Loading...
Answers
MenuAdvice on how to go about selling my startup? Team is moving on to other things but believe our startup (an iOS app) is valuable to the right buyer
This question has no further details.
Answers
Like any sale, it's all about building a funnel and identifying qualified buyers. The best way to do this is to ask, who do we share a similar customer with that would like to sell what they do to our users, or that our product helps improve their product.
Companies get bought when there's overlap in the customers, or you fill the white space in their strategic map so they can move faster by buying vs. building themselves.
Once you have the list, then you'll want to create a spreadsheet (hopefully you have 12-20 names) and then identify these 3 people at each company.
CEO - making the final decision.
Corp Dev - it's actually their job to buy you!
Product Manager - internal champion that will decide if you're the right fit for them.
Sometimes these can all be one person (i.e. the CEO) or only 2 people - either way, you'll want to build a relationship with each on quickly by getting an introduction.
You don't want to come off as "hey, we want to sell what we've built" but more, "hey, I think we share a similar customer base and could do something together that would be mutually beneficial". That will get you a meeting.
If you start with 12 companies and do the work, you should be able to get 3 of them competing to purchase your startup and you can use this as leverage.
The key is to get them all to the same point, at the same time (i.e. giving you a term sheet or offer). You don't want one to move to fast, and not let you get the other interest going - or they might pull out of the deal from your lack of decisiveness.
I've written about this in more depth here:
http://maplebutter.com/7-tips-for-getting-acquired/
Hope that helps.
Very unlikely there is any value. The value of a startup is mostly in its people, the founders, etc.
Might be hard to get a bite without at least some of the team members staying on, but worth checking out : http://exitround.com/
It is sad that you must sell a start-up, and your team is moving on, but before you sell the start-up here are few things you need to know first.
There is huge (10x+ valuation difference) between you approaching someone and someone approaching you. This is a very time-consuming process and can take six months easily. Ideally, one Co-founder must pursue this full time. If you are looking to sell, the chances are business has stagnated or you have lost interest and want to move on. You will not get premium valuation if these are the reasons. Also, for SaaS start-ups, the industry standard is often 1.5x to 3x. It should be little more if the buyer sees more value, but it will always be something realistic. Having realistic expectations and understanding the market often saves time. As a founder, you will always feel like you deserve premium, considering the risk you took, the time and money you spent and how you lived with minimum salary. But unfortunately, this will not make any difference in what the buyer is willing to pay. I have seen people selling start-ups and businesses at a loss too, as most times, something is better than nothing. You can sell the whole product with all assets at one go but many buyers will ask you to continue working on it or provide minimum support for X months. There may be a few who want to pay X amount up front and the rest after Y months based on performance, and some just want to do partnerships. Make sure you understand the pros and cons for each option.
Make a list of all potential buyers. It is likely you want to contact companies who are in your vertical. It helped that I already had most such people already on my LinkedIn network. Make sure all P/L documents and finances are up to date. It is worth hiring someone who can take care of the legal work as you can save lot of time later in case something goes wrong and most of the time, it is not worth scrimping on the Rs 20,000 -30,000. At least, have someone read the draft if the buyer is the one taking care of legal work. Escrowing money will always be a problem if you are in India and the buyer in a different country. I am little unsure how it works for big transactions but if you are hiring a broker, they should take care of all this. For big transactions, you obviously want to meet the buyer face to face too.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Related Questions
-
What is a better title for a startup head....Founder or CEO? Are there any pros/cons to certain titles?
The previous answers given here are great, but I've copied a trick from legendary investor Monish Pabrai that I've used in previous startups that seems to work wonders -- especially if your company does direct B2B sales. Many Founders/ CEOs are hung up on having the Founder/ CEO/ President title. As others have mentioned, those titles have become somewhat devalued in today's world -- especially if you are in a sales meeting with a large organization. Many purchasing agents at large organizations are bombarded by Founders/ CEOs/ Presidents visiting them all day. This conveys the image that a) your company is relatively small (the CEO of GM never personally sells you a car) and b) you are probably the most knowledgeable person in the organization about your product, but once you land the account the client company will mostly be dealing with newly hired second level staff. Monish recommends that Founder/ CEOs hand out a business card that has the title "Head of Sales" or "VP of Sales". By working in the Head of Sales role, and by your ability to speak knowledgeably about the product, you will convey the message that a) every person in the organization is very knowledgeable about the ins and outs of the product (even the sales guys) and b) you will personally be available to answer the client's questions over the long run. I've used this effectively many times myself.VR
-
VCs: What are some pitch deck pet peeves?
