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MenuI would like to know as a business broker, if you've seen successful exits for motivational blogs (or spiritual)?
I would like to know specifically which metrics are the most relevant, prior to sell.
Answers
A very good question, with many long, complex answers.
As a starting point, take a look at flippa offerings to get an idea of common metrics disclosures.
You can also search for flippa + metrics + read up on the entire deal flow of site sales.
In general, most sites sell for 2.5x-7x yearly profit.
This also depends on payment spread. In other words, a site might sell for 2.5x cash or 7x paid a 25% of monthly profits, till sale price is reached.
If you go the 2nd route, be sure you escrow your DNS records with an attorney + have a reversion clause.
In other words, if 3 years into the deal, the person you sold to gets hit by a bus + can no longer make payments, then business reverts to you, along with control of DNS records.
Very important to have a reversion clause which triggers any time your buyer fails to make a payment.
Many people miss considering this when they sell a business for payments over time.
Which is tough, because many times you can sell your business for much more money if you're willing to sell over time, rather than a single up front payment.
Related Questions
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Where can we list our app business for sale?
These might be useful: https://flippa.com https://exitround.com And for selling websites: https://empireflippers.com https://feinternational.com best of luckLV
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What is the ideal time to reach investors?
Hello, you have a very interesting product in an interesting and growing industry. Anything with automated HR solutions is probably a good venture right now. There is a client of ours actually, www.BetaBulls.com who has specialized in automated Human Resources software (SaaS) as a CTO for other companies. I have learned a lot from working with them and based on that experience and the few startups I have launched myself including an online job posting platform and a game, I would say that generally speaking a good time to go for outside investment is when you have a validated concept, all legal documents in place and any type of demand from either partners or clients. Think of it as a business loan - you should only get one when you don't really need it, but for strategic leveraging is better to leverage borrowed money than your own. An investor should be the same, you get an investor if you need to buy yourself more time to improve on your technology or for market reach such as production or marketing. Not to prove the concept. It sounds like you are already there, so my recommendation would be to proceed with caution not giving any major control in any one area of your company or product.HV
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How do I exit investors adding little value except money and attract new investors with confidence after the previous investors ruined the business?
First of all BE VERY CAREFUL about exiting investors while bringing new ones on. You cannot give investors money back out of proceeds raised from new investors. It's illegal (called Ponzi). This is a VERY tough scenario since you are dealing with two substantial issues - 1) building (or rebuilding) a business; and 2) retiring investors. If the business is in fact "ruined" then you need to first decide if bringing new investors into that situation is a wise decision. You could be opening yourself up to legal problems. Investors invest in projects when they can 1) make money; 2) connect with the business; 3) add value; 4) believe in management. Unfortunately, having "previous investors" (especially bad ones) is like coming into a relationship with baggage. Most savvy investors will not want to participate. Advice: try to retire the investors BEFORE talking to new investors. Rebuild the business model and wait a few months before going after new investment. Showing that type of resilience and passion for the business could play in your favor and show new investors that you are someone who can overcome adversity to achieve success. So how do you "retire" investors? Convert the investment to debt if possible. If not, offer to sell the business to one of the investors. Do not sign a non-compete and start a new business. Also, depending on your stock purchase agreement and any anti-dilution clauses you could issue new stock and dilute everyone's shares to where the old investors shares are minimal (could have legal repercussions though so be careful).MM
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What exit strategies do angel investors want/prefer for a service business?
Keep in mind that investors invest for returns. Telling a prospective investor that you want his or her money to grow your business but don't plan on ever generating a liquidation event that pays him or her a dividend is not likely going to work; angel or not. You may be better served with debt financing where returns are generated in the form of interest payments not equity value growth. BUT, if equity financing is the plan, you're going to want to develop a strategic exit plan right from the start. That means identifying prospective buyers, strategic channels etc and characterizing the value drivers for each right up front. You'll find prospective buyers come in a number of forms; competitors, bigger versions of you, strategic partners, private equity, etc. Each will value your business in different amounts for for different reasons. Understanding this is vitally important for you to navigate to securing the right money, from the right sources, with the most favorable terms. Once you've qualified and quantified each of them, then determine what (specifically) you're going to need to do to align your business with those prospective buyers generating the highest returns. This will drive your business model and go to market strategy and define your 'use of funds' decisions. This in turn result in a better, more valuable business whether you exit or not. Do it this way and you'll have no trouble raising money from multiple sources. You can learn more about the advantage of starting with a Strategic Exit plan here: http://www.zerolimitsventures.com/cadredc Good luck. SteveSL
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After moving on from my startup, someone approached me with an offer to buy. What are some strategies for successful negotiation?
The less you need to sell, the more leverage you have. The fact that they approached you says that they want it. If 15k was their first offer, you can simply say no thanks. If you can do that with a straight face and resist the temptation to make the move, they are likely to come back with a better offer. The other way to move the price up is to say 15k is an asset sale "as is." You could offer a short consulting contract to provide assistance in integrating the acquisition and probably find an extra 10-15k that way. Happy to talk in more detail in a quick call.TW
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