How to sell your startup for millions
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- Опубликовано: 2 июн 2024
- When and how should you sell your startup? M&A (mergers & acquisitions) are always a high stress process, and there are a lot of things you have to consider when you are trying to get a startup exit executed in the right way.
Read Paul Graham's essay on Default Alive vs Default Dead here: www.paulgraham.com/aord.html
Garry's startup Posterous was sold to Twitter for $20M and Andrew Lee's startup was sold to Zynga too. As venture capitalists today we work with more than a hundred startups from the earliest possible stage to now a total market value of over $36 billion. We've seen nearly every kind of startup exit and regularly try to help founders as they navigate these problems.
This short video encompasses a lot of the advice we end up giving frequently to our community.
![Biggest Startup Failures of ALL TIME [2023 Edition]](/img/1.gif)
2:21 - Strategic acquisitions
3:24 - Revenue acquisitions
3:48 - Talent acquisitions
4:20 - "Startups are bought, not sold"
4:36 - Why Posterous sold
5:40 - Why JamLegend sold
8:55 - When should you consider M&A?
- Early stage and have money?
--> Focus on getting product market fit
- Early? Still have runway?
--> Work on M&A when you think you might die
11:48 - Ask the right questions to orient yourself
- Atul Gawande's "Being Mortal"
12:04 - 1/ What is your understanding of the situation and its impact?
12:16 - 2/ What are your hopes and fears?
12:37 - 3/ What are the tradeoffs you're willing to make, and not willing to make?
13:10 - 4/ What is the course of action?
13:33 - Levelsetting with your team
14:27 - You want to sell, now how do you do it?
14:38 - Tip #1 - Cultivate Strategic Partnerships
14:55 - Tip #2 - Go through product, if you can, not corp dev
15:23 - Tip #3 - Extend runway: Get revenue & decrease burn
15:59 - Tip #4 - Have leadership interview first
16:39 - Tip #5 - Check references while you get more BATNAs
17:18 - What is the #1 thing that kills deals?
- Don't treat corp dev like a fundraise process
- Always have a BATNA in place
Thanks for doing this!!!
“Companies are not sold, they are bought”. I like that
Pithy and true
Tbh, I don’t get it
@@solomonschwartz4483 bruh, me too
@@solomonschwartz4483 me 2
@@solomonschwartz4483 we are assuming the company is growing progressively, then founder/owner may not consider heavily on selling, rather the invester approaches and deicides to gamble and buy it for the value of it today, estimating it's growth of value
Your HQ is really nice. So zen.
This is so underrated. Keep going Garry!
Love how you reference PG essays - it enhances your videos.
Glad you enjoy it!
Great content guys. Thanks for the candid interview.
Great "dense" Q&A. Much appreciated.
Hey Garry, great video.
I have a question for you - what resources (books etc.) do you recommend so that I can start "seeing opportunities" on the market for a potential product-market fit? I am just about to graduate with a Computer Science masters degree and will most likely get a job after I graduate. However, I would like to start my own startup at some point (preferably me being the only employee), with the specific purpose of later selling it, but I wouldn't mind working hard on the startup for 3-5 years. I honestly wouldn't care if it is a SaaS company or something else - I would most likely enjoy the process of navigating the business world, meaning coding + sales and negotiation and other stuff.
I don't see the opportunity yet. In the meantime, I'll keep "sharpening my blade", meaning brushing up my coding skills.
Thank you for all the value you are bringing!
"Also think about potentially having more competing offers from other acquirers" --> Unless the LOI grants exclusive negotiations to your potential buyer, who will try to weaken your BATNAs. Thanks for the video, great content!
Please do more of this. Really great !
Brilliant! Thank you for the four questions! It really made me think deep about my startup.
Would love to see more vids on the real stories behind some acquisitions & aquihires!
+1
Check out the acquired podcast! Some really great stories and insight about different acquisitions
I really enjoyed this Gary. Well done.
Thanks for watching!!
This is a fantastic talk, so valuable. Thanks guys
Thanks so much for a great video! I'm creating a new startup at the moment. I want to be able to build products, prove concept, prove market, sell, and repeat! There's some really helpful advice in this video :)
Thank you for the video. It was very insightful. Gave me hope during times like these
You are so welcome
Hey man you are incredibly inspirational.
Thanks for watching!
This is great. There needs to be more content on acquisitions. It seems like acquisitions by private equity companies were excluded from the discussion.
Probably because those aren’t really an exit - management typically gets an earn out clause whereby they receive payouts for achieving certain financial targets in X years. The exit happens when the PE firm sells or IPOs the company.
High quality content within the entrepreneurial space, really really good. Subscriped for more. Thanks!
Great video! First 30 seconds were real
Glad you enjoyed!
Startups are sold, if they have to sell at a lost or are sold to prevent them from going out of business. The startups that have x’s after them are bought.
Your HQ is just beautiful!
Thank you. Important topic.
