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The Founder’s Guide To Selling Your Company (2014)

justinkan.com

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Re: The Founder’s Guide To Selling Your Company (2014)

#31

Post by mbesto »

jacquesm wrote: post #18
nodesocket wrote: post #4

This is great, but I'd love to see a post on selling a side business (no outside investment) and less than $10,000 a month in MRR.

Find a couple of your competitors and set up a bidding process, that is probably the best way to get the maximum out of a company like that. Aim for 10 years net or so, and be sure to stipulate that you reserve the right to refuse all offers. I've written up a HN thread about this subject a long time ago: https://jacquesmattheij.com/how-to-sell-your-company

From one M&A advisor to another - this is good advice.

Re: The Founder’s Guide To Selling Your Company (2014)

#32

Post by actualanswer »

justin wrote: post #16

Hey HN, Justin here (the post's original author). Didn't expect this to get posted again. I'm happy to answer any questions here about selling your company. I recently started a new company, Atrium, aiming to make legal services (such as M&A) for startups and tech companies easier as well.

Why don't you snap anymore? I need my morning dose of Fitness is tha first step to greatness

Re: The Founder’s Guide To Selling Your Company (2014)

#33

Post by FollowSteph3 »

justin wrote: post #12
throwawayyx96 wrote: post #11

At the time of its sale to Amazon, I remember wondering how twitch could only be worth 1 billion compared to something like WhatsApp being worth 20 billion. It was purely from an engineering standpoint that I considered what twitch was doing to be vastly more impressive. It's three years later and Amazon hasn't been too overbearing with the changes they've made, but I wonder if JKan believes he got fair value for his…

Life is what you negotiate :) Taking $970mm seemed like a good deal given the level of risk. So from an expected value perspective it was a fair trade. Twitch has grown much since then, but you can't have regrets when it comes to trades.

Exactly, it could have gone the other way and the value could’ve crashed. As long as you got a fair price you should never look back at what could’ve been.

Back in the dot com days I had a friend who sold his options early. He made enough to pay off his house cash. The price kept going up and he could’ve been a millionaire. But then as we all know the bottom fell out and his company crashed hard, almost overnight. He was happy he sold out. Had he waited he may have gotten nothing. He may not have cashed out st the peak but he definitely got a good deal for his options. And every time some tells him he should’ve waited to get millions he tried to remind them he probably wouldn’t gotten zero if he waited. Most people still don’t get that, they just focus on what the highest value could’ve been, even if that’s the least likely price he would’ve gotten in reality.

Re: The Founder’s Guide To Selling Your Company (2014)

#34

Post by FollowSteph3 »

AndrewKemendo wrote: post #3

I've read this a few times and having been through up and down periods it's clear that the most important part of this, is the following: The best time to sell your startup is when you have many options. It needs to be really emphasized that this is a very rare place for the vast majority of startups. That means this advice isn't generally applicable. Which brings up the implicit question, why would you decide to sel…

Sometimes it can just be that you’re tired and want to try something else.

Think of a job, Say after 10-20 years of very hard work. You probably either want a promotion or have changed companies. Just done something different. Sometimes for an owner the only way to do something different is to sell.

Another common reason is to get some skin out of the game. As an analogy do you invest all your stocks into one company? As an owner often all your finances are directly tied to the company’s success. It can be wise to diversify from just your company.

There are a number of reasons but these are just two common ones unrelated to how the company is doing, good or bad.

Re: The Founder’s Guide To Selling Your Company (2014)

#35

Post by rockytocky »

justin wrote: post #16

Hey HN, Justin here (the post's original author). Didn't expect this to get posted again. I'm happy to answer any questions here about selling your company. I recently started a new company, Atrium, aiming to make legal services (such as M&A) for startups and tech companies easier as well.

Is it cool if I ask a question not related to selling your company? If so, if you could go back to the justin tv days, what would you do differently?

Re: The Founder’s Guide To Selling Your Company (2014)

#36

Post by plinkplonk »

justin wrote: post #15
AndrewKemendo wrote: post #3

I've read this a few times and having been through up and down periods it's clear that the most important part of this, is the following: The best time to sell your startup is when you have many options. It needs to be really emphasized that this is a very rare place for the vast majority of startups. That means this advice isn't generally applicable. Which brings up the implicit question, why would you decide to sel…

Interesting point. I could also write "The Founder's Guide to Selling Your Company When You Have Few Options" based on my experiences. It is a much more horrible process. Re: why sell? 970 million reasons. Biggest one was that it seemed like good value for what we had. Another reason: from my perspective (it may be different for other people involved) we were also at an inflection point where there was a steep power…

> I could also write "The Founder's Guide to Selling Your Company When You Have Few Options" based on my experiences.

I hope you do this someday. It would be highly valuable to many founders.

Re: The Founder’s Guide To Selling Your Company (2014)

#37

Post by luminati »

justin wrote: post #16

Hey HN, Justin here (the post's original author). Didn't expect this to get posted again. I'm happy to answer any questions here about selling your company. I recently started a new company, Atrium, aiming to make legal services (such as M&A) for startups and tech companies easier as well.

Isn't getting a term sheet from a VC orthogonal (and potentially relationship damaging) while you are actively looking for an acquisition?

Re: The Founder’s Guide To Selling Your Company (2014)

#38

Post by justin »

luminati wrote: post #37
justin wrote: post #16

Hey HN, Justin here (the post's original author). Didn't expect this to get posted again. I'm happy to answer any questions here about selling your company. I recently started a new company, Atrium, aiming to make legal services (such as M&A) for startups and tech companies easier as well.

Isn't getting a term sheet from a VC orthogonal (and potentially relationship damaging) while you are actively looking for an acquisition?

No. I think you can credibly claim after the fact that you wanted to understand what all the options were. Which is probably true for most founders.

Re: The Founder’s Guide To Selling Your Company (2014)

#39

Post by justin »

rockytocky wrote: post #35
justin wrote: post #16

Hey HN, Justin here (the post's original author). Didn't expect this to get posted again. I'm happy to answer any questions here about selling your company. I recently started a new company, Atrium, aiming to make legal services (such as M&A) for startups and tech companies easier as well.

Is it cool if I ask a question not related to selling your company? If so, if you could go back to the justin tv days, what would you do differently?

Hard to say because so many things we did wrong were life/business lessons that we probably had to do wrong for me to be sitting here telling you I'd do them differently.

Are you asking what I would do differently if I started a new company today?

Re: The Founder’s Guide To Selling Your Company (2014)

#40

Post by justin »

actualanswer wrote: post #32
justin wrote: post #16

Hey HN, Justin here (the post's original author). Didn't expect this to get posted again. I'm happy to answer any questions here about selling your company. I recently started a new company, Atrium, aiming to make legal services (such as M&A) for startups and tech companies easier as well.

Why don't you snap anymore? I need my morning dose of Fitness is tha first step to greatness

I started a new company (Atrium) and that occupies all my spare mental energy. When I was investing I felt like I had to fill my day up with something, hence snapping all the time.

I do occasionally post Q&As on Instagram stories now: @justinkan

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