

Ask HN: How do I sell my startup? - buymycompany

I have been running a startup for about a year now, and we're profitable and fairly low maintenance. I don't necessarily feel burnt out about the idea, but it would be nice to cash out for a few hundred thousand and put that money away and spend some stress free time hacking at whatever I feel like hacking on (I am like most here and have dozens of ideas fleshed out in my notes).<p>Our revenue is about $7500/month, with profits at about $6000/month. I have plans to rebuild a lot of the product and grow the userbase this summer, simply because I think it's possible and more revenue would be nice. I think by September, we should be able to double our current revenue numbers via an optimized funnel and some new marketing channels.<p>Ideally, I'd like to sell for something between $250-500,000. I don't really have anyone inquiring about buying us but that's possibly because we haven't hit "the big time" in terms of brand recognition in our niche.<p>All that being said, how do you just up and sell a company that probably exceeds a site like flippa or ebay? I feel like I've never seen a "For Sale" sign on a site so I assume that's not kosher, but do I approach a broker or approach people I think would be likely to acquire us if they knew more about us?<p>TL;DR: How do you proactively sell a profitable startup?
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itsprofitbaron
First of all, before pricing your startup it’s important to know what type of
service it is as the multiples you can achieve for various monetization styles
varies greatly e.g. Membership Fees, Advertising Revenue (with subsets of
Affiliate/Adsense/Display – these also vary greatly as well!) etc.

Secondly, having used Flippa since it was part of Sitepoint Marketplace I know
that Flippa actually sells a lot of sites around your $7500/month revenue
(with $6k/month profit) margins.

In fact, sites have sold for over $1MM on Flippa e.g.
<https://flippa.com/2677949-planetrx-com> which sold for $1.2MM. Likewise,
[https://flippa.com/102961-bloggersunite-featured-blogger-
net...](https://flippa.com/102961-bloggersunite-featured-blogger-
network-51k-page-views-featured-on-cnn) sold for $450,000

There are many other sales on Flippa in the several hundred thousand range.

Generally sites are sold for a multiple of around 12-18x monthly revenue
(although this can increase to as much as 36X depending on your site & how
stable these revenues have been over a period of time).

For some relevant comparison:

Inquisitr sold for $330,000 with $15,000/month revenue -
[https://flippa.com/138899-the-inqusitr-rare-opp-to-
buy-15k-m...](https://flippa.com/138899-the-inqusitr-rare-opp-to-
buy-15k-month-news-site-with-1-5-million-uniques)

A file host just sold for $300,000 11 hours ago on Flippa (at the time of this
comment) - [https://flippa.com/2747329-one-of-the-largest-and-most-
valua...](https://flippa.com/2747329-one-of-the-largest-and-most-valuable-
file-hosting-site-on-flippa-w-huge-profits) with profits of $XXXXX.XX per
month

~~~
ig1
Sites that sell on Flippa typically sell at a discount, a privately negotiated
sale within your industry will almost certainly sell for more. If you end up
going to a broker or a site like Flippa it sends a strong negative signal that
you can't sell it directly which has a significant downwards impact on the
price (also the people likely to buy in those scenarios will lack the value-
add that an industry player would have).

~~~
itsprofitbaron
Agreed, generally I believe that in this type of scenario that its far better
to reach out to potential competitors or to companies (where appropriate) who
can incorporate the product horizontally or vertically into their
service/operations.

The comment was just providing some perspective over Flippa, that its not
necessarily a place to sell sites for a few hundred bucks which I should
probably have made clearer.

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ig1
I think the general pattern is to go for drinks with potential buyers
(typically bizdev people at your competitors) and drop hints. If they're
interested they'll bite.

Avoid giving away too much information at the early stage though to any
interested party, whoever you end up selling to won't want the sites core
stats to be known to all the competitors.

------
reiz
I sold one time a company. It worked out for me because I had some
relationships. It is always good to know your competitors. Competitors are
always potential buyers.

And there are always companies who would like to extend their portfolio. This
companies have always 2 options. Make it or buy it. Buy it is always faster
and you know what you get. I sold to a company which wanted to extend their
portfolio.

I hope my answer was helpful.

