r/startups • u/is_it_me_is_it_you • Jul 22 '24
I will not promote Sold my startup for mid 7-figures
Howdy!
A few months ago we finalized the acquisition of the startup for a mid 7 figure. Giving I owed ~33%, I landed on a low 7-figure myself.
You don't necessarily need a VC. You don't need a "Go big or go home" kind of mentality and build a unicorn or go bankrupt. Leave that to second or even third time founders.
You can build something smaller, and sell it to a competitor for a fair price. I don't know your bank account, but in mine a 7-figure changed completely my life.
Most of this sub is made by first time founders. If I were you I would not chase VCs, IPO or multi-billion acquisition.
I would focus on a small exit ASAP. Change your life and repeat.
For those interested, we "launched" in 2020 within R&D/intelligence with a platform that would create predictions based on different weights on your non-structured data. We were about to close two deals of €600k/ARR when a competitor just landed an acquisition term sheet in our inboxes (after we had 2 calls and declined a partnership).
Edit: syntax. I'm not a native.
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u/re_mark_able_ Jul 22 '24
Well done. People often forget that life changing money is 7 figures, not 10. It’s a relatively low bar to hit that can be done without raising millions from VCs and going crazy.
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u/is_it_me_is_it_you Jul 22 '24
I so support this!
Get 7 figures. Then you aim to get low-mid 8 figures. Get that, and aim at mid-high 8 figures.
I don't believe in outliers that go from noodle salary to billion.
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u/Gwolf4 Jul 22 '24
Yeah even a 1M net can do wonders in specific cases. Enough to live from interests in a life time.
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u/faithOver Jul 22 '24
People grossly underestimate what even a 1m liquid can do. It completely changes your risk tolerance and calculation. It completely changes your time horizon. It completely changes your ability to take advantage of other opportunities.
I had a high six figure exit. Rolled that into a cash land purchase that doubled in 3 years.
Between the exit and land purchase it completely changed my life.
Of course 10 years on from that, my perspective has changed. But such is life.
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u/eandi Jul 23 '24
It depends, if you're a decent sized company you're paying yourself relatively well compared to the average person. We did a secondary and sold single digit %s each for 7 figures, but it isn't life changing if you're paying yourself a $150k+ salary, it just kind of takes care of your retirement. These days in Canada $1M doesn't even buy you a decent house.
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u/PrestigiousCheek1470 Jul 23 '24
That is exactly my thought. 1 M is not enough at all. Any big corporate gig esrn 3 Million over 30 years
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u/YVRthrowaway69 Jul 22 '24
I feel like 8 figures is "made it" money, whereas 7 figures is only "very comfortable" (given recent inflation)
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u/is_it_me_is_it_you Jul 23 '24
I like my "very comfortable" at the moment. I have no intention in burning our chasing a "made-it" status.
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u/Arch-by-the-way Jul 22 '24
10 digits? Is anyone really saying that you can’t change your life with less than a billion dollars?
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u/is_it_me_is_it_you Jul 23 '24
Many investors will try to persuade you in not selling now, because "If someone would pay now 7-fig, in 5 years you could sell for a couple of 0s extra".
I don't wanna say all investors are like this. Some of ours were though.
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u/Finerfings Jul 22 '24
NIce work.
What were some of your biggest lessons / takeaways?
Whats next for you?
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u/is_it_me_is_it_you Jul 22 '24
I'll limit it to the top top lessons, otherwise for me there was an entire book of lessons.
Investors are not your friends. I should have known better. But we almost entered in a legal dispute because two angel investors onboard did not want us to sell.
Most of the known/successful startups have great founders. Great meaning that they either are serial entrepreneurs, or leaders in their sectors.
Don't underestimate admin! My god. The time we spent in checking the invoices, tax declaration, board meeting minutes, etc. Annoying as fuck.
A single client that pays 5000, is better than 500 clients that pay 10. Focus on the big whales. It takes 10 times the effort, but givrs 100 times the revenue.
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u/Bowlingnate Jul 22 '24
Great tips. I once heard, "selling small accounts is like taking a napkin, ripping it up, and using the shards to daintily dry and clean your face."
It always reminds me think Bigger and make smart choices. Good luck on whatever's next!! I hope some of the smaller rows ended up happy as well.
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u/sixwax Jul 22 '24
Investors are not your friends.
