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I sold TinyPilot, my first successful business

mtlynch.io

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Re: I sold TinyPilot, my first successful business

#281

Post by rexreed »

khaki54 wrote: post #279

Michael, initially I thought it was kind of a naive idea that wouldn't take off because there are so many tried and true and enterprise class alternatives. They are pretty clunky though. The immense care and diligence you have put into setting this up means the new buyers will have a great launching point with few surprises. Suffice to say, I would have liked to buy this thing for $600k, but I guess you dropped off m…

What terms would you have offered, including any seller financing, required lock-in or employment from Michael, etc? What would you have done with the product after acquisition?

Re: I sold TinyPilot, my first successful business

#282

Post by rexreed »

precompute wrote: post #265
codegeek wrote: post #100

"When you sell a business at TinyPilot’s scale, there’s no deposit. You can invest hundreds of hours into preparing reports for due diligence, reveal all your confidential business secrets, and spend thousands of dollars negotiating legal documents and still walk away with nothing if the buyer backs out." Great write up overall but as someone who has bought a couple of businesses, it is not just the seller who loses…

Adobe paid Figma $1Bn in termination fees!

That sort of termination fee would never be applicable to a small business like this, and it's often the small business that gets screwed, not a company that has raised a ton of money from VC with valuations in the billions, with a lot of vested interest from both investors and shareholders.

Re: I sold TinyPilot, my first successful business

#283

Post by lukan »

Etherlord87 wrote: post #276
lukan wrote: post #252

Earlier quoted context omitted.

Do you want to work for free for me? It won't be for nothing, you will be paid with experience!

Imagine I say my house burned down and I lost everything, and someone (here: neycoda) points out I haven't lost everything because I still own the land underneath the house. Pedantic? Maybe, but still correct. At no point would neycoda state it wasn't a negative outcome, just that "left with nothing" was not true. So in the analogy, it doesn't make sense to ask him if he would like you to put his house on fire... htt…

I am pedantic, when I think it helps clarity and understanding.

Here it does not. The goal of a sale is to make money, if there was no deal, than it was no success by that metric.

Re: I sold TinyPilot, my first successful business

#285

Post by khaki54 »

rexreed wrote: post #281
khaki54 wrote: post #279

Michael, initially I thought it was kind of a naive idea that wouldn't take off because there are so many tried and true and enterprise class alternatives. They are pretty clunky though. The immense care and diligence you have put into setting this up means the new buyers will have a great launching point with few surprises. Suffice to say, I would have liked to buy this thing for $600k, but I guess you dropped off m…

What terms would you have offered, including any seller financing, required lock-in or employment from Michael, etc? What would you have done with the product after acquisition?

I think the terms they came to were pretty generous to the buyer. Michael brings a lot of value to the deal as a seller, there isn't going to be a hidden gotcha, more likely hidden benefits of forward thinking you'd uncover over time.

Lock-in or additional hours from Michael wouldn't be needed, the product isn't awfully complex, and I'm sure everything is more documented than you would expect.

What I would have liked to do would be to use the company as a scaffold to develop a larger mid-market offering. I don't like mid-market that much, but they are much more willing to cobble together a better, cheaper solution, rather than just buy whatever package that HP or Dell is offering.

I would also try to sign up and train some government focused resellers to see if we can make progress in that segment. USG is very favorable to small businesses. Control over the supply chain would be a selling point to USG as well.

I would also try to partner with someone like System76 or a similar US manufacturer to make the existing TinyPilot product be a recommended KVM component for their server and small compute offerings.

Re: I sold TinyPilot, my first successful business

#289

Post by einarvollset »

dheera wrote: post #198
Aurornis wrote: post #191

Earlier quoted context omitted.

Common fallacy is to imagine that the exact same deal at the same price would have happened without a broker. A lot of people are going to look at this and imagine that if they just eliminated the broker, they'd get an additional $88,900 in their pocket. That's not how it works, though. Without a broker you may not find a buyer at all. If you do, you might not know how to price the business. Even if you could find th…

> Common fallacy is to imagine that the exact same deal at the same price would have happened without a broker. > Without a broker you may not find a buyer at all. This only applies if your business isn't super profitable and you're looking to get rid of it. If you have a wildly successful business and you enjoy running it, you don't need to find a buyer, you can wait until one comes along.

I do deals a fair bit larger than this, and so am obviously biased, but while this sounds appealing, the fact is that only once or twice out of the couple of dozen times I’ve heard back from founders that decided to DIY their M&A have I not thought to myself “you got taken to the cleaners”.

The buyers on the other side are professional buyers. They get promoted by buying great companies for as little as possible. Most founders will only ever sell one business, if that. Buyers don’t care about their reputation with you, they do care about their reputation with a banker they may interact with multiple times.

Re: I sold TinyPilot, my first successful business

#290

Post by broner »

xyst wrote: post #35

Wild. I vaguely remember this founder spending an obscene amount of money on some boutique firm to give homepage a small update. Seems he exited the Google grind about 6 years ago. I guess salaries were between $180-250K during that time frame. Google grinder for 6 years: $1,080,000-$1,500,000 Entrepreneur: “$920k over four years (with sale)”, but doesn’t include the 2 bombs he had prior to successful exit. (None of…

Should be a tax advantage to the non-grind income. $920k with 20% fed + 5% state capital gains tax?
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