We are a bootstrap startup, and recently another company has approached us to acquire a company in our space. How should we price our company?

The ideal way would be to hire the engineer while the project is still under development. You and the engineer should follow up with the outsourced partner in the process. This will give hold to the engineer and later more staff can be trained in upgrading or follow on versions of the product/service.

Just because two people are connected to each other on LinkedIn, doesn't mean that these two people have a strong connection to one another. So first, ask your Mentor directly whether (s)he knows this person well enough to make an introduction. Also, I'd suggest that instead of asking that the introduction be made via LinkedIn, that the introduction be made directly via email. The way this best happens is to email your mentor with a two paragraph email explaining why it is that you want an introduction to this person and explaining why you think this person would want to meet with you. Then your mentor can forward this email directly to this person with a request for an introduction. If the person replies to your mentor, your mentor will then connect you two directly. If the investor is interested enough to accept an intro, then you'll likely get a 30 minute to 1 hour in-person meeting or call scheduled. In terms of what that investor will be looking for, I've written a lot of answers to questions around seed-stage financing that I encourage you to review. I'm happy to schedule a quick call to give you some specific feedback on where you're at and how investors might perceive your progress to date. Best of luck with this connection!

In my experience, every step you take to complicate your company's structure and ownership rights reduces the likelihood of investors providing your venture with seed funding. To attract seed funding, investors expect a single-minded laser focus on the entrepreneurs' assessment of his or her best path to validating their business and growing it into a very large business as quickly as possible. So the very idea that you are reliant or considering taking multiple paths to success is likely to act as a red flag for most experienced early-stage tech investors. Also, until there is significant traction achieved, an investor is expecting to own everything generated by the business. There are rare occasions where a particular asset, brand, domain or other component of the business can be spun-out (usually in the case where it's a distraction from the core business but there's inbound demand from a buyer), but when I say rare, I mean this happens so infrequently that it's not anything that should be reasonably expected in the course of planning. Speaking candidly, this entire strategy creates a perception (accurate or unfair) that you are undecided on a number of the key questions you need to be sure of before you have a good chance of raising seed funding. I'd be happy to talk to you about what you're doing and help provide some clarity based on what I hear. I encourage you to review my references as I have been helpful to many other Clarity members on these types of issues.

"Based on the success we are able to achieve" suggests, to me, you are looking at a price that will be tagged to an earn out provision. In other words, the price of the deal will be contingent on you achieving specific revenue targets in the future. If I'm reading this wrong, please correct me because it's an important piece of information. Early stage startup typically suggests a focus on revenue growth with minimal focus on earnings. The most valuable acquisitions will be those that have growth in the top quartile of the industry along with an EBITDA that is also in the top quartile. Companies with these will have the highest multiples. Revenue multiples are also a function of the industry and the general character of the market. Currently, the IPO markets are doing pretty well and the overall M&A market appears to be pretty solid making multiples equally solid. In terms of industry, the media publishing industry has moderate to slow growth depending on the segment. I'm assuming there is a social or online component to your startup which would suggest that it would be part of the new growth side of the market. Generally speaking, market growth averages are at about 8% for larger companies suggesting that new entrants should be able to sustain low to mid double digit growth over a longer horizon. "Growth rates", i.e. percentages, can be meaningless for very small companies. For instance, a company that grows from $25,000 to $250,000 in a year has a massive growth rate..... but the value may be very low due to lack of track record and overall profitability. As such, it can be very hard to estimate multiples. That said, if I were putting forth a hypothetical, it would be something like the following: Assuming: The company has over $1M in revenue and is growing at an average of 12 - 15% per year. Assuming: The company is profitable, but barely, say something in the 10% EBITDA range. Assuming: The company is a service company with few assets but is not subject to significant brain drain (key people leaving would result in devaluing the company). If any of the above are wrong, it can change things significantly. Revenue multiples might be in the 0.7 - 1.15x revenue on forward looking and .9 - 1.25 on a trailing level. EBITDA Multiples could be in the 8 - 10 times on a forward looking and 10 - 12 times on a trailing level. Take it with a grain of salt because there are a lot of factors you don't mention and more information is important to make a meaningful diagnosis.

Instead of calling it "comedy", aim for humor. Humor that supports a key discovery helps to anchor that insight in the investor's mind. I've coached many pitches, and find that when presenters are nervous they try to go for an improvised laugh, thinking it will cut the tension. However, in most situations, it comes off as just that: improvised and cheesy. Which confims to the audience that the presenter is nervous and unsure. Humor an advanced communication skill which requires strategy, planning and practice. The best humor is subtle and smart. The goal is not to get a laugh, but to get a knowing smile.