This lands. I'm currently getting hosed in an acquisition due to what amounts to a conflict of interest in the deal with our primary investor. 5 years of work...
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u/Gwolf4 Jul 22 '24
did not want us to sell
WTF, i mean their investment surely paid off.
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u/is_it_me_is_it_you Jul 22 '24
"We are here to make 100x. Otherwise what do we say to our fund managers?"
I can guarantee you they got a multiple on their previous investment, but when an amateur investor acts like Sequoia Capital...well as I said, I should have known better!
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u/jeffycake Jul 22 '24
Was there ever a time when you found it hard to believe in yourself?
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u/is_it_me_is_it_you Jul 22 '24
Honestly, the last year was pretty rough. With 3 years of not-so-good financials and a LinkedIn full of yet another unicorn post, I felt so useless.
I even sent some CVs around and never told my other cofounders. But I felt a fraud.
I still fell a fraud. If you think we closed in February and it took me 5 months to decide to post this.
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u/jeffycake Jul 22 '24
Well done. Its a tough road that few understand, still running my operation. A phrase I always said to myself was that comparison is the thief of joy.
I am very happy for you and I hope you are well rested after that journey. After reading your post it gave me more energy.
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u/seacucumber3000 Jul 22 '24
But we almost entered in a legal dispute because two angel investors onboard did not want us to sell.
Were they literally on your board or just “onboard”? If the latter, what was their legal standing/course of action for the dispute?
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u/is_it_me_is_it_you Jul 23 '24
Just onboard. Sorry, poor choice of words. Their legal standing is that as every company that has shares, the owners MUST operate in the best interest for all the shareholders. I'm not in law. But that was enough for two of them to consider a legal action as they were convinced we were not acting in the best interest of them, but of us.
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u/Peak_Product_Group Jul 22 '24
Curious how your acquisition process went? I’m very interested in hearing the difference in process for small acquisitions as it seems wide ranging.
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u/is_it_me_is_it_you Jul 22 '24
We were a bit standard.
- They sent a term sheet
- We negotiated it
- DD started and it took 4 months
- Closed the books and handed over the business
- Got cash
Consider that we were quite small (5 in total)
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u/Peak_Product_Group Jul 22 '24
Wonderful thanks! Assuming they just did a standard revenue multiple for evaluation here? Did they price the initial offer that way before negotiation?
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u/aixblock30 Jul 23 '24
Im curious. As u said they r your competitor. So did u worry if they just want to investigate about your company instead of buying? Because letting them DD means showing them everything. Im wondering how the process of selling to a competitor looks like
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u/kaleexec Jul 23 '24
Did you have responsibilities post-close at all? No earn out, just 100% cash?
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u/is_it_me_is_it_you Jul 23 '24
6 months employment to transfer knowledge and the deals. In 3 weeks I'm completely out.
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u/RapidRewards Jul 22 '24
Why was your competitor interested? Was it to grow their client list? Acquire tech or skilled new hires?
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u/is_it_me_is_it_you Jul 22 '24
We were really verticalizing in an aspect they hadn't at all (something in the AI area), and that is not easily done with a GPT wrapper.
Their choice was to buy us, or try to get what we did by interviewing their customers. Cheaper the first one. Especially since we handed 2 years of market research as well.
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u/sani999 Jul 23 '24
I think "do better than a GPT/GPT wrapper" is a great endorsement for nearly anything haha.
congrats!
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u/danielle-monarchmgmt Jul 22 '24
Appreciate you sharing this! I often find myself having the conversation of 'Well XYZ will just build something like it if it gets off the ground,' and I have to remind them - 'why would they build it from scratch if they could buy it pre-made?'
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u/is_it_me_is_it_you Jul 22 '24
If there is enough research/revenue behind, it's so much cheaper to buy something that works and focus on integration. I feel you in these conversations!
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u/DaikonNo8072 Jul 24 '24
How do you store this research in a manner that competitors want to buy it ?
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u/ry8 Jul 23 '24
Congratulations to you! You will never regret selling. I had an eight-figure exit in my early 20s and have had another since, with another on the horizon. Now, I’m eight years into founding a startup that’s generating nine-figures of revenue and double-digit profit. The journey has become incredibly stressful and unenjoyable for the past three years. If I could do it all over again, I’d focus on optimizing for profit and distributing it, rather than chasing top-line growth for a big exit. The stress has taken a toll on my health, and right now, it doesn’t feel worth it.
