I almost sold Baremetrics for $5M • Hacker News Board

Re: I almost sold Baremetrics for $5M

#121

Post by cosmodisk » Fri, Jan 10, 2020, 10:33 PM UTC

ngngngng wrote: post #51

There's got to be a business in here somewhere. A company that acts as a middleman that sorts through all your financials for you, does all the communicating, drafts all legal paperwork and just gives you quick regular updates through the process. That way you can keep running your company during all of this madness. I wish I knew more about selling and acquiring companies since it seems like a business well worth la…

I work for a relatively small company.It is simple as well,it sells training. If we'd have to supply all the necessary info to a company that'd take care of it, that alone would probably take months and months and they'd still have to query back and fort every day.

Re: I almost sold Baremetrics for $5M

#122

Post by hinkley » Fri, Jan 10, 2020, 10:34 PM UTC

georgeecollins wrote: post #34

verganileonardo wrote: post #15

Earlier quoted context omitted.

Could you provide examples of that?

Jeffrey Kaplan, in his book "Start Up", would talk about how Microsoft would do this in the days when it was particularly powerful. Think about it this way: You always want to learn about opportunities and potential competitors. The biz dev team may say, hey we should maybe acquire this company, and the product people may say, no this is a good idea but we should copy it. It doesn't have to stem from a sinister inten…

Every large or strong human goes through a phase in life where they learn the hard way that they have to be extra careful not to smash things. The bigger you are, the less sympathy you get (you clumsy oaf).

Microsoft is fond of workaholic coders and bizdevs. The number of those who are Big and Tall is small, and the number of workaholic coders who are also weightlifters is tiny. So you look at things that are completely obvious to you and the other person has absolutely no framework for contemplation. And if you are living by the Golden Rule (who has the gold makes the rules) then you don't have to learn anything at all.

But it sure would be nice for the rest of us if they did.

Re: I almost sold Baremetrics for $5M

#123

Post by xwowsersx » Fri, Jan 10, 2020, 10:34 PM UTC

Can breakup fees be negotiated in these kinds of deals to protect the would-be acquired company? Seems like the company to be acquired bears all the risk.

Re: I almost sold Baremetrics for $5M

#124

Post by unlinked_dll » Fri, Jan 10, 2020, 10:36 PM UTC

zyang wrote: post #45

socalnate1 wrote: post #3

Two quick thoughts on this. 1) The amount of transparency that this company shows is insane. I have a hard time imagining any one else in this situation sharing the way they do. I hope it works out for them long term. 2) The due diligence work they did for this deal was absolutely not a waste (even if they never sell the company). Having gone through this process once will make it orders of magnitude easier if they s…

It wouldn't feel great seeing this as an employee of the company. The only reason you are not sold to the highest bidder was because the ceo got played.

I fucking wish some of the companies I've been at sold to the highest bidder when they had the chance.

Exits are better than layoffs.

Re: I almost sold Baremetrics for $5M

#125

Post by in3d » Fri, Jan 10, 2020, 10:37 PM UTC

I wish people would name names. That would discourage this type of behavior.

Re: I almost sold Baremetrics for $5M

#126

Post by hinkley » Fri, Jan 10, 2020, 10:41 PM UTC

ngngngng wrote: post #51

There's got to be a business in here somewhere. A company that acts as a middleman that sorts through all your financials for you, does all the communicating, drafts all legal paperwork and just gives you quick regular updates through the process. That way you can keep running your company during all of this madness. I wish I knew more about selling and acquiring companies since it seems like a business well worth la…

The lesson I'm taking away from this is that if you're going to go through the steps of a M&A process, make sure there's something in it for you besides just the check at the end of the process.

Off the top of my head, having a very detailed understanding of your burn rate and assets should be useful information for any business. Maybe you have some unprofitable projects, or maybe just for applying for a business loan.

When we take risks we try to account for Murphy's law. If you've looked at things like unpaid bills and back taxes, maybe the confidence intervals get a little better?

Re: I almost sold Baremetrics for $5M

#127

Post by mritchie712 » Fri, Jan 10, 2020, 10:41 PM UTC

czbond wrote: post #111

Anyone have an idea on why 3.7x revenue for SaaS was considered a fair valuation? I thought SaaS was always closer to 5-6x

BareMetrics MRR is public, check it out:

https://demo.baremetrics.com/#start_date=2019-01-01&end_date...

20% growth last year or 1.7% per month. That's considered slow for a SaaS. That's likely what's driving the 3.7x multiple.

Re: I almost sold Baremetrics for $5M

#128

Post by cosmodisk » Fri, Jan 10, 2020, 10:45 PM UTC

aidos wrote: post #29

LeifCarrotson wrote: post #11

Earlier quoted context omitted.

Similar to a home purchase...and I imagine that even with an immaculate company or home you can always find something to satisfy that clause and give you an out.

Unless you’re in England, where people can drop out or change their price on a house sale or purchase at any time, even after months of legal red tape.

English process of buying a house is an equivalent of 5 seconds film thst is being played in slow-mo for 20 hours. Again, England has some very odd land nad property ownership types thst simply don't exist anywhere else in the world and usually complicate the process a lot. Regardless of it, the lawyer are alway the winners on this one.

Re: I almost sold Baremetrics for $5M

#129

Post by hinkley » Fri, Jan 10, 2020, 10:46 PM UTC

cosmodisk wrote: post #119

hinkley wrote: post #32

Earlier quoted context omitted.

I believe that's also not one but two episodes of Silicon Valley. The second time they believe they've figured out how to avoid it happening to them again.

Silicon Valley,while hilarious,has tons of invaluable business lessons.I think I could probably even say it's one of the best series about business. It covers absolutely every aspect of building, growing, maintaining and ultimately selling a business.

Mercifully, I've avoided any conversations like the Season 1 finale, but I think we all laughed because we recall some absolutely ridiculous rabbit hole we went down at some point. Once in a while you learn something surprising (which just reinforces the behavior), but mostly you just feel foolish. Especially if you get caught doing it.

Re: I almost sold Baremetrics for $5M

#130

Post by cosmodisk » Fri, Jan 10, 2020, 10:53 PM UTC

mytailorisrich wrote: post #6

Due diligence works both ways and it pays to do your homework on potential buyers and to ask them to prove their claims, or even ask them to put some money down, before proceeding. I don't know the company or what they do but cynical me can also imagine a third party pretending to want to acquire in order to gain inside knowledge.

Remember having a meeting with a charity org. They wanted to spend quite a bit of money on a CRM implementation.We had a few different companies in a room.After going through the entire block of ideas of what and how they want,my manager asked them: have you got money for this? Turns out their sponsor promised the money but then there are conditions and etc..This was for a simple dev project...