A bird in the hand.
Ask HN: Sell my startup for $14M because I can't raise $2M?
271–280 of 336 posts
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#272Keep in mind that you also can try to sell the company for more money if there's competition. Competition from other buyers, competition from investors. You probably want to try going down both roads to see how hard it is to sell or raise money. At that point you'll know more and you can feel more comfortable with the decision, whichever one you make. Congratulations and best of luck!
You can sell the company for more money if there's more competition. That was one of the lessons of The Hard Thing About Hard Things. This is actually the best book to read about this particular situation.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#273IMO 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…
Re the "know how to hustle" thing - building a successful business takes a lot of "hustle". If someone succeeds at that, they've proven that they can do it. The notion that someone needs to meet some invisible bar of proof beyond building a successful company is - to me - yet another symptom of the damage SV has inflicted on the minds of a generation of technically inclined enterpreneurs.
If you don't like that word, use persistent, relentless, scrappy, or whatever. It's not an invisible bar beyond something. It's a trait that increases your odds of success.
Don't put words in my mouth
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#274Earlier quoted context omitted.
At 14M you are already in the territory where a jet card is definitely something you could afford. If I had that sort of money, I would use a jet card for flights within a continent and go first class commercial for intercontinental (and definitely use VIP terminal or at least meet and greet services). But at 50M you might be looking at fractional jet ownership already. There is a difference and it's a big one.
Let's pretend someone has arrived upon 14 million in after tax net worth (not the case in OP's scenario). You want to be set "forever" and not dependent on working again. You'll probably work, but may not be able to replicate the same financial success you experienced previously, so it's hard to count on future income. There's a debate around what's called the "Safe Withdrawal Rate" which is financial-market speak fo…
> You'll end up with about $320k after tax to spend. Not bad. But not what most people think about as rich, either.
I think that's firmly in what people consider to be rich, and certainly is by any reasonable metric. I may not be 'jet rich', but that's an incomprehensible amount money for 99% of the people on this planet.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#275Earlier quoted context omitted.
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.
Disagree. $300K/yr with $10MM in the bank will absolutely feel rich. The reason people with $300K household incomes in Boston/NYC/Silicon Valley don't feel rich is because out of that $300K, they're buying housing and saving for retirement/college/rainy day. Take that away, and $300K spendable is a fairly luxurious lifestyle.
Disagree disagree.
Live anywhere near Silicon Valley and tell me 300-400k/yr is rich. You'd be lucky to get a nicely located condo at that income level.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#276There are sooo many alternatives, not just two.
For instance you could partner with another company, showing them the open contracts and make deals with them to share the price when a project is successful.
You could try to put your knowledge into low-thinking-step-by-step guides and raise a team of student workers to support you.
You could buy another small, struggling company, taking a bank credit for the buy. (a bank is much more willing in such a case than when you just want to grow)
And this is just what I come up with laying in my bed at 7 in the morning. There are dozens more options. As entrepreneur it is your job to find a solution without being limited by common ideas.
PS: A profitable, vertical, enterprise solution provider is not a company you raise money from investors with. You don't have the growth factor an investor needs. Grow with increasing profit. Grow with taking on more than you can handle and then keeping your customers continue with you despite you not being able to deliver on time. That's how this business works.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#277Earlier quoted context omitted.
At 14M you are already in the territory where a jet card is definitely something you could afford. If I had that sort of money, I would use a jet card for flights within a continent and go first class commercial for intercontinental (and definitely use VIP terminal or at least meet and greet services). But at 50M you might be looking at fractional jet ownership already. There is a difference and it's a big one.
Let's pretend someone has arrived upon 14 million in after tax net worth (not the case in OP's scenario). You want to be set "forever" and not dependent on working again. You'll probably work, but may not be able to replicate the same financial success you experienced previously, so it's hard to count on future income. There's a debate around what's called the "Safe Withdrawal Rate" which is financial-market speak fo…
$14MM isn't really as much as some folks seem to think. As you point out, there are expenses associated with having that much money. There are constraints to what you can spend while still having enough money to work for you, so that you don't have to.
Buying a jet, with just that much money for assets, is probably a bad choice.
You're going to want a house, perhaps more than one. You're going to want someone to manage your assets. You're going to want vehicles. You're going to want to do something to increase your security. You're going to want to keep at least one lawyer on retainer. Things like that...
What that money is enough to do is make more money. Once you have a goodly amount of capital, it becomes much easier to make more money.
So, instead of them buying a jet, they should hire a good finance manager and lots of insurance. I'd also recommend living frugally while using the bulk of their newfound wealth to increase their wealth.
$14MM is good money but it's not really 'fuck you' money. If they insist on buying a plane, I'd recommend a used Piper Cub. That's about all they can realistically afford, at least at first.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#278Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#279Earlier quoted context omitted.
Disagree. $300K/yr with $10MM in the bank will absolutely feel rich. The reason people with $300K household incomes in Boston/NYC/Silicon Valley don't feel rich is because out of that $300K, they're buying housing and saving for retirement/college/rainy day. Take that away, and $300K spendable is a fairly luxurious lifestyle.
I suppose it depends on what feels rich. The kinds of places you go when you are actually rich cost thousands or tens of thousands of dollars a day, and they have shops where most of the stuff costs tens or hundreds of thousands, and everyone around you is carrying, flying, driving, or sailing things that cost hundreds of thousands or millions.No one I know who makes 300K (after tax) - unless they have a net worth th…
There's a huge difference between $300k/year and $300k/year with 7 figures in the bank. The latter means you can afford a down payment on decent property anywhere, which means you are actually making an investment instead of pissing everything away on rent.
If you don't feel rich at that point you need to get your head straight. Obviously there is always someone richer, but you are deep deep into the 1% of the richest country in the world and you need to be thinking about your greater life's purpose.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#280Earlier quoted context omitted.
It's a team of people, so the $14MM wouldn't all go to a single person. It's certainly a lot of money, but it may not be retire in comfort money.
I'm assuming based on the way OP posted he or she owns 100%. If it's split two ways, I'd still take it. 5 or 6 ways? Then that changes the conversation.
Also, if it is split multiple ways then the decision probably isn't entirely up to the OP.