

ASK HN: I'm very tired.... how do I sell my company? - tgoing

After running my statup for more than a year (as CEO), I became very tired.<p>Our product is often recognized as a feature, not a whole solution.
We <i>could</i> make this "feature" shine, but for that we needed to spread our solution to millions and millions of website.<p>Besides that, I saw my co-founders getting tired as well. I could cheer them up and show the vision, goals and etc (like a good CEO, right?), like I did in the past, but how can I make that again if <i>I</i> am feeling tired (depressed, maybe?).<p>It really sucks, I enjoy entrepreneurship but it's been more than a year bootstrapping without many customers and real money.<p>I'm thinking now to sum-up what we have in a document and try to sell to other startup who operates in the same field, is well funded and has open positions.<p>So, the questions:<p>1) How to evaluate the system that we developed (lines of code + time on it?).<p>2) Should I also sell the 10 .com domains that I bought?<p>and<p>3) A word document. Is this the best approach? What should it contain more in the document??
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pierrefar
I was in a very similar situation a few months ago. I ran a URL shortener and
got tired of the upkeep, but more importantly, I realized that it's a not
product but a feature. I sold it, eventually. Here is how.

I blogged saying the site is going to shut down, and I started making plans
about what would happen in terms of data export and keeping the URLs working.
The community responded VERY loudly: we like it, don't shut it down, at least
give it back to us or sell it. This told me something very important that I
didn't realize: no matter how fed up you are, no matter if you hate it or like
it, there are people out there that value your work. You just don't it yet.

So I wrote up a brief post about the vital stats with vague ballpark figures,
and gave an email address for serious bidders to get in touch. A lot did. Some
were not serious at all (easy to tell) and some were very professional and
clearly serious about wanting the site. In the end more than one bid was on
the table from people that not only wanted the site, but really cared about
the users.

How it was valued: an auction. Best bid wins. I kept it anonymous (under the
trust that I don't inflate the price, and I never did). If I were to do this
again, I would put it up on flippa or sitepoint or ebay or elsewhere.

The biggest problem you'll have is people knowing about the sale. Like
anything, market it. Your users are the most likely group to produce the
buyer.

The second biggest problem is spurious bids.

And sell everything related to the site. You need to sit down and make a very
thorough inventory, and be very careful not to include things you cannot sell
(check the licenses) and be sure to include everything you can sell. Included
in my sale was a handful of domains, full source code and the whole database.

People will want proof of whatever numbers you give them. Screenshots are OK
to a certain extent. Eventually they'll need full access to verify things,
like to Google Analytics or your site's admin area. A good way to do this is
show them screenshots and agree the sale. Get paid 1/2 or 1/3 upfront, give
them access, they verify everything and then you get the rest of the money.
Even better, use an escrow service.

Drop me a line if you want more help. Details in my profile.

~~~
rjett
I figure someone will eventually ask this so I guess I'll go ahead and do so:
How much did you get for cli.gs and did it make your time invested in the
project "worth it?"

~~~
pierrefar
Number has never been disclosed and I agreed with the seller that we won't
disclosed it. I'd like to keep to my agreement :)

Was it worth it? Absoultely beyond the shadow of a doubt. Two things made it
worth it: financially it was good, and more importantly, the friends I made
and lessons learned are priceless.

------
petervandijck
1) lines of code and time don't matter at all.

2) yes, if they're any good.

You need to figure out who might get value out of what you built. Those are
the people that might by it.

Once you've done that, you need to build competition for the buy.

Why not tell us what the product is, so we can give better advice? It doesn't
sound like you're going anywhere with it in any case.

~~~
tgoing
Short-answers like this make me very nervous....

For me it means that you (or anyone who give those short-answers) do not care
so much about the matter.... am I correct?

But I'm thinking about tell what is the product.... I can tell that we're
making a script to add to any website and we have a handful number of
customers.

We've been thinking of getting revenues by advertisement, but in order to get
significant revenues we need to spread to many websites.

