Need to sell my chrome extension, 130k users.
Ask HN: Where can I buy real software companies?
121–130 of 171 posts
Re: Ask HN: Where can I buy real software companies?
#122I sold Bingo Card Creator through FEI ( http://feinternational.com ) and have nothing but good things to say about them. Something like 20% of their listings are SaaS businesses. The going rate for a SaaS business is roughly 3X yearly SDC ("seller discretionary cashflow" -- revenue minus costs required to run the business as opposed to e.g. the owner's salary, distributions, interest expense, etc). It is closer to 2X…
Could just be me but it feels like feinternational always show a very inflated price. 3x seems too much specially for companies that are barely 1 year old. Also, it is extremely difficult to sign an NDA just to inquire more about a sale as feinternational does not give any details upfront. Totally understandable that the company in question wants to maintain its privacy, secrets etc but this is a difficult situation.…
I hear a lot of talks about NDA's but I have never heard of one being enforced. Anyone else seen where an NDA was successfully enforced?
Re: Ask HN: Where can I buy real software companies?
#123Why buy another company (as opposing to focusing on your existing business)?
It depends on what skills you bring to the table. (Personally) I know I can execute and grow. But I can't for the life of me find an idea to get started with.
Also, if you already have an existing business (such as the OP), then you may be able to bring some cost savings (therefore more profit) than someone coming in cold.
Or if you already have an existing client base, adding another business to the mix means you may be able to sell to them
Re: Ask HN: Where can I buy real software companies?
#124I run www.hearthstoneplayers.com
It's a profitable site (making enough profit the equivalent of a 2nd job), minimal upkeep - just managing/scheduling content/writers. If anyone is interested in taking it and scaling it or even automating it (it's about 2 years in and I don't mind letting it go and moving on to bigger stuff), I'm open to contact!
Re: Ask HN: Where can I buy real software companies?
#125Earlier quoted context omitted.
"you are buying yourself a job?" Bingo. And the prospect of growing the business to a point where it can sustain a team and be less reliant on you. If the business can run without any input from the founder a) why would they sell it? and b) if they did they would sell at a much greater multiple.
People might need to sell companies because of: 1) sudden financial hardship like hospital bills 2) a divorce court judge ordered it 3) a non-founding owner has no emotional attachment and wants to switch to another investment. Online companies that produce passive or near-passive income are bound to become obsolete quickly. The internet moves quickly in a lot of niches. The potential lifespan of the business affects…
Your fourth option, I think, is the most important one to understand here. Just about any business, assuming you have a competent employee or two, can kick along without your input for a while. But without you, the owner, actively putting in work? it's going to do worse this year than it did last year. It's gonna fade pretty fast. And yes, if you do need to ignore it for a while, selling it to someone who won't ignore it is a good option, too.
But it's just plain wrong to think that you can look at the current numbers and assume they will go forward without more input from the owner.
I would argue that the whole idea of 'passive income' when combined with the idea of a 'small business' is a little flawed, or really, a lot flawed. Owning a small business is not like owning stock in google. You are an active participant in the business. A small business owner is fundamentally different from someone who owns shares in a large corporation.
I kind of like using marxist terminology for it. We are bourgeois[1]. We are not full members of the capitalist class; we still need to combine our labor with that capital, or else it's all gonna go to shit pretty fast.
But the real takaway you need to understand is that owning a small business is not at all like owning stock in a large business. It's a completely different thing, and your return on investment capital should be very different (and in my opinion, much higher.)
[1]no, not necessarily in the 'poor taste in lawn furniture' sense. I don't even have a lawn.
Re: Ask HN: Where can I buy real software companies?
#126Earlier quoted context omitted.
It's counting the founder's salary as profit. In these small businesses? founders usually have to do a good bit of work. what do they say? you are buying yourself a job? if you're making 33.3% of $50k-$500K per year... the very top end of that is close to what you'd get working for someone else, and usually you don't have to put down a half million to get those jobs. So, while I don't think I'd sell you my company fo…
"you are buying yourself a job?" Bingo. And the prospect of growing the business to a point where it can sustain a team and be less reliant on you. If the business can run without any input from the founder a) why would they sell it? and b) if they did they would sell at a much greater multiple.
if a business owner insists on a much higher multiple, that usually has more to do with how much he or she enjoys that job they are selling you than it has to do with the fundamentals of the company.
Re: Ask HN: Where can I buy real software companies?
#127I'm planning to refocus my mobile app business, and while I had planned on just continuing on cashing the checks from my other apps, lately I've considered the idea of selling them and really concentrating 100% on the main one. A few questions: 1. What kind of cost do the popular escrow services charge? I assume it's percentage based, only on successful sale? 2. Do places like FEI sell apps, or just websites? 3. If n…
Here's a company that focuses on buying/selling apps specifically: http://www.appbusinessbrokers.com/
Re: Ask HN: Where can I buy real software companies?
#128Why buy another company (as opposing to focusing on your existing business)?
Tax write off? He's too profitable, perhaps!
Re: Ask HN: Where can I buy real software companies?
#129Earlier quoted context omitted.
Could just be me but it feels like feinternational always show a very inflated price. 3x seems too much specially for companies that are barely 1 year old. Also, it is extremely difficult to sign an NDA just to inquire more about a sale as feinternational does not give any details upfront. Totally understandable that the company in question wants to maintain its privacy, secrets etc but this is a difficult situation.…
I hear a lot of talks about NDA's but I have never heard of one being enforced. Anyone else seen where an NDA was successfully enforced?
Every civil court is backlogged with business misunderstandings / disagreements. People sue all the time for what may may not be legitimate reasons. All it takes is a simple majority of the jury for a victory. It's a highly subjective process whose most prized skill is the ability to sway a jury. More like coin toss, less like justice.
In business it's a bad idea to deceive business partners or to sign an agreement intending to ignore it. Your reputation will catch up with you, and don't be surprised when you get sued.
Re: Ask HN: Where can I buy real software companies?
#130I'm planning to refocus my mobile app business, and while I had planned on just continuing on cashing the checks from my other apps, lately I've considered the idea of selling them and really concentrating 100% on the main one. A few questions: 1. What kind of cost do the popular escrow services charge? I assume it's percentage based, only on successful sale? 2. Do places like FEI sell apps, or just websites? 3. If n…
Here's a company that focuses on buying/selling apps specifically: http://www.appbusinessbrokers.com/
hadn't seen them before, looks pretty good. thanks a lot.