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Selling My Bootstrapped SaaS Business

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Re: Selling My Bootstrapped SaaS Business

#71
post #4

I buy bootstrapped businesses. Email in profile. Shoot me a message would be happy to discuss even if its just to chat. I don't ask a lot of questions, have numerous references, and I have been buying for the last 10 years.

... and what revenue multiple do you pay?

> ... and what revenue multiple do you pay?

I'm trying to figure out if you're just being a jerk here, or whether you are genuinely curious about a question with a wide range of acceptable answers. I hope it's the latter.

Market rates are typically something between 2x and 5x some sort of revenue or profit measure.

That said, the price can go over 5 if there is a big strategic advantage to be had.

Conversely, the multiplier can be measured in months if there are some red flags -- bad management, suspect financials (e.g, lots of charge backs, excessive debt, cash flow mismanagement, etc.), suspect marketing activities (e.g., janky backlink profiles), evidence of black hat / gray hat activity, publicity issues, etc. Sometimes folks just want to sell these to get away from them, and they are willing to offer the right price. Is offering a 12 month revenue/profit multiple or lower bad here? I would say potentially no.

Also note that some people are motivated to sell for some reason. If you've got cash on hand, they will sell for less.

Anyway, whether you intended to or not, this sounded like a snarky reply. Much has been written about markets for small companies, so blithely challenging someone on HN seems inappropriate.

On the other hand, if you do know someone who has an unconditional open offer to buy businesses at a specific multiple of revenue, please let me know. I can hook them up with as much as they want. I'm fairly certain that this is not the case, but I think it is prudent for me to ask.

Re: Selling My Bootstrapped SaaS Business

#72

Earlier quoted context omitted.

Are you saying you can expect 10%/year with your money in the stock market? No stockbroker will tell you that, it is more like 6%-8% over a 10 year time frame. And you have to have the courage to watch your balance drop 50% over a 1-2 year time span and still stay in.

If you put some time into it and learn how to properly invest, yes. If you made a million today, you probably want to just keep it in an account and wait until a 20%+ correction happens before buying in, though -- it's been quite while since the last significant drop.

Trying to time the market? Good luck with that.

Re: Selling My Bootstrapped SaaS Business

#73

Shows how out of touch I am with the corporate world. I can't believe people pay monthly for this.

Would you rather:

Hire a developer with a salary, benefits, and tax to build this module plus project mgmt time for requirements building, testing, training, documentation, sustain, etc.

Pay $60/month and 1/10th of an FTE to plug it into existing assets and sustain it.

Re: Selling My Bootstrapped SaaS Business

#74

Shows how out of touch I am with the corporate world. I can't believe people pay monthly for this.

This is something that any business with multiple locations needs. Why reinvent the wheel if someone has already solved the problem? At $60/mo it's not even a blip on the budget, and almost surely far cheaper than having a developer build and maintain a one-off version.

Re: Selling My Bootstrapped SaaS Business

#75
post #2

...the cash, from selling the business has built momentum for other projects like [...] angel investing, I just knew that would be in there. Why do so many tech people seem to think that VC investment is what they want to be doing once they have spare cash? This isn't a personal critique of the OP, but it just seems so very common in general. I don't understand it.

I want to “invest” in the opportunity to sit back, write books and fly airplanes. Angel investing seems like its fraut with constant bombardment from bullshitters. Spending my days looking at decks and listening to the noise of how great someone’s revolutionary idea for delivering fresh made salads to Brooklyn hipsters is would drive me nuts.

Perhaps I’d take my money and go build schools in the Himalayas or something.

But to each his or her own!

Re: Selling My Bootstrapped SaaS Business

#76

Shows how out of touch I am with the corporate world. I can't believe people pay monthly for this.

If it saves more time than it costs, it's a good deal for everyone involved.

At $19/mo, even if it only took me day as a developer to create my own, I'd rather just buy the service for a year. I'll get a more polished version, I don't have to maintain it, and I can go do something more productive instead since I'm not actually in the business of creating store maps, I just needed the one. If you don't have in-house developers, like a retail operation might not have, the value proposition becomes even clearer.

Re: Selling My Bootstrapped SaaS Business

#77

Shows how out of touch I am with the corporate world. I can't believe people pay monthly for this.

If it saves more time than it costs, it's a good deal for everyone involved. At $19/mo, even if it only took me day as a developer to create my own, I'd rather just buy the service for a year. I'll get a more polished version, I don't have to maintain it, and I can go do something more productive instead since I'm not actually in the business of creating store maps, I just needed the one. If you don't have in-house d…

Couldn't agree more with you. Many developers tend to think of their own time as free and often don't estimate the cost past initial building (like maintenance/upgrades/compatibility).

I am a former developer myself so certainly been there done that mistake myself.

Re: Selling My Bootstrapped SaaS Business

#78

> Purposefully under-optimize > For example, I really do not understand paid search advertising (Google Adwords, Facebook, etc) so I purposefully put almost no effort into it as a customer acquisition channel for Storemapper. This article is awesome and super helpful, but that particular point seems like terrible advice. Surely it would be much better to hire a marketing/adwords contractor, and increase the value of…

I believe Tyler refers to not wasting resources on acquisition channels that you don't have expertise on. That hurts the bottom line and profit margin at the end of the day if you try and fail at a lot of things but also may imply that the business "can't be grown" because the current owner "tried it all". If you are confident in outcome you should always try to maximize total revenue and MRR/ARR metrics.

Re: Selling My Bootstrapped SaaS Business

#79

Hi folks. I'm the OP here. Hit me up if you have any questions.

Go to Conferences ... I only reached a critical mass of serious acquisition offers after attending my first Micro-Conf in Las Vegas.

Just curious, what types of activities did you do at MicroConf? Did you speak/present? Did you attend sessions (which ones)? Did you just talk to people and network? How did you plan to approach people at the conf? What worked, what didn't?

I once paid to attend an industry conference for a product I was working on, it was a complete waste of time because I basically did nothing, could not get out of my shell, and didn't know what to do. So any guidance you have here would be very valuable!

Re: Selling My Bootstrapped SaaS Business

#80

Hi folks. I'm the OP here. Hit me up if you have any questions.

Can we get a look at the due-diligence and hand-over list/sequence? I'd like to see what that entails.

Make sure you know what your metrics are so you can answer initial questions and separate business records/accounts from personal way ahead of sale.

I sold a business not too long ago.

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