

Ask HN: Value of our 4 year old startup? - cofounder342

We've received an offer to directly buy 51% of our shares, resulting in an early stage partial exit (not funding for company). I have a feeling that it's a fairly low offer, and I am hoping to get some insight from people who are familiar with these sorts of deals.<p>EDIT: Sorry for following formatting, it was submitted as a hierarchical bullet list<p>The facts as I see them:
- We founded our company 4 years ago (5 founders)
  - Still 100% owned by founders
- Pivoted twice, each time reusing most of our previous work
  - Saw some revenue after our first pivot, but found a better idea 
- Currently based in Australia (would move to US though)
- First sale of current product this year
  - 3 year contract with a total of over US$650K (in british pounds)
  - To small/medium sized company in a very large worldwide industry
  - we see this as a small deal, and discounted at that for our first client
  - 50% of the revenue goes to a partner company that made the sale
    - Many more sales in the pipeline, and bigger ones
    - They've recently loaned us some money to support feature development
      - In exchange for 3 year worldwide exclusivity on sales
      - (Early stage venture funding very hard to get in Australia, and 4 years is a long time!)
      - Loan payback conditional on them making sales
- We have Windows, OS X, iOS and Android clients for our product<p>Our product is first to market and <i>significantly</i> more advanced than those of our competitors - we have the benefit of having worked on a related system for years before pivoting to this, whereas our competitors are coming from different backgrounds. Every company we've demonstrated to has been hugely excited about it - we save them time and money in a few ways. The standard software contracts in this industry are 3-5 years and for large sums of money.<p>If you can accept all this at face value - what sort of back of the napkin calculations would you come up with for a valuation? I will answer any requests for more detail if I can do so without revealing who we are or too much about what we do. We're in stealth mode.<p>Giving up control of our company isn't ideal, but the offer IS directly for the shares, rather than for being able to grow the team. You accumulate a few bills when you self-fund a startup for 4 years.<p>Coincidently (really), I'm visiting friends in L.A. for the next two weeks. If any serious investor out there is interested in a demo and potentially working towards making an investment in our company I could meet. I would love to add a couple of engineers to the team and investors with the right connections could help us go after the relevant deals in the enormous US market for our product.<p>Perhaps it's naive to ask this way in a forum such as this but I am our startup's core hacker - not the guy usually dealing with the business end. This post is not an indication of a rift in the founding team - I am simply a substantial shareholder in this and I have decided to collect data from a community that I respect. Either way, I am primarily concerned with finding out if the partial exit offer is reasonable or not.
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cofounder342
Ah, the formatted hierarchy of the 'facts' paragraph was lost during
submission, sorry for that. Also i'm not sure why this hasn't appeared in the
'Ask' section, perhaps I submitted this in the wrong way.

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se63pj
how much has been offered?

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cofounder342
I don't want to skew the responses by sharing that - i'm hoping for back of
the napkin calculations by those with experience in the area.

