

"If one wanted to buy you in three months, what's the lowest offer you'd take?" (huh?) - tphyahoo

I'd like to ask PG: Is this assuming things are going fantastically well, or not so well but not so badly that we don't at least have a potential buyer?<p>Clearly the second option would result in the lower number, in which case we're basically valuing our time and sacrifice against a scheme that did ok but not great, and telling YC what we think their salvage value might be. <p>Giving a high-end 3 months upside potential is the other possibility.<p>Or should I just give a number for both?<p>Maybe I don't understand the point of this question?
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dfranke
<http://news.ycombinator.com/item?id=5700>

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buss
My partner and I are really struggling with this question. We first answered
with the absolutely lowest amount we'd take (250k), but after thinking about
it, we've decided to revise. Our answer is now along the lines that we can't
possibly know how much we'd sell for. We would have to reevaluate the company
if someone makes us an offer, so any number we give now is pretty much
meaningless. I think the amount depends on so many variables that we just
can't predict.

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pg
The first answer was better. No one knows. We're asking for your best
estimate.

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kingnothing
Since you can use 120 words per response, why don't you just give more of an
answer than a six to eight digit number?

It's probably in your favor that you're even considering different situations
under which you would sell the company.

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SwellJoe
I talked around this question. Not on purpose...I was just in a hurry and
ended up misinterpreting it as something along the lines of, "what do you need
your startup to be doing in three months", or something (I dunno what I was
thinking...but my answer kinda makes sense in that context). We got to the
interview, anyway.

So, I don't think any one question is going to kill your chances. Show that
you know how to think about the value of your business idea, that you have the
capacity to build your idea, and that you are willing to build it. Everything
else is gravy. I suspect clear and concise sentences go very far, as well.

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Xichekolas
I always considered absolute minimum to be about N x 4 x 10^5 dollars (where N
is number of founders). This is just because $400k is enough to support my
current lifestyle on interest alone, and would allow me that much-dreamt-of
freedom from the tyranny of bosses if I choose.

The site I'm working on is more niche than broad, so my sale goal is N x 2 x
10^6.

However, I think that I am strange in really hoping my site actually generates
cashflow once it's up and going, and I don't have to constantly look for
funding or an acquirer.

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rms
Welcome to the real world!

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Tichy
In my first draft, I just put the opportunity costs we would have for the
three months. That's nothing like millions... Obviously if the startup seems
set for success, it would affect the price. But by lowest offer I assumed the
worst case. If it doesn't take off (and no remedy is in sight), there would be
a line where instead of taking money for it, I would perhaps still prefer to
be allowed to call it mine.

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brianmckenzie
Just a guess, but the point of the question may be to gauge your long-term
aspirations and risk tolerance.

If he'd applied to YC, Mark Zuckerberg would probably have answered
differently than the Reddit guys, for example.

A former YC founder told me to just put down a number in the 5-10 million
range.

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aston
I bet this is the best objective measure of someone's "take-over-the-world"
factor. If you have the balls to submit an app with $15 billion, you're pretty
likely to have the balls to try to get there. The IRL interview'll sort out
whether you're crazy smart or crazy dumb.

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german
This is just a rough approach, but lets say that you want to sell your company
for 100K, assuming YC owns 10% they will earn 10K (but YC invested around 15K
+ on your startup), What do you think they should do?

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majimojo
Probably an equity question too. If you demo in March and look for funding,
your answer is your valuation. Write $4mil, VC gives you 2mil, they get 50%.

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dhouston
maybe i'm misunderstanding you, but the question is hypothetical and your
response isn't shared anywhere outside the app. (i.e. you're not binding
yourself to anything by claiming a particularly high or low valuation)

on another note, your company's valuation is determined by what people are
willing to pay :)

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nostrademons
I look at it as the reserve price of an auction. Ultimately, a startup is
worth what people are willing to pay for it, but under a certain price, I'd
rather hold onto the startup and try to grow it than sell it.

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pg
Assuming things go about as well as you expect.

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rms
My answer was:

>In the millions. However, if we got an offer in the millions after three
months it would make great economic sense to wait another nine months for a
better offer.

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mrtron
_I_ am not for sale! (for less than 10 million)

