going to be to…

How did this become about me :)? The discussion was about quality of life in SF with 160K a year.

LOL. Then whoever is supplying the anecdotal experience you've gathered evidence from. :-)

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

#316

Post by [deleted] »

enraged_camel wrote: post #122
mosselman wrote: post #87

Earlier quoted context omitted.

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.

[deleted]

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

#317

Post by kbenson »

indymike wrote: post #304
onlyrealcuzzo wrote: post #294

Earlier quoted context omitted.

Yeah, I used to be really afraid of sharing my ideas until I finally started my own company. Ideas are cheap. Building a company is hard work. It takes a good idea and a passionate team to create something great. Sure you run a chance of someone taking your idea. But are they more dedicated and passionate about it than you? If so, you're in the wrong business. Better to find out sooner, tbh.

If you have an idea that someone can read a blog post and then replicate, the idea isn't sophisticated enough or you probably just shouldn't write that blog post.

The idea may be somewhat novel, but not necessarily hard. That doesn't mean it's not worthwhile, but if you are working hard in your spare time to get a MVP ready, and someone else already has a business with the employees and developers in place to run with an idea, it can be hard to compete if they decide to put resources towards that idea. Normally you might actually have a small but happy customer base before you get real competition if your idea is novel enough.

That is't exactly the point I was trying to make originally though. The point I was trying to make is that I doubt most small businesses are special snowflakes that can't be replicated. There are of course details that are specific to that company, but I doubt most of those are required for successful function of the company were someone to try to copy the model.

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

#318

Post by tedmiston »

PerfectElement wrote: post #246
vikp wrote: post #226

I haven't seen this advice in this thread yet, but there is a path other than selling or raising VC. It's focusing and growing your revenue until you get through this crunch. We've been in a similar situation before, that we managed to grow our way out of. It is possible to get through this, keep growing your business, and do it all on your own terms. To resolve the short-term feeling of being overwhelmed, here are a…

> I don't know what your revenue is, but I'd guess a few hundred k ARR. Is it normal for a SaaS with a few hundred k in ARR to be worth $14 million?

It depends on the quality of revenue. If the few hundred k is very high quality on a rapid growth trajectory vs if it's heavily services based.

Of course unit economics rule in the long run, but in the short term, it's more interesting to look at LTV:CAC.

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

#319

Post by buremba »

If you sell your company: + You will be financially secure

+ You won't be taking any risk so your life will be easier

+ It will be dead easy to raise when you start a new company

+ You will have more reputation thanks to the exit

- The potential of the company may be much higher

- Your life will no longer be fun if you love what you're doing right now.

If you don't sell your company:

+ If thing go well, you can be the founder of a unicorn

+ It will be more fun if you love what're doing.

- One of the big enterprise companies that wants to buy you may build the same product and try to kill your company

- The fundraising may take so much time and stressful for you

- Even if you fundraise, things might not go well and lose $14M.

I would think about all of them at first and sort them by their priority and then it will be easier for you to decide.

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