Ask HN: What do I do about my startup I'm no longer passionate about? | Hacker News Reader

Ask HN: What do I do about my startup I'm no longer passionate about?

12 points_anon_founder9 comments

[I'm a longtime HN user but I'm about to share some personal details and would like to remain anonymous.]

Several years ago I made a social game that took off. I capitalized on the growth and bootstrapped a startup off of the revenue coming in. Times were good and our best year we did nearly $2 million in revenue (with well over a million in profit).

Well, now it's been several years and things have cooled off. We're running right around break-even (depending on the month). Part of this is due to the market we're in, part due to poor decisions on my part (