How to Sell Your Company | Hacker News Reader

How to Sell Your Company

jacquesmattheij.com

114 pointsDanielRibeiro19 comments

I'm currently in this position and for me the article (though I read it a while ago) has been bumped at a time that makes it a nice reminder.

I suspect in my case that the purchaser has three motives:

1) The acquisition of a stable and profitable media business, with continued growth in an area that they are not present.

2) The acquisition of modifications and code that enabled my forum to grow as it has, and would give the potential for their existing forums to grow similarly.

3) As #1 and #2 aren't worth the kind of offer in consideration, that they wish to acquire me.

I'd love to see the article updated with reference to the third point... the acqui-hire.

The offer being discussed is attractive, but I'm very wary of the acqui-hire as what matters to me most isn't this particular website but the technology piece I'm building separately. That's the real startup, and that's why I care deeply about.

From my point of view, the offer I have is being reduced to: If I accept it, it may prove to be a distraction of such size that I end up killing the project I care about the most, my technology startup (rather than the forum which is more lifestyle business).

Anyhow... Jacques, if you were considering an update or 2nd article, considering whether to sell in the face of what appears to be an acqui-hire offer would be something I would love to see.

In many cases the value of your business is based on a combination of your talent with the other business assets especially market share and revenue prospects. So many small businesses are acquired in a way that the founder(s) are retained and strongly incentivised to keep growing the business.

One way to understand what the offerer wants is to look at the deal structure on offer to infer what they want from you. If there is a lot of emphasis on future profits then they want you to keep growing your business, if there is shares in the parent business then thats where they'll want you to focus, etc.

Finally, as per Jacques article, consider other sale options - can you find other buyers and get a competitive process going, etc.

The verbal offers (and emails) have thus far put an emphasis on shares in the parent business, above market salary and a non-trivial purchase price.

From this I felt that the emphasis is towards working for the parent company over any continued growth in the community sites that I run.

As the web sites continue to pay me a very modest (read: barely but just about liveable) wage. I'm of the opinion that I shouldn't really consider the sale at all.

Right now: I don't need the money.

And, right now: I have the freedom to work on the startup and to being the idea alive.

That's worth far more to me than any monetary offer is. Mostly I'm trying to rationalise all of this so that when I explain to my girl why we continue to eat dry pasta and I turned down an offer of wealth that she doesn't thump me over the head.

I'm prepared to sell a successful, profitable and growing community website. But only if doing so helps increase the chances that my startup will be a success (by giving me funds to get an extra pair of hands and a good runway with no distractions). I'm not willing to sell if it in any way jeopardises the potential of the startup. And as the startup is barely mentioned but I'm expected to be full-time, then it undoubtedly would do that.

Ok, I risk here massive downvotes, but I really like to know why HN worships Jacques Mattheij. It's third writing in last three days on frontpage. I must admit he is very good writer I really enjoy to read his posts, but still. If every single blogpost he writes must find his place on the frontpage of HN, shouldnt we just add his feed on our RSS readers and be done.

Well, first, he's a got ton of really interesting and crazy experiences, and translates into it practical knowledge... second, he goes on writing tears every now and then and cranks out a lot of quality content, then gets quieter for a while.

I actually dislike him on a personal level and think he's a jerk, and disagree with many of his philosophical stances, but despite that it's hard not to respect the guy and his writings and desire to give back / share his knowledge.

It's quite common for someone to be "on a roll" and have most of their blog posts do well on HN for a period of time. These things come and go a lot here. Authors eventually don't keep up the volume and/or quality or people tire of the topic.. but I can't think of anyone whose posts have done strongly on HN every time over the span of years except pg.

Isn't daringfireball also like that here?

Why was the original thread deleted? ("Good reasons" were mentioned, but not explained)

Because if the sellers would have found out about the HN thread it might have negatively impacted their ability to negotiate a good deal, they showed quite clearly how weak their negotiation position was.

anyone know how it turned out? Did they sell?

> In this case the solution for that (and any M&A lawyer worth their salt would include something to this effect) would be to do part of the deal in cash and an acceleration clause that states that if the buyer terminates one of the original founders before the stock vests that their stock vests immediately. That way the problem simply goes away. If the buyer would not accept a clause like that then that’s an excellent reason to suspect that they actually will fire you on day #3, and if they have no problem with such a clause that will increase the goodwill between both parties.

Wait. Isn't the whole point of vesting to make sure that the founder will add value and not leave on the first day?

A clause like this means that a founder can stick around, do nothing of use, get their vesting period out and then leave. They can't be fired or they leave with all the stock. Exactly the opposite of what the vesting intended, right?

I think a founder is unlikely to be the kind of person who can sit around all day doing nothing. I used to have a job where I had literally nothing to do four days of the week and it almost drove me crazy. I could not sit idle all day on purpose.

Well, nothing of use. I could not show up. I could show up and work on my new cool project instead of the one I sold. And they can't fire me because they would have to give me all the stock.

I'm guessing this is the deleted thread:

http://news.ycombinator.com/item?id=2154106

(*the process is over, so there's no point in hiding it anymore).

Also, this is the previous discussion (210 points) of this blog post:

http://news.ycombinator.com/item?id=2254069

There's a wonderful book about this, Built to Sell, written as a story but based on a business seller's experiences:

http://www.builttosell.com/

It's a good read even if you're not thinking of selling because it covers creating efficient processes, delegation and general streamlining. (No affiliation, by the way)

Its worth noting that this is an old post.

Is there a cache on the "original thread"?

Thank you for the insights, but this post is way too long, you might want to split it into series :)

Congratz on the effort though

I'm just the submitter. The author of this amazing piece is actually one of the top 10 HN contributors: http://news.ycombinator.com/user?id=jacquesm

Some of the best startup options/acquisitions info I've read from HN community, along with the comments on this[1] thread, and ChuckMcM's comments[2]

[1] http://news.ycombinator.com/item?id=2623182

[2] http://news.ycombinator.com/item?id=4425364

Reply on news.ycombinator.com