Forum Moderators: LifeinAsia
1. Patents and Trademarks. We have filed for a few trademarks and applied for 6 patents to cover our processes. I believe (could be wrong) that this adds core value to a business.
2. Employees. We have begun to staff up. I once heard (on this forum) that a business with no employees is not a business, it's a job!
3. Contracts. We have started requiring more than a handshake from our partners. All of our partners are now under contract to perform whatever services they provide.
4. Documenting the Business. We've really done this from the beginning but have been concentrating on it a little more now. this includes everything from accounting to illustrating all of the processes involved in the business.
5. Short List of Potential Buyers. I have been compiling a list of buyers over the last year. That list has gotten shorter as we have gotten bigger.
I would love to hear everyone’s input on things I have overlooked. One thing in particular I would like feedback on is how to make the next step. Do/should we actively start trying to contact potential buyers or should we wait and hope for them to contact us? In the past I have sold businesses with the help of a business broker. I have not ruled that out this time but I thought I would try a different approach.
Thanks for reading!
A start-up business is only valuable if you have something someone else wants. That may be human beings, patents, premises ... whatever ... but is unlikely to be the business itself, which has scarcely had enough time to make a dime, let alone a real profit.
Why not keep building the business? It may be your business-building skills that make up the value; without that, there may be nothing to sell.
Or do you suspect it has already reached its peak, and it's downhill all the way? At this point in the economical cycle (near bottom but still falling), any potential buyer will be looking very carefully for signs of downturn.
Why not keep building the business?
You may need to ensure your achievements are widely noticed, but touting the business would undermine its credibility - and severely drop the price!
Think about Kwill (or whatever they called themselves); touting yet another SE for sale would not get them through the gate, let alone the front door. A big, successful launch would get people waiting in line to make an an offer. OK, they blew it - but the principle's a good one :)
touting the business would undermine its credibility - and severely drop the price!
I agree whole heartedly! HOWEVER, at this point a big launch would probably kill us. We would lose the trust of our users because we would not be ready, not unlike Kwill.
I wake up at night in a cold sweat with the fear that (insert major national news network here) is going to call today and want an interview. Now that may sound like wishful thinking, maybe even a little pretentious, but it's coming. I know this because every launch at local levels has been a major media magnet and as we move into bigger markets the likelihood that a national outlet will want to report on it increases.
I had read a story not too long ago about a software company that landed a large government contract that they could not handle. They immediately sold to a larger competitor who was happy to get them because of the contract. In this case however once the national media gains interest we only get one shot. We can't tell them we're not ready please call back next month!
Perhaps if you mention a bit about the problems you face with increased user count some of the members here will suggest useful strategies to resolve them.
Other than that everything else is pretty much in place, aside from some tweaking here and there.
Be as patient as you can; that way you command the best price. Any new comapny that's growing, but appears desperate to sell raises doubts and lowers prices.
If you are confident in what you have built, then hold on.
Enough about me! Question: Of all of Google's acquisitions, what percentage do you think contacted Google about selling and vice-versa?
I'd also guess that Google's intelligence service is on a par with the CI&A; they know what they want, they know what they need, and they know what's out there.
Unles you have reason to believe that your business is invisible to them, then you can take bets that they know you.
On the other hand, you don't know what they know - or, with any certainty - what they want. You'd be *very* unwise to focus on one just one potential buyer, especially when you don't *know* if they are at all interested. they may have already found an alternative that meets their needs, either within their own resources, or in another business.
Also, I suspect the 'Google way' is more to do your best than to be reshaping yourself to 'sweeten' Google. But their business lawyers may not share Google's public face ;)
I suspect the 'Google way' is more to do your best than to be reshaping yourself to 'sweeten' Google.
Excellent point! I believe we have our priorities straight. Building the business and providing our service are our first priorities. However I think we also have to be responsible enough to set ourselves up for all possible outcomes, one of which is a sale. A sale however is not the driving force behind our business.
No one is forcing you to grow the business past the point of where you're comfortable. Have fun with it. Build cool features, shape it into what you want. It sounds like you're not in the red which is great, just make sure you don't concentrate too much on an exit strategy as those things have a way of negatively impacting the business.
My personal belief is that the best candidate would be the big G (hence the title of this post). And not necessarily for the usual reasons. This project would give G. an entry into an sector where Y. is kicking G's behind. Another reason is our current Achilles heel, data acquisition, G's specialty.
I would think this should make you equally, if not more so, attractive to Y. If you are making headlines in a one of the relatively few areas Y dominates G, they should have some vested interest in keeping the status quo. The recent actions of MS to acquire Y should make MS a potential buyer, too -- in my mind MS enjoys acquisition as much as development.
I suppose a summation would be to say: There are plenty of companies, people, and groups with deep pockets...why think only of one?
If I were you, I would hire a lawyer, go to an investment bank/brokerage firm specializing in small to midmarket ventures, and discuss exit strategies. Why worry about the sale of the business...when there is a whole industry to do just that? Then you can continue to run your website and build value while others discretely discuss sales terms and raise capital. That way, you can avoid the appearance of desperation, as our compatriots have wisely suggested, while actively seeking to divest from your company. Depending on the firm, they'll be able to bolster your appearance on paper and help you achieve maximum sales value -- think real-estate agent-esque services -- yet you maintain full control of the sale.