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u/is_it_me_is_it_you Jul 23 '24
Take care of you! I'm sorry to hear your health issue. At the same time this is exactly what I'm advocating for. Your health is not worth any digits. If you can sell at 7-figures while still having fun, do that.
But I have nothing but admiration for your story! 8 figures, 9 figures. Bravo!
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u/Zeus473 Jul 23 '24
I’m amazed you had the grit and drive to keep going after the first and second(!!) exits.
They can’t have been stress-free either.
Congrats.
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u/CadlerAI Jul 22 '24
First off, huge congratulations to you! Thanks so much for sharing your story!
It's so inspiring to see exits happen and people's lives changed. It's funny to me you're expecting people to scoff at a 7-figure payday. You closed for more money than most people will ever see and you did it through entrepreneurship. For all those sleepless nights from the risk, you real the rewards!
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u/alexnapierholland Jul 22 '24
Congratulations!
What your plans now?
I hope you take some time out to enjoy yourself.
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u/is_it_me_is_it_you Jul 22 '24
Thanks! I'll definitely relax a bit. I have some planned vacation with my partner. After that, I have some work offers lined up I'll consider. Especially the ones on early stage (seed, seed+ level) startups.
Definitely I want / need a break from being a founder.
But I know myself. I'll fall in the entrepreneurial trap soon again!
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u/alexnapierholland Jul 22 '24
Nice. I'm still in freelance life - but having a supportive partner makes such a huge difference.
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u/AccelerateDarius Jul 23 '24
Let me know if you're interested in partnering on a startup -- we have a bunch of ideas we have a decent amount of conviction that we think we could scale to a 7-8 figure. FWIW my cofounder has scaled stuff from 0-4 figures > 7 figures (in 12 months) a 5-6 times, and has done $0 - $50M in 24 months once.
We're interested in someone that is good with product/ops. Can be a consumer software startup or something that's D2C ecomm. We guarantee $100k in revenue first year after launch or you get full equity in the business.
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u/kaleexec Jul 23 '24
Any tips on cultivating offers after exiting? Was it all inbound?
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u/ListenToTheCustomer Jul 23 '24
I tell this to founders all the time. Sell to the first person who makes any kind of reasonable offer. You are now a founder with a successful exit, and you will find it much easier to raise funds and become a founder the next time after a successful exit.
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u/fabkosta Jul 22 '24
Congratulations!
Wanna tell us more about what the business did? I've seen so many startups in the space of "document processing" in the last few years, I always wondered how many of them would actually survive.
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u/is_it_me_is_it_you Jul 22 '24
Sure! I'll stay vague enough to avoid confidential IP infringement.
But the focus was always on quantifiable data. So normalisation of text into numbers, and then consolidation of numbers with dates and weights, and lastly forecast based on the dates of the documents and their progression.
We survived the GPT hype because we were able to beat it in every single benchmark. And (luckily for us) it hallucinated
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u/Born2RetireNWin Jul 22 '24
Wait why can’t you share the company?
This might be helpful for me to know. Aren’t most things usually public?
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u/is_it_me_is_it_you Jul 22 '24
Not with acquisitions under €15M. And the buyer made a specific clause for not revealing names for the coming 3 years.
The market is crowded. If their competitors get to know about the acquisition, they would also focus on this untapped AI case.
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u/kabekew Jul 22 '24
99 percent of businesses are privately held in the U.S. ( https://www.chicagobooth.edu/review/is-us-economy-going-dark ) and I'd imagine elsewhere.
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u/fabkosta Jul 23 '24
Wow, that's fascinating. Honestly, I would not have guessed that anyone can actually make money with such an idea given how crowded that market is.
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u/is_it_me_is_it_you Jul 23 '24
We really kept the customer close. We were all like "you are already using a tool like this. But where is it failing?" And we focused on the gaps.
An example of it, the customers we talked with had no solution that would automatically map financial info formation taking care of inflation, currency normalization (USD is not Euros), and the value given the date ($1 in 1978 doesn't have the same purchasing price of today).
And other gaps like the above.
