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Ask HN: Where can I buy real software companies?

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Re: Ask HN: Where can I buy real software companies?

#61
post #8

I 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…

Out of curiosity, how do growth (and churn) factor into these valuations?

Re: Ask HN: Where can I buy real software companies?

#62

Earlier 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.…

That's to protect the broker, not the company. They don't want you to bypass them.

Good call - that makes total sense! They get confirmation of the identity of the inquiry / lead before you can contact the owner directly.

Re: Ask HN: Where can I buy real software companies?

#63
post #52

Would you like to purchase yipgo.com? Feel free to email me.

Your business seems interesting. May I suggest you use HTTPS in your login/registration forms? SSL certificates can be as cheap as US$ 9/year and your users will feel more secure while using your site.

One of the many tweaks it needs.

Re: Ask HN: Where can I buy real software companies?

#65

Would you like to purchase yipgo.com? Feel free to email me.

needs more demo... the bubble screen shots should be clickable to see the whole thing.

Agreed... let someone try it out by themselves. A screencast of someone using it would also be useful (think laracasts style screencast or similar). Being a user of this product really appeals to me (aligns with some stuff I already do), but the marketing is a bit light to convert me.

Re: Ask HN: Where can I buy real software companies?

#66
post #8

I 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.…

[deleted]

Re: Ask HN: Where can I buy real software companies?

#68
post #35

Earlier quoted context omitted.

I don't know why you are downvoted. The $500k/year business does , conservatively, cost $2-3 million (using the common "5x the yearly revenue" formula).

Valuing companies based on revenues is a bit of a stretch in my mind. Actual income/earnings/cashflow makes a lot more sense. If you don't take into account expenses then you get some really wacky valuations: ie a company is in the business of selling houses (or other large cost item) for a small percentage higher than they bought them. If you don't take into account the cost of buying the house and running the busin…

There is a word for that: EBITDA

Re: Ask HN: Where can I buy real software companies?

#69
post #47

I would like to sell my business. You'll need to know C++ and care about the Windows desktop market. I get about 8K downloads every month. I want $225K which is 5x revenue. I don't know if I'm entirely serious. It just makes money and I don't work it properly. It should make $90K-$110K if someone cared about it.

I know C++ and care about the Windows desktop market but don't have that money. Out of interest, what software is it? What sort of market? Do you need assistance or another developer?

Re: Ask HN: Where can I buy real software companies?

#70

Earlier 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.…

That's to protect the broker, not the company. They don't want you to bypass them.

I would think it protects the company just as much. I've never sold a company but I'd imagine that people often don't want their customers and/or employees knowing that they're shopping the company around. Requiring an NDA before the company name is shared presumably makes it significantly less likely that word will spread in undesired ways...
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