Avoid buzzwords: - every founder thinks their idea is disruptive/revolutionary - every founder says their financial projections are conservative Instead: - explain your validation & customer traction - explain the assumptions underlying your projections Avoid: - focusing extensively on the product/technology rather than on the business - misunderstanding the purpose of financial projections; they exist in a pitch deck to: a) validate the founders understanding of running a business b) provide a sense of magnitude of the opportunity versus the amount of capital requested c) confirm the go-to-market strategy (nothing undermines a pitch faster than financial projections disconnected from the declared go-to-market approach) d) generally discredit you as someone who understands how to build a company; for instance we'll capture 10% of our market, 1% of China, etc. Top down financial projections get big laughs from investors after you leave the room. bonus) don't show 90% profit margins. Ever. Even if you'll actually have them. Ever. Instead: - avoid false precision by rounding all projections to nearest thousands ($000) - include # units / # subscribers / # customers above revenue line; this goes hand-in-hand with building a bottom up revenue model and implicitly reveals assumptions. Investors will determine if you are realistic, conservative, or out of your mind based largely on the customer acquisition numbers and your explanation of how they will be achieved. - highlight your assumptions & milestones on first customers, cash flow break even, and other customer acquisition and expense metrics that are relevant Avoid: - thinking about investor money as your money - approaching the pitch from your mindset (I need money); investors have to be skeptics, so understand their perspective. - bad investors; it's tempting to think that any money is good money. You can't get an investor to leave once they are in without Herculean efforts and costs (and if you're asking for money, you can't afford it). If you're not on the same page with an investor on how to run/grow the business, you'll regret every waking hour. Instead: - it's their money; tell them how you are going to utilize their money to make them more money - you're a founder, a true believer. Your mantra should be "de-risk, de-risk, de-risk". Perception of risk is the #1 reason an investor says no. Many are legitimate, but often enough it's simply a perception that could have been addressed. - beyond the pitch, make the conversation 2-way. Ask questions of the investor (you might learn awesome things or uncover problems) and talk to at least two other founders they invested in more than 6 months ago.JP
-
How do I hire a good Copywriter?
Kudos to you for seeing the value in great copy. I love that you mentioned 37signals, which is an organization that's made copywriting part of almost everyone's jobs (or so they've shared on their blog). MailChimp and Zendesk are two others that people often point to re: great copy that builds a brand and differentiates; Groupon is another awesome example of really, really tonal copy that people actually read (which is more than half the battle). MailChimp has in-house copywriters, including Kate Kiefer (https://twitter.com/katekiefer), and so does Groupon. I'm not sure who writes for Dropbox or Zendesk, though searching companies on LinkedIn can often reveal little-known in-house geniuses. The startups you mention have a certain style and tone that I have to say is different from what you'll normally get with a "direct response" copywriter, though by all means check out the link David Berman submitted to you because you never know. I recommend that, to achieve the slightly funky, funny-ish copy you're looking for, you seek out a conversion-focused copywriter with a creative and UX background. You need someone who's totally at ease adopting a new voice / tone and using it appropriately across your site and in your emails; less experienced copywriters might be heavy-handed with the tone, which often gets in the way of the user experience (e.g., button copy that's tonal can lead to confusion). Be careful, of course, not to push your writer to be exceptionally creative -- because a little touch of tone goes a loooong way for busy, scanning eyes. Here are some great freelance copywriters you could consider: http://copyhackers.com/freelance-copywriters-for-hire/ The link to Neville's Kopywriting peeps is also great. Before hiring, ask to see a portfolio or get a) links to websites they've written and b) a zip of emails they've written; if a writer is accepting clients, they'll usually showcase their work on their website. Check out their blog and tweets to see if their voice comes through in their own writing. Don't hire bloggers or content creators for a job a copywriter should do. Don't hire print copywriters for web work unless they do both. And when you find a great copywriter, trust them... and don't let them go - because 10 bucks says, they're in demand or about to be.JW
-
For every success story in Silicon Valley, how many are there that fail?
It all depends on what one decides to be a definition of a "success story." For some entrepreneurs, it might be getting acqui-hired, for some -- a $10M exit, for some -- a $200M exit, and for others -- an IPO. Based on the numbers I have anecdotally heard in conversations over the last decade or so, VCs fund about 1 in 350 ventures they see, and of all of these funded ventures, only about 1 in 10 become really successful (i.e. have a big exit or a successful IPO.) So you are looking at a 1 in 3500 chance of eventual venture success among all of the companies that try to get VC funding. (To put this number in perspective, US VCs invest in about 3000-3500 companies every year.) In addition, there might be a few others (say, maybe another 1-2 in every 10 companies that get VC investments) that get "decent" exits along the way, and hence could be categorized as somewhat successful depending on, again, how one chooses to define what qualifies as a "success story." Finally, there might also be companies that may never need or get around to seeking VC funding. One can, of course, find holes in the simplifying assumptions I have made here, but it doesn't really matter if that number instead is 1 in 1000 or 1 in 10000. The basic point being made here is just that the odds are heavily stacked against new ventures being successful. But that's also one of the distinguishing characteristics of entrepreneurs -- to go ahead and try to bring their idea to life despite the heavy odds. Sources of some of the numbers: http://www.nvca.org/ http://en.wikipedia.org/wiki/Ven... https://www.pwcmoneytree.com/MTP... http://paulgraham.com/future.html Here are others' calculations of the odds that lead to a similar conclusion: 1.Dear Entrepreneurs: Here's How Bad Your Odds Of Success Are http://www.businessinsider.com/startup-odds-of-success-2013-5 2.Why 99.997% Of Entrepreneurs May Want To Postpone Or Avoid VC -- Even If You Can Get It http://www.forbes.com/sites/dileeprao/2013/07/29/why-99-997-of-entrepreneurs-may-want-to-postpone-or-avoid-vc-even-if-you-can-get-it/MB
-
What are digital products or services you wish existed and why? How would they help you and/or your business?
As the owner of a web development firm, I am always inventing our own digital products and services. Any service that is web-based and accessible to mobile devices work as long as they solve a business need. The digital products I wish would exist are: 1. Home building services including videos by experienced builders 2. Mail and package weighing digital services 3. More security services for document transfer services. BruceBC
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.