~~~
pgbovine
_For me it means that you (or anyone who give those short-answers) do not care
so much about the matter.... am I correct?_

sorry to sound rude, but you were the one who asked for advice here ... if i
were you, i'd be grateful that people chime in with any thoughts at all,
regardless of length. you can't expect people to write an entire inspired
essay based on your (very short) question

~~~
mccon104
_if i were you, i'd be grateful that people chime in with any thoughts at all_

that's a bit much don't you think? HN is a community based around learning
about/discussing this exact sort of thing. he asked an earnest question and
felt he received a half-assed response. so he called it out.

it happens here all. the. time. it's why i love reading this site, trite
reponses get torn apart.

------
peteforde
I have the kind of personality where folks (including almost strangers) seem
to feel comfortable "getting it all out" with me, and I do my best to listen
and tell them what I really think.

What usually happens is that people get happy and excited, because I seem to
get it and I'm not interested in knocking them down. How did I become so wise
that I can give great advice?

It's simple, really: I just take all of the key/values they give me, eval() it
in my brain, then pretty print it out to them as a JSON hash of logic. Then I
tell them what I think they should actually do.

This works wonders because obvious I am not an oracle, I can only spit what
they tell me back in a different order. And then I'm confident and
opinionated.

Sorry dude, your start-up has already died and you haven't realized it yet.
It's not worth anything to you or anyone else; time spent trying to get $50k
(absurd!) is you being in denial about the time and effort you've put in so
far. It's a distraction from making a clean break to try your next big idea.

Hard to hear? Yes! Harsh? Possibly, but it's because I want you to feel that
this is real.

~~~
peteforde
Just as a follow-up:

I forgot to say that this is great news! You are free, if you let forgive
yourself and let go.

------
garciahouse
Cut your losses and move on. Your fatique (after only 1 year) is a symptom of
your heart knowing this is a waste of time and that your efforts are better
spent on another project.

Move on.

Startups rarely succeed in a year. I've done 3 so far (the first 2 went for 5
years before they sold. I'm currently 5 years into my existing company - and
we've got another 3-5 years ahead of us.

Expect "no money" for 2-3 years (minimum).

1) Code means virtually nothing in an acquisition. 2) Yes, sell all of the
"assets" as a package. 3) Word Doc Summary that tells the story to the
acquiring company. A PPT deck won't be as compelling.

Firesales are about details - not "top line story pitches."

------
brmore
Maybe obvious (?), but if you recognize (or at least accept) that your product
might be a "feature", you probably have thought about who/what might benefit
from that "feature". Have you contemplated calling the folks in that market to
see if they might be interested?

Also concur with petervandijck earler. Might be interesting to just post your
company name here. You might find a taker.