Great video gents!
Amazing video
I appreciate your content. Is there a possibility you make a video with Peter Thiel in the Future?
HELL YEAH!Get Peter!
Peter's book and his Gospel of avoiding competition and looking for secrets is the only truth you need to fully grasp when venturing down this treacherous and unforgiving path of entrepreneurship 👊👊
I would love a video with my Frankfurt fella Peter :)
@@michaelcjakob Achso kommt er aus Frankfurt?
Quite interesting insights into how startup M&A work
I like to start an e-commerce, I’ve researched to see if are any competitors or if a business already exists. But there isn’t any business out there yet. But I’m not familiar or how to go about setting the business up. The closest business to what my idea is Fresh and Easy. But mine is different from that. I’m not going to go into details here as you understand why. Do you know how or who I could approach or where I could get more assistance for this? I can be reached at Kheam1904@gmail.com
Want to get your personal suggestions for my start-up how do I reach to you
Love from India❤️
you're a higher quality gary than gary vanderchuck
Just trying to live my best life! I'd like to make my videos about my lived experience, the ups and the downs together. Gary does amazing work though. I hope to put a new spin on things.
But when a company is bought, who is paid? The funds or the person? (I mean if the person gets the money in his bank account)
The cap table which is partially the founders and partially the investors.
Can we see an acquisition pitch deck?
Thanks!
liked, commented and subscrided... awesome vid!
Can you help with a sale of the company? If yes, how can I reach out to you / your team?
How big of an acquisition is a deal that's very small? Is very small like 3 million? Less than a million, or like 15 million?
Thanks Garry, this is great.
Hello Garry, interesting topics in the video! Wondering whether you have some experience working with Silicon Valley Bank to get fundings to support your startup? Thanks!
Well they are a bank, so they do venture debt, but that's about it. Venture debt only comes behind usually a Series A equity fundraise.
@@GarryTan Understood. Do you have some first-hand experience with them or do you usually sell your company before Series A? I am asking because I am doing some research on Silicon Valley Bank (i.e. buy their stocks) and would like to learn something about that company from the perspective of startup founders who deal with them directly. Thanks in advance!
They are pretty good at what they do.
Man I got Startup vocab flash cards now! lol
do we get all money ourself ? if sold startup
So you guys have that money in cash or hiw is it all together? Cause 100million is huge right
i cant really think of many indian startups that werent eventually bought.... i know so many peopl who just want to start a company for the ultimate purpose of an ultimate sale. which is sad
Well it's up to the founders and what their motivations are. Making money in tech is easy. Having impact and meaning is the true brass ring.
We can create meaning for India!
Why is it sad ?
Profit over purpose
Give offline too
I have a business model I’d love to pitch to you guys! Would love to collaborate!
My IG DM is open
How much can I sell a company for? Is it a good idea to count yearly revenue times 10? It's a SaaS company I am wondering about.
There’s not a usual. Talent acquisitions are as low as $200K per engineer. They tend to be illiquid markets so it’s more a function of how much does the seller need to sell. If they don’t and the buyer wants it a lot, the price can be a lot higher.
Guys. Does everyone have to sell their company? Does anyone invest to hold on to and just enjoy revenue. Oh. I think you just mentioned it. Because some of us want to build and keep our companies forever. We're not building to sell.
Infinite mindset. Love it. Seems very rare in the startup community.
What's the meaning of M&A??
Mergers & Acquisitions
I am never selling, it’s not about the money…making money is easy building a dynasty is a different ball game… great startup companies have been bough for no other purposes than to take them out of the game… Microsoft was great at it, think how much better technology we’d have today if not for a Microsoft destroying every new startup that was a threat.
I had a competitor buy my company, only to destroy the software that was ahead of its time… unfortunately it was after the Dotcom boom, so funding sources were cut off.
Google and FB are now doing the same thing, but now it’s to control the communication information platform… don’t underestimate the evil of some of these Oligarchs to control the narrative.
Tech reminds me so much of Hollywood - which is like a factory of getting Farmed & Fucked. How does someone protect themselves in tech?
It’s capitalism. You have to find your tribe. People have always found ways to band together to protect themselves.
@@GarryTan You just un-capped the major difference between Tech and Hollywood, and it's greatly appreciated. In Hollywood, your tribe is individually out for themselves. From all the videos and essays, I can definitely see the fraternalism of Tech.
Only millions? I am selling my company for nothing less than BILLIONS!!!!
Well I'm in a different position I cant seem to find anyone in!
Alot of people want it to work!
Alot of people mad they couldn't steal it from me!
They only hate me, so once it is sold the problem goes away!
Didn't realize how many people were involved and sad my family was bribed to facilitate the attacks! It is really funny honestly lol!
Awesome video, I would like to subscribe to your channel if I wasn't already.
Thanks Daniel!
Garry. Is there any Chinese female successful entrepreneurs you can interview?
Just lie about the product
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