

Ask HN: Tips for negotiating site sale - trickjarrett

Tomorrow I am meeting with a potential buyer for my 2 year project. I've provided him with the traffic statistics since the first of the year, and he has been the long time sponsor of the site, so we have a previous standing relationship.<p>I've never negotiated a sale of my own project before. I've negotiated for higher salaries and benefits etc.<p>So what tips or advice can you all provide? Any tips on negotiating? Any advice on preparation I might have overlooked?
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EinhornIsFinkle
Here is a simple one but sometimes overlooked by 1st timers:

Don't negotiate from a cost-plus perspective. Forget about how much time, $,
resources you put into the project.

Think about the sale from a value-add perspective. How much additional value
will this add to your potential buyer? try to understand his/her motivation to
buy, what's the plan, etc. They see a way the site can generate additional
revenue; it's your job to find out how much.

Also, don't throw out a number unless you have a reason to. Some will disagree
with me but that's just my style.

Thirdly, look for comparable sites that have sold recently to get a very rough
ballpark # and try to get additional bids.

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trickjarrett
Thanks, that's an excellent point I had not fully considered. On the drive
into work I was thinking about the benefits the site gains him, and pondering
how to translate that into the cost of the site.

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joez
It really determines what kind of relationship you wish to nurture. Are you
going to continue to work under the sponsor after the sale?

The classic rule of negotiating is never be the first one to write come out
with a number. If you come out with a reasonable first number, you could
severely limit your gains. If you try to next level think it, you could get
laughed out of the room. Sometimes negotiators write down offers at the same
time down on a sheet a paper to resolve a situation in which no one will write
down a first offer.

Use next level thinking once you start haggling. If the lowest you are willing
to sell it for is 6M, and your initial offer was 10M then cutting reducing
your second offer to 8M is too much. Choose something more arbitrary like 9.4M
which makes the buyer think they are getting to close to your lowest point.

This also means you should know your lowest point. Another great rule of
negotiations is to have a strong alternative. This means explore other avenues
for a sale or have projections for where you can take your project in a few
years and exit then. If you don't care about the relationship, a tactic to use
is to simply lie that you have a competitor's offer. Well since you are
meeting tomorrow, make a few phone calls in the morning and see if you can set
up a meeting with another potential buyer. If you can convey that you are
taking other meetings during the negotiation, it'll strengthen your position.

In the end, feel out the other person and trust your gut. Good luck!

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trickjarrett
Currently we may work irregularly together, but I doubt we will take any
extended projects together again. But who knows.

Thanks!

