Ask HN: Planning on selling statup, what do you think it is worth? | Hacker News Reader

Ask HN: Planning on selling statup, what do you think it is worth?

3 pointsyoungdev8 comments

Hello Fellow HN,

Last year myself and two other partners got together to work on our startup. We got an offer from one of the YC competitors for 40K seed money. We turned down the offer because one of the founder was expecting a baby 2 months later and one founder was in process of re-location.

Fast-forwarding to today, we kept on working on the idea and bootstrapped it. We all are making 100K plus salaries so did not feel the need to quit our jobs for 40K.

We are at the stage where we now think that it is better to spin off the startup as we can no longer contribute our time to it due to personal commitments.

What do you think something is worth which had 40K seed offer and has a working product?

Note: we have not launched the application yet to public. It was only shared with Friends and family and few investors and got good feedback.

View on HN

My instinct (knowing nothing about your business or it's potential) is to launch but maybe you have legal or financial or personal reasons for not doing so.

There's a potential problem of perception from a buyers perspective:

The buyer is getting an unlaunched, friends & family market tested batch of code. Further, it is apparently something the founders don't believe in enough to take a chance on. (big red flag.) I'm not saying it doesn't have value, I know all about life choices and timing (spouses, kids, mortgages, car payments.) You just have to be aware of what you may be communicating to a potential buyer.

If they were planning on building it they might buy it but if they can build it for less, they might just do that.

I would be very tempted to launch it and see if I could get some traction. It's going to be worth much more if you can get some adoption. Yes this is riskier, if it flops out of the gate it might be worth less, realized than it was when it was all potential energy.

When it comes to the $40k: was the seed offer about the product or the team? Very commonly in seed people are betting on the team as much as the product.

Can you find someone to take over and execute on the product but leave you and your partners in the equity mix? This is risky too, you might get washed out but it's an alternative if you can't sell it. Some return may be better than none.

Can you sell your codebase to a potential acquirer? What large company would benefit most from having this product in their offering? Could you sell it to a potential incumbent who hasn't innovated in a long time and is suffering from stagnation? It might be cheaper to buy it than for them to pay to have it built. Essentially a contracting gig on spec?

We are not selling it for money. We are selling it so we can see our idea taken to the next level. Ofcourse, in the process we would like to make our invest back. We are thinking to let it go for the money we have put in it (which is not a whole lot) and not seek any additional profits.

The offer was just last year. You probably can go back to the table with them to talk about the offer they made and if they're still interested.

Or, shop around, which is time-consuming. If there are multiple offers, it's up to your group to decide.

Or, this may not the option you're looking for but, i think, this is your BEST option....

SHIP IT!

Only then you'll know how much it's actually worth. Look for ways to manage it - outsource the management of the product if it needs some backend support. Maybe find another co-founder who has the time to run the product.

I like the idea of finding another co-founder who can take the lead and run with it. We can provide some back-end support as needed.

Just ship the darn thing. Any money you receive from selling won't be life changing, and will help you out in the short term. Also, it sounds like you're pretty much done with the product development - marketing is important but it's less time consuming, and less stressful than the actual development. Go for the home-run.

Nothing probably. Very few people want to buy a pile of code with no users, revenue, or team to go with it.

How do you plan to find a buyer? The price is probably going to be quite different if you put it on eBay and hope for the best, versus if you have some networks where you can market it privately.

We haven't though about that part yet. I think there is a site called Flippa.com but seems like that site is sell site which have ad revenue or customer. So not sure yet.

Reply on news.ycombinator.com