31–37 of 37 posts
Get them to give you an offer before you spend any significant money or time on this thing. If they're serious about it, the should give you numbers.
Your valuation is a multiple of your revenue. If you grossed $500,000 this year, expect $750,000 next year, and want a 2x forward valuation, you're worth --- do the math. If you're really small, and that number is really low, remember that the bottom side of the valuation is probably what an "awesome signing bonus" would be for a big company. As in, you wouldn't accept a buyout that equated to nothing more than a pla…
"Your valuation is a multiple of your revenue. If you grossed $500,000 this year, expect $750,000 next year, and want a 2x forward valuation, you're worth --- do the math." When I sold a consulting business, this was a good starting point, but how many online startups are valued this way? I'm not saying that it's not ridiculous that some properties get sold for gazillions with no revenue (and no prospect of it), but…
Basically you're worth what people are willing to pay (which isn't very helpful, I know). See how you fit in strategically with the potential acquirer, and see how much leverage that gives you.
Earlier quoted context omitted.
If anything it will only add uniques thus valuation thus offers on the table thus better deal
On the other hand, it will cause this thread to come up in a Google search for " acquisition", which could have a negative impact on the deal. (Although putting a link in a user profile might not have the same consequences...)
#1) Get a mergers and acquisitions attorney NOW. It will be expensive, but you don't want to not get something you don't have coming. There are many ways to structure these deals, and if you throw employment into the equation, you are looking at even more ways to come out ahead or get screwed. Talk to a speclialized attorney NOW. Why so urgent? You do not want to appear dumb to your potential purchaser. To appear pre…
Your valuation is a multiple of your revenue. If you grossed $500,000 this year, expect $750,000 next year, and want a 2x forward valuation, you're worth --- do the math. If you're really small, and that number is really low, remember that the bottom side of the valuation is probably what an "awesome signing bonus" would be for a big company. As in, you wouldn't accept a buyout that equated to nothing more than a pla…
"Your valuation is a multiple of your revenue. If you grossed $500,000 this year, expect $750,000 next year, and want a 2x forward valuation, you're worth --- do the math." When I sold a consulting business, this was a good starting point, but how many online startups are valued this way? I'm not saying that it's not ridiculous that some properties get sold for gazillions with no revenue (and no prospect of it), but…
Consultancies commonly sell for 1.5x-2x, because staff turnover means the acquiring company is really only getting a pipeline, some relationships, and maybe a few staff.
Enterprise product companies commonly sell for around 5x. Security valuations oscillate between 5x and 15x (on the wildly successful side). Sometimes new, small startups sell for ridiculous high multiples because otherwise the total number would be too low.
I'm not saying, "take your revenue and multiply by two". I'm saying, "think about the value you provide your acquirer in the abstract", and then put a multiple to it.
First thing: get over it. Companies "sniff around" like this all the time. You're likely far away from an actual acquisition. It's to the point now where we almost don't talk with anybody without them asking for financial details of our company (to suss out the possibility of an acquisition). Get them to give you an offer before you spend any significant money or time on this thing. If they're serious about it, the s…
#1) Get a mergers and acquisitions attorney NOW. It will be expensive, but you don't want to not get something you don't have coming. There are many ways to structure these deals, and if you throw employment into the equation, you are looking at even more ways to come out ahead or get screwed. Talk to a speclialized attorney NOW. Why so urgent? You do not want to appear dumb to your potential purchaser. To appear pre…
I believe most of these potential deals fall through. If you spend a ton of money on an M&A attorney every time someone mentions acquisition, you're screwed.
Does anyone have evidence that costs diminish in this example?