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Dropbox buys HelloSign (YC W11) for $230M

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Re: Dropbox buys HelloSign (YC W11) for $230M

#91

Post by bogomipz »

okmokmz wrote: post #77
bogomipz wrote: post #69

Earlier quoted context omitted.

I am perfectly sure of the definition of that word. I worked as a copy editor in a past life. I would suggest maybe you consult the Oxford or Merriam-Webster dictionary: https://en.oxforddictionaries.com/definition/snare https://www.merriam-webster.com/dictionary/snare The verb form of the word snare is neither applicable or correct to describe a non-hostile business deal, even colloquially. Hellosign wasn't "trapped…

https://www.merriam-webster.com/dictionary/snare transitive verb 1b : to win or attain by artful or skillful maneuvers

This exactly supports my point. There was no artful or skillful "maneuvering" on Dropbox's part. They made an offer and negotiated a purchase that was amenable to both parties.

Had this been a hostile takeover or had Dropbox forced them to sell "snare" would indeed be applicable. However the Dropbox relationship was one Hellosign unequivocally stated they were "thrilled" about as far back as last November:

https://www.hellosign.com/blog/announcing-the-hellosign-exte...

Re: Dropbox buys HelloSign (YC W11) for $230M

#92

Post by tombert »

I don't mean to ask this ironically; how do these companies come up with these numbers during a sale? Jet.com was sold for $3 Billion, but Craftsman Tools was sold for only $900 Million.

I don't really know anything about HelloSign, but can someone tell me roughly why they might have come up with the $230M number?

Re: Dropbox buys HelloSign (YC W11) for $230M

#93

Post by tomasien »

tombert wrote: post #92

I don't mean to ask this ironically; how do these companies come up with these numbers during a sale? Jet.com was sold for $3 Billion, but Craftsman Tools was sold for only $900 Million. I don't really know anything about HelloSign, but can someone tell me roughly why they might have come up with the $230M number?

revenue * multiple

let's say $10m in ARR * a 23x multiple

The way you get to the multiple is a combination of how fast the revenue is growing, how long you think that will keep up, and the margin of the revenue.

Craftsman Tools, for example, was probably not growing much or shrinking and likely had low margin revenue but I don't know.

Re: Dropbox buys HelloSign (YC W11) for $230M

#95

Post by siruncledrew »

tomasien wrote: post #93
tombert wrote: post #92

I don't mean to ask this ironically; how do these companies come up with these numbers during a sale? Jet.com was sold for $3 Billion, but Craftsman Tools was sold for only $900 Million. I don't really know anything about HelloSign, but can someone tell me roughly why they might have come up with the $230M number?

revenue * multiple let's say $10m in ARR * a 23x multiple The way you get to the multiple is a combination of how fast the revenue is growing, how long you think that will keep up, and the margin of the revenue. Craftsman Tools, for example, was probably not growing much or shrinking and likely had low margin revenue but I don't know.

Would revenue or assets be used?

So once the accounting statements are reviewed, then most of the acquisition talk is just a discussion over a multiplier?

Re: Dropbox buys HelloSign (YC W11) for $230M

#96

Post by ascar »

rmkrmk wrote: post #64
jasonsync wrote: post #62

Earlier quoted context omitted.

And easily accessible to Dropbox employees?

Well, I guess they do have access to all of your files anyway?

If they do it right some Dropbox employees might have access to it, but it should definitely not be easy.

Think putting shards of encrypted data together and then decrepyting it by hand to get to the actual file. That's definitely (highly senior) dev level access and a lot of manual work.

Re: Dropbox buys HelloSign (YC W11) for $230M

#97

Post by Dwolb »

siruncledrew wrote: post #95
tomasien wrote: post #93

Earlier quoted context omitted.

revenue * multiple let's say $10m in ARR * a 23x multiple The way you get to the multiple is a combination of how fast the revenue is growing, how long you think that will keep up, and the margin of the revenue. Craftsman Tools, for example, was probably not growing much or shrinking and likely had low margin revenue but I don't know.

Would revenue or assets be used? So once the accounting statements are reviewed, then most of the acquisition talk is just a discussion over a multiplier?

It all factors in but realistically with SaaS there is little in terms of fixed assets.

Most likely a lot of the additional factors for the valuation multiple calculation are going to be around efficient customer acquisition, sales cycle payback periods, and different income percentages (operating, net). X factor would be if other competitors of the acquirer are also bidding on the acquiree.

Re: Dropbox buys HelloSign (YC W11) for $230M

#98

Post by tschellenbach »

nostromo wrote: post #83
chatmasta wrote: post #75

Given DocuSign's market cap of $8B, does this price seem low?

DocuSign makes like $700 million a year. HelloSign makes less than $4 million a year (according to Crunchbase at least). If Dropbox was buying revenue then by Docusign's multiple they handsomely overpaid for HelloSign. But they're not buying revenue, so who knows if they over or underpaid.

That would be a rather insane 50x revenue multiple. Doesn't sound right

Re: Dropbox buys HelloSign (YC W11) for $230M

#99

Post by santiagobasulto »

nostromo wrote: post #83
chatmasta wrote: post #75

Given DocuSign's market cap of $8B, does this price seem low?

DocuSign makes like $700 million a year. HelloSign makes less than $4 million a year (according to Crunchbase at least). If Dropbox was buying revenue then by Docusign's multiple they handsomely overpaid for HelloSign. But they're not buying revenue, so who knows if they over or underpaid.

That can't possibly accurate, right? If their revenue is 4M, the acquisition is 57x their rev. That's crazy. Except if they have long time contracts signed maybe?

Re: Dropbox buys HelloSign (YC W11) for $230M

#100

Post by scarface74 »

gruez wrote: post #21
chrisseaton wrote: post #16

Earlier quoted context omitted.

The law isn’t like programming. The reason you sign something is to show clear intent that you intended to agree to something. Nobody’s under the impression a paper signature cannot be forged either. It’s no different. It’s social not mathematical.

Then that leads to my second question >Why do we need them at all? Why not just email the contract, and the person replies back with "I agree to this"? Simpler and cheaper than paying $150/year.

I’ve signed offer emails and “agreement to represent” recruiter emails by just replying “I agree” a few times.
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