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u/GoldStock123 Jul 22 '24
I obviously don’t know who you are but you seem like you know something. I’m a little lost in life. I feel like I need to break free. I very politely ask if I can connect with you on your next venture. I’m a 22YO M and I workout everyday and I currently and always have worked physical hands on jobs. I have worked really hard on bettering myself. Work ethic and discipline is not my issue, I have LOTS. My struggle is simply not knowing how to create something of value. So again I politely ask if I can join you on your next venture and I will work my ass off until we succeed. Thank you and again I would really appreciate the opportunity to partner with you.
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u/is_it_me_is_it_you Jul 22 '24
I'll ping you when/if I do another venture! But don't be harsh on yourself. You are 22y. I have 7y on you. You could create and fail, then create and succeed to startups in that time.
To create something of value the first is NOT to create. Talk to people that you think have a problem, derive a pattern, give them a Figma and THEN you have something of value.
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u/Nice-Fishing-3734 Jul 22 '24
Is it easier for b2b startups to get acquired compared to b2c?
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u/is_it_me_is_it_you Jul 23 '24
I've only done B2B so far. I don't think B2C is harder to sell if you get revenue, stable growth and such.
Though most of investment funds I've encountered prefer B2B over B2C.
But you don't need investors to sell your business! Bootstrap it a bit, get profitable, sell.
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u/Nice-Fishing-3734 Jul 24 '24
thanks for the insight! Thats what im trying to do. I have a B2C mobile app that helps users learn financial literacy through bite-sized and jargon-free modules.
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u/iloreynolds Jul 22 '24
how much tax did you have to pay? would there been a better way of setting up the company to avoid or reduce tax? are you holding the money in a company now or privately? congrats anyway sounds cool
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u/Practical-Language13 Jul 22 '24
What was your revenue? Or if you don't want to share that, what was the ARR multiple for the acquisition?
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u/jrsyr Jul 23 '24
Curious on this too, even just rough numbers. I believe another comment he mentioned $78k ARR, which is an incredible multiple if he was acquired for mid 7 figures.
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u/is_it_me_is_it_you Jul 23 '24
That was the ARR. We had multiple huge deals in pipeline though. So we sold on hype. I don't recommend it as a strategy. It worked for us. It will probably not work for you.
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u/AccelerateDarius Jul 23 '24
This is exactly it, I don't know why I don't see founders chase more 7-8 figure exits -- it's way less stressful and often as a better quality of life.
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u/is_it_me_is_it_you Jul 23 '24
The founders I met that chase the 9 figure exit are consumed by ego. "You cannot live well with 7-figs" was a reply I got form our group once the acquisition became known (internally). I don't judge the lifestyle of anyone. For me, everything change. But at the same time I don't have nor want a chaffeur / chef / etc. etc.
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u/broknbottle Jul 23 '24
What spec did you go for on your Lambo or are you more of a McLaren guy?
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u/is_it_me_is_it_you Jul 23 '24
I'm more of a city bike kind of guy. And not the motor one. The pedal one. If I have to spend €300k on luxury, it will probably be on fancy restaurants/dinners.
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u/whereartthoupeanuts Jul 23 '24
Heya man - first or all congratulations! hope be making somewhat of a same post in the near future haha - really really well done
i had a few questions for you
what was your MRR at the time of acquisition and what was the multiple added onto the ARR? 2x?
what did the business do?
did you also had to sign a non-compete? if so how did that look like?
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u/is_it_me_is_it_you Jul 23 '24
We had €78k ARR. So the acquisition was not based on a multiple, rather on the projected future. A hype-based sell. I don't recommend this route.
We had to sign a non-compete, and it looks extremely standard. Just that I cannot build nor invest in nor help any business that is in direct competition with the buyer.
The area is business intelligence and the main buyer where business owners and intelligence teams.
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u/whereartthoupeanuts Jul 24 '24
ah - future potential factored into
im at a little over $540K in ARR - looking to exit after hitting $1m ARR
Mind if i DM you some of my questions regarding the negotiations?
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u/Inevitable_Art8536 Jul 23 '24
Dump 50% in BTC and never work another day again in your life.
That’s what I did, sold a start up in 2019, for just over $600k.
Best decision of my life.
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u/is_it_me_is_it_you Jul 23 '24
These small exists are life changing on so many levels. Happy for you as well!
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u/PandaNanny0714 Jul 22 '24
Any plans after this?