As to valuation, I wish there was a magic formula. I know from my own
experience that the seemingly harsh valuation of a suitor will NEVER equal the
company's value in your heart. Don't allow yourself to be insulted by an
offer, at least publicly; you will almost certainly be angry, insulted, and
frustrated at the value others will assign to your baby.

~~~
brmore
Following up on my own post. Totally ignore and disregard all of the above if
you have even a moments pause about selling. As others have mentioned, pivot
or competing in larger market are both valid courses of action to be
considered if you have an ounce of fight left.

------
jnchapel
Your post struck a chord. About a month ago, after almost two years of running
a small start-up, I made the decision to sell or close. The product had
reached a plateau, and I realized that I didn't have the resources -- and more
importantly, I no longer had the interest -- in pushing the product further
along. It still has a ton of potential -- just for another organization.

The first thing I did after making my decision was inventory every salable
asset -- the product, domain names (absolutely, sell those!), databases,
intellectual property. The second was to write up a five-page prospectus that
covered the basics -- what was for sale, the product's history, the product's
numbers (how it was doing with users, etc.), revenue, and potential revenue.
Armed with that, I approached companies I believed might be interested in
acquiring (and let others in my industry know that I was planning to sell, if
possible, or close, if not). If a company indicated it was interested, I sent
the prospectus and answered follow-up questions. I am now in discussions with
one serious potential buyer.

Re: Question #1, you have to forget how much time you've put into the product.
Unfortunately, no sale price is going to recoup your hours. Depending on your
product, its potential, and your industry, a sale price will likely be based
on the value of your assets and/or multiples of income.

------
trevelyan
I think it depends on what "without many customers and real money" means. If
you don't have ANY revenue you don't have a business that can realistically
grow over time. But if you have some customers and some revenue you're not
doing badly and your competitors aren't really an issue. A year is not much
time to build a presence on the Internet. It takes time to get organic traffic
and word-of-mouth growth.

If you think the market is there keep at it. If you've learned the market
isn't really there, sit down with your cofounders and hash this out with them.
They will see through any attempt to keep them enthusiastic if you aren't
enthusiastic. I think this is a key example of how PG is wrong on the
cofounder issue (at least for bootstrapped startups). It's a lot easier to
grow a small business to the point where it supports the expectations of one
person than to the point where it supports the expectations of several.

If you want to sell, try making a phone call to the other CEO and arrange
lunch if you can get it. Casual contact humanizes you and gives you a chance
to learn more about their plans than you would otherwise.

------
aaronblohowiak
sounds like you should pivot.
[http://www.startuplessonslearned.com/2009/06/pivot-dont-
jump...](http://www.startuplessonslearned.com/2009/06/pivot-dont-jump-to-new-
vision.html)

------
gyardley
Selling a company is a full-time job that's a lot like raising money, except
unlike raising money there's not a ton of blogs out there giving free advice
on how to do it. If you try to do it yourself, you will suck at it.

If your company could actually be worth something, where 'something' has seven
digits in it, find someone with experience who's successfully shopped
companies before. They will want a retainer plus a percentage of the total.
Assuming they know what they are doing, they will be well worth it.

If your company has no chance of being worth a large sum to anyone, put
together a list of parties who might potentially be interested, e-mail their
CEOs or 'corporate development' executives (if they're large enough to have
such things), and just be open with them. They will take you to the cleaners,
but if your company isn't worth enough to hire a professional this is hard to
avoid.

Ultimately your startup is worth what the market will pay. Lines of code don't
mean much and time spent on it means nothing. Let another party make the first
offer if you manage to get any nibbles.

------
toto
__Honestly there is not enough information to provide you good advice. __

There is no ONE approach to sell whatever website / company / solution. The
strategy will depend on the nature of the assets you want to "sell" (your
expertise, employees, code, customers, etc.), your potential customers (an
entrepreneur, a medium company, a Fortune 500 company, ...), your balance
sheet, etc.

So my advice would be to analyze your situation and try to identify someone
who already sold his company with a similare situation and contact him. For
sure (s)he will be happy to share his/her experience. Also, you could find
some VC or investor and just invite him/her for a lunch and have a productive
talk (it worked amazingly well for me).

------
rickdangerous1
Theres quitting for the right reasons and quitting for the wrong reasons. If
you quit your project make sure you do it for the right reasons, otherwise
you'll regret it later when your perspective is brighter. This may be a
situation where the business idea is a lost cause and its time to quit (the
smart thing to do), or this might be a situation where if you pivoted and
tried something smarter, you could have a breakthrough. (Notice I didn't say
work harder - thats a fools game).

------
marknutter
What's the startup?

~~~
tgoing
Still thinking if I should tell. Read my comment above. :)

~~~
fizx
I recommend not telling.

~~~
jacquesm
I'd tell, after all HN constitutes a possible audience of buyers.

~~~
tansey
And he would have just told those potential buyers that he is tired of running
his company and desperately wants to get rid of it, thus giving them lots of
leverage in negotiations.

~~~
nash
Why do you want to sell it is one of the first questions a buyer should ask,
or at least find out an answer for.

After all there are lots of reasons to get out: \- Patent lawsuit incoming \-
google/apple just entered the market \- Future law change

'My heart's not in it' is a reason to think it is safe to buy.

Of course due diligence for the above is also needed.

------
cmelbye
eBay? Sam Odio's bluwiki was able to sell for a lot using eBay. That was for
charity though, which might have affected it.

~~~
zackattack
According to
[http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=16042...](http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=160421557085#ht_1800wt_1139)
\- it sold for $2,550

------
dave1619
You might want to put it on flippa.com

