YC Help: I need Acquisition Advice

The company I am a part of is in talks with another company and I am wondering if a 3-4 times earnings buyout would be fair?

Some background: the Start-up is 8 months old, and is primarily e-commerce based with plans to move into corporate and retail avenues. The growth has been exponential, and we have been profitable since 2 months after launch, with profits growing at least 110% each month (ie, we were profitable 16k one month, then the next we were 35k profitable, last month we hit 160k in Net Profit).

P.S. - Market Size: Every Internationally Traveling U.S. Citizen.

P.P.S. - I would not stay after the technology integration and neither would half of the employees.

Like most everything else, "it depends".

Do you have revenue? What the COA vs. TLV for each customer? What's the market? What's the growth potential? Do you have a better than average chance of success if you make a go of it on your own? Do you potentially have blocking patents that this other company might need? Could you get funding on your own?

(Yes, I know you answered some of these questions above)

3-4 times is nothing spectacular, really. 10x is usually getting in the range of very good, but there is no static multiple that applies universally.

The deal sucks. You're getting screwed. Net present value is a lot more than 3-4x profits. You could get a much better deal almost anywhere.

BTW, I haven't heard of anyone doing this, but you could look into NASDAQ portal. It's about 8 grand to register and is pretty similar to an IPO, but without Sarbanes-Oxley requirements. But, again, I know very little about this process.

trying to keep company names off the net as well as my name... so do ycnewsid456[at]mailinator(dot)com

Do you really want to sell? It sounds like you could make more money if you stay around and try to keep scaling. But if you really want to focus your attention somewhere else, sure, sell for whatever you can get.

How long do you think you can keep the exponential growth up? Another couple of months? Or do you think your company can really dominate the travel (or whatever area you're in) marketplace?