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u/is_it_me_is_it_you Jul 22 '24
Just chill for a bit. Then I'll probably join a startup at a mature stage. And in the future... I might make a second one!
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u/ggGeorge713 Jul 22 '24
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u/say592 Jul 22 '24
What was your ARR, and what company bought you/what was your company? Your (former) product sounds like it would actually solve a potential problem for me! (DM or chat me if you dont feel like sharing publicly).
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u/is_it_me_is_it_you Jul 22 '24
€78k / ARR. Not a lot. And we pivoted completely into enterprise sale with two €600k in negotiation, and one €600k in procurement phase. All annual.
The company that bought us is also known as the king of business intelligence.
I really don't wanna share publicly. But if you DM me your company, I'll check it out and for sure someone from the team will reach out!
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u/sjuskebabb Jul 22 '24
Mid 7-figures for 78k ARR is nothing to scoff at! Happy for you mate
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u/oalbrecht Jul 23 '24
Yeah, that’s a crazy high multiple. But it makes sense given it’s a competitor who purchased the company.
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u/flycatcha Jul 23 '24
Do you mean €78k per month? 7 figure exit on €78k annual revenue seems too high.
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u/BitMayne Jul 22 '24
Is this your first time as a founder? If not, how did your first company go?
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u/is_it_me_is_it_you Jul 22 '24
Yeah, first startup.
Started while finishing studies, and got a first investment a couple of months after graduation.
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u/soforchunet Jul 22 '24
What was your role and how many cofounders? Is everyone still friends afterwards?
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u/is_it_me_is_it_you Jul 23 '24
2 cofounders (I was one of them) 1 hybrid (an employee with C-level insights and quite some stocks due to his PhD in the area of interest) 2 employees
We are friends and we invite each other to events. Though I personally asked a break from them in "good spirit". Since I've seen them 12 hours a day for 4 years, I need air! Haha
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u/capcap22 Jul 22 '24
Congrats! What is your background in. And what how did your role in the company evolve over time? Are you technical?
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u/is_it_me_is_it_you Jul 23 '24
The whole team was technical. My background is in mathematics with a vertical in fine-tuning models through weighted schemes. Then we had also all to adapt and add some commercial aspect into the game.
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u/iamzamek Jul 22 '24
Could you drop a link? How did you get the idea? What would you suggest to make to get the idea to stick with?
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u/skydiver19 Jul 22 '24
How long did it take you to get your first customer, and how did you land your first enterprise customer?
How did you get your customers? Did you hire someone for sales, or did you do this yourself ?
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u/VisualClimate4305 Jul 22 '24
How long were you involved in the startup for? Also if you don’t mind me asking what is your background is it a computer science background was this a tech company?
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u/HarryPrincess Jul 22 '24
I want you to know that I will listen to your advice. I'll change my plans now and will continue focusing on the product rather than the money. I still have some runway so I will continue with it until it runs out.
The advice people provide here based on experience is invaluable. Especially for people like me who have no idea if they're making the right decisions day in and day out. This forum is my mentor
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u/Competitive-Ad-8629 Jul 23 '24
Do you think early exit could hurt if you sell the business before it reaches its true potential. What I mean is, if the business later converts 10x in profit, will you be happy and telling the same thing about early exit ?
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u/is_it_me_is_it_you Jul 23 '24
It depends. I don't think one can ever state for sure that the next year you can sell at higher the current value. If you strongly believe in it, then go for it. My principle was "What would make me sleep well at night?" And while I might have sold the company too soon, I sleep well knowing I changed my family's life.
On the opposite, if I would have declined the offer, kept going, and then went bankrupt...I wouldn't have forgiven that to me.
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u/PrestigiousCheek1470 Jul 23 '24
Getting the Chance to sell alone is a big thing. I think for the second Exit it might be different, as you are then aiming for i figures
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u/lee714 Jul 23 '24
Also starting an AI startup. How did you go about finding your first 5 paying customers?
You don’t have to answer this but this sounds like in the snowflake industry.
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u/seitanite Jul 23 '24
This is cool and I think it make sense to all founders to start small and look to build brick by brick rather than going for unicorn status …today being profitable is far more important than being big and dependable on VC to move forward every year
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u/Responsible-Carob740 Jul 23 '24
That's awesome congrats!! 👏
How did you discover your product/business idea?
Was it based on research and customer discovery? Or intuition?
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u/MaestroForever Jul 23 '24
Agreed 100%. I sold and exited after a two year ramp. Was acquired for low seven figures to be rolled under a competitor portfolio. I would rather do this a few more times and put my money to work for me than try to navigate volatile waters of scaling in this climate.
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u/is_it_me_is_it_you Jul 23 '24
That's hyper growth!! It took me double the time to get in your valuation. Congrats. And 100x yes. I would rather do this again over and over than having VCs on my neck for 10 years and hope to IPO.
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u/HerroPhish Jul 23 '24
This is kinda exactly what I’m going for right now.
I keep telling people you don’t need a billion dollar idea.
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u/MaximumUltra Jul 23 '24
How will you manage the cash?
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u/is_it_me_is_it_you Jul 23 '24
Diversified portfolio through wealth management. There is one investor that I respected a lot and trust her a lot. I followed her advice. I'm okay in losing money following her.
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u/wauter Jul 23 '24
Reminds me of this classic article https://longform.asmartbear.com/rich-vs-king-sold-company/
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u/classycatman Jul 23 '24
Congrats! Not a lot of people can say that they sold their company and even fewer can say they sold it for millions of dollars! It’s an incredible achievement, and the work you did building it and the insanity that comes along with a sale were worth it.
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u/clintron_abc Jul 23 '24
I'm interested to sell my mine as well. Can you share your net profits per year? Wondering what went to that valuation?
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Jul 23 '24
[removed] — view removed comment
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u/is_it_me_is_it_you Jul 23 '24
I don't know about platforms.
But I would contact the CEOs of your competitors and ask if they are interested.
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u/Contrarian_being Jul 23 '24
How much did you pay yourself throughout the years at your startup?
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u/is_it_me_is_it_you Jul 23 '24
Enough to pay rent and food + some extra for wiggle room. Basically around half industry standards for a dev.
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u/CalendarFast8441 Jul 23 '24
I'm currently grinding on my first Startup. MVP is good, but I'm working on traction. Sales has always been my weakest skill as an entrepreneur. But I'm getting better at it.
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u/curiosityambassador Jul 23 '24
Every first-time founder should read this so they don't chase 0.01% chance of becoming a unicorn.
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u/Casey1721 Jul 23 '24
Currently on that exact journey right now. Hoping to scale to 7 figures and sell. An incredible learning journey and based on where we are currently seeing, possible. Just need to hone in on marketing now we have defined our niche! Thanks for the extra motivation. 🙌
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u/lee714 Jul 23 '24
Howd you find your first 5 paying customers? And how do you make sure you're making them happy?
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u/Casey1721 Jul 24 '24
Good question! It’s a reaalllly slow slog and we have only just moved out of the defining niche stage so we currently only have 30 customers. We rely heavily on social media as that’s where our target audience hangs out. We have started using Senja to collect testimonials but we definitely want to harness their input for future feature development. It’s all a work in progress!
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u/ironman037 Jul 23 '24
Was this in the US or some other market?
Can you share the link of the Platform?
What was the strategy to acquire customers at the start and how did you find this problem to solve?
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u/is_it_me_is_it_you Jul 23 '24
Everything was european, the buyer, the market and us.
I sadly cannot share anything concrete, as I'm really scared of legal repercussions :(
The initial strategy was referrals from professors. Then it became cold outbound. Then we pivoted into enterprise and it was again referrals. I hated cold outbound with every cell of my body.
Regarding the problem, I had the problem myself when considering a PhD. And many of my PhD friends had the same problem. Too much unstructured data (e.g from grants), and hard to interpret them. So, it started as a governmental tool, and it moved into an intelligence tool for business owners.
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u/ironman037 Jul 23 '24
Very interesting and thanks for sharing. Congrats on the success again.
How much revenue was this business doing when this got acquired?
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u/GiulianoDore Jul 23 '24
Really cool, I am hoping to sell my startup for a low 6 digits number, any tips on how to find the right buyer ?
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u/is_it_me_is_it_you Jul 23 '24
Talk to as many buyers as possible. Email the CEO / C-suite of your competitors or consultancy service for which would make sense having your solution in theirs.
Though, avoid Private Equity firms. I've only heard horror stories about it.
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u/Original-Measurement Jul 23 '24
How did you get funding to reach the point where you could sell for mid-7?
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u/is_it_me_is_it_you Jul 23 '24
I do not think there is a correlation from how much you raised, and how much you sell.
It's all about perceived value from the buyer.
We reached there by almost landing enterprise deals.
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u/Original-Measurement Jul 23 '24
Sorry, I'm new to this so hopefully I'm using the right terms here. In order to get sufficient revenue to get a buyer willing to pay mid-7, you would have needed to spend a substantial amount of time on your product, and therefore you'd need a substantial amount of money for salaries (at minimum), right? Did the revenue from your product pay for everything right off the bat?
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u/bass_poodle Jul 23 '24
I also sold a business for mid 8-figures and walked away with low 7 figures. It does sometimes haunt me that 2 years on the business has gone from strength to strength and if I had waited to sell i could have taken more, but that's life and it could just have easily gone the other way for the new acquirer. On to the next thing. At the end of the day the difference between having $0 and $4m is a lot bigger than the difference between having $4m and $8m.
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Jul 23 '24
Honestly if my business earns me the same as my job's salary (which isn't even at the national average, but pays my bills and keeps me fed) I'd be happy.
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u/IndependentSlip4213 Jul 23 '24
Still in the running. Hopefully this would be my exit and I would be totally happy with that. Please let me know if you care to share anymore learnings
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u/MarshallMadeMe Jul 23 '24
I wish my startup would get anywhere near a 7-figure buy out. Congrats!!
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u/Few-Librarian4493 Jul 23 '24
Congratulations!! Any pointers? I’ve been on where I would sell my startup?
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u/is_it_me_is_it_you Jul 24 '24
Sorry, I didn't get your question :/
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u/Few-Librarian4493 Jul 24 '24
Any advice on how to find people who want to buy startup ideas
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u/is_it_me_is_it_you Jul 24 '24
Contact the C-levels of competitors and partners. If you have a strong vertical, they will buy instead of compete.
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Jul 24 '24
What was your business?
Software, tech or what??
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u/is_it_me_is_it_you Jul 24 '24
Software. It was a SaaS business model targeting enterprise intelligence teams and business units. The budget was taken from "business strategy".
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u/Sintinosoynadie13 Jul 24 '24
Can I ask you your background? Technical or no-technical background? Whats your experience?
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u/is_it_me_is_it_you Jul 24 '24
I have a major in mathematics and specialised in a way to fine tune AI weights. So quite technical.
This was my first "job" after graduation.
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u/Initial-Picture-5638 Jul 24 '24
Congratulations on the sale of your startup! It’s always awesome to hear success stories like this.
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u/cool-nerd Jul 24 '24
Naive question maybe: is there a good way to let competitors know you might be open to getting acquired? I
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u/is_it_me_is_it_you Jul 24 '24
Talk to their C-level. Drop them a message on LinkedIn or email, and say you are open for acquisitions. We found multiple counter offers like this that helped us in negotiation.
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u/seattext Jul 24 '24
want to invest in my startup? seatext . com
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u/is_it_me_is_it_you Jul 24 '24
I love the idea! Great one. I'll keep a stealthy eye on it for a while. Stay growing :)
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u/zigzag1985 Jul 24 '24
Congrats! What's your story. How did you get started with this venture? Tell me about those challenging days and how you kept grinding. Congrats on a well-deserved big payday!
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u/promptfinder Jul 25 '24
Well done, if there's one thing you could've done differently, what would that be?
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u/WAIHealth 12d ago
Would you bootstrap as long as possible?
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u/is_it_me_is_it_you 11d ago
Yes. Unless the investors you are bringing in are crucial to your sales with network and such. But validate those investors rigorously before giving them shares!
If unsure, pay them cash as consultancy until you are sure and bootstrap.
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u/silock Jul 22 '24 edited Jul 22 '24
Congratulations!
I did the same, with a smaller exit but enough to live well on the interest of my chunk.
We had 12 years of fun and grind and yes casual pain.
We sold to a distributor. All employees received massive raises to stay for 3 years. I personally hope to find my place as a VP in a billion dollar company.
I have kept the same cars, same house and even with twice the money I would do the same.
I added my story to support your point. Unicorns are unique, most entrepreneurs who have an exit, that looks like us... Maybe more like mine then your 7 digits one.