Hi, I've been away from board meetings of the biz for a while due to split with founder / partner. We're amicable now and keen to rejoin as entitled.

Unless you have a decent traffic or hugely demanded items larger comps might no be interested. Access to market is what leads companies to buy one another. I rencently bought a commercial cleaning company and merged it with my residential one to create an improved service with my people but leveraging the other company's subscriptions. I would not buy based on services, but buy either access to data, people or market. So your approach can be based on that rather than pitching a retailer with zero margins. Finding companies to pitch to is harder than it sounds and it literally simply comes down to you picking up the phone as much as you can. Good luck!

"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.

Q) What info would a buyer need in order to make an offer? Unsolicited offers rarely start out as offers. They start as conversations. Cold inbounds from potential acquirers are usually done to establish some facts and also willingness to entertain an offer. They need to have enough information to form a rationale (i.e. explanation as to why it makes sense to the acquiring company) and enough confidence that there is interest by the seller. Q) Would that info need to be verified or can an offer be made on the condition of verifying later (if the conversation gets serious)? A) Offers are always conditional. There is a delicate balance between knowing how much to disclose and when to disclose information, versus trying to force more commitment on the part of the potential acquirer. Q) What is a general rule of thumb (formula?) for how to valuate a SaaS business? A) Depends on the size and business of the acquirer. The smaller the acquirer (especially where its valuation is $100m or less), the more it becomes a relative valuation argument (what do we have and what do you have), but the larger the acquirer it is typically a talent acquisition model where the business dynamics are less important to what the team has demonstrated it can do and the perceived value that that team can make internally. This is even more true when the target (you) is generating less than $5m ARR on a trailing basis. Finally, you phrased this question as "how would one go about entertaining an offer to buy my company?" so let me speak to a few general rules. 1) If you're willing to sell, be polite, efficient and courteous to any potential interest. 2) Quickly qualify who you are dealing with and their ability to make a decision (are they junior and just doing research or are they VP Corp Dev?) 3) Quickly establish mutual interest in a desire to dive deep, and get them to explain their process including other decision-makers etc. 4) Ensure that you have competent legal counsel who has significant experience in M&A, ideally with the buyer you're talking to. 5) *GET A TERM SHEET*. You have nothing until you have a term sheet and even then, you don't have a deal. 6) As soon as you have a term sheet, begin aggressively marketing your Company to other potential acquirers. 7) Try and put the impact of the financial outcome aside for a moment (very hard to do) and begin evaluating your suitors based on who you really want to work for over the next 3+ years. Do your due diligence on this question as much as possible. 8) Don't take your eye off the business or celebrate the deal until it's done. I've seen too many friends celebrate prematurely only to see the deal die or radically change at the last minute. Happy to talk through this in a call with you in more detail.

If it's generating USD $10,000 or more in MRR, then you can try listing if on ExitRound but based on your description, I think a sale at this moment is unlikely. Acquisitions like the one you're dreaming are either motivated by the book of business or an engineering team. Code is thrown away and product discontinued. So the idea that a business is going to buy you to fix the problems of the product is unrealistic. Happy to talk to you to help you determine if the business is potentially salvageable.

So you're saying that your business is a service business like auto repair, home buying, or any of millions of businesses that have existed for many many years. This is not a problem. Businesses like yours are bought and sold every day. The secret is a track record of profitable cash flow and a demonstrable system of how you get clients. If you want to run down a quick valuation just arrange a call and I'll show you in 15-30 minutes what kind of ballpark value your business may hold. Cheers David Barnett