
Selling Kiko: How Justin Kan sold his first YC startup on eBay - randall
http://areallybadidea.com/selling-kiko
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paulitex
Great story, but I wonder if this is a situation where you 'only hear about
the winners'? I'd love to know if anyone has tried something similar on eBay?
I suppose the question is this: is eBay really a good market for fledging
startups looking to liquidize or was this story one of those million-dollar
homepage things?

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d_r
From the post: _We posted the auction on Reddit and, with the help of a few
friends, got to the front page. ... Pretty quickly the story was picked up by
Techcrunch ..._

This part has got to be important. Getting significant visibility for the
auction likely helped quite a bit, and eBay is just a medium that made the
auction possible.

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jayzee
Very well written and a lot of informative content!

But I had a question about general solicitation in connection with a private
placement? Wouldn't selling your startup (shares) on ebay be in violation of
SEC regulations?

~~~
justin
We actually sold all the assets (which was specified in the auction), not the
actual company itself. The assets included the domain, code license and
database.

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PHPAdam
If you dont mind me asking, what was eBay's cut of a seemingly large
transaction?

It sounds they deserve every penny, for the support and consideration they
gave you. (/sarcasm)

~~~
justin
I think it was around $3500 all told.

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savrajsingh
Awesome! Do you know if the kiko codebase is still in use?

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emmett
I don't know - they took down the kiko.com site a couple years ago and we
haven't heard about it since.

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bradya
Congrats! This is inspiring and motivated my business partner and I to
consider selling our mobile app business. We just hit 1 million users across
our portfolio of relatively unknown apps.

If we are able to sell our company, we would be able to use the cash to pay
for living expenses so we can start another company.

~~~
jonpaul
Awesome. We're in similar shoes. We should connect.

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nbashaw
Great story! Someone should make an eBay for startups. Does anyone know if one
already exists?

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John212
Yup, flippa.com. It is more for sites than startups.

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daniel-cussen
Were Kiko's buyers ultimately happy with the acquisition?

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justin
I don't really know. They never asked for a refund :)

~~~
nickconfer
have you sold anything on eBay since, or was the rush gone after that :P

Thanks for sharing your story.

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aresant
Practical question - if you guys sold assets only did that qualify you for
capital gains on the sale or ordinary income tax?

~~~
emmett
Technically, we didn't sell the assets. The company sold the assets (income),
then distributed the resulting cash to shareholders (capital gains). So the
money got taxed twice, once for corporate income tax and once as capital
gains.

~~~
zone411
So you were structured as C-Corp?

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flavio87
do you know what the main reason was for them buying the assets? Traffic,
Codebase, Domain, YC fame? did you post all your traffic stats on the auction
at the time?

~~~
justin
I asked them how they valued the auction. Response:

\- 50k for the domain name

\- 175k (or so) for two man-years of engineer time and the code

\- 25k for user base

This is all a bit fuzzy and from memory, so I could be somewhat off.

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rorrr
Would you guys be really happy to make $258K from a startup sale? I don't
think I would be that excited. Once you subtract all the fees, taxes,
investors share, you're left with maybe $150K. Then you split it among team
members, and you end up with something you can make doing a regular job in
like a year.

Yes, it's fun and independent, but I think if you're taking a risk of creating
a startup, it should be at least rewarded with a nice sum of money when you
sell it.

~~~
justin
Looking back, of course it isn't a lot of money, especially when you consider
how well justin.tv is doing and that we have raised millions in VC since then.
However, consider that we were thinking we would get nothing initially and
would have been happy to get 50k. And that the whole thing jumped 200k in the
course of a few hours. I think you'd be excited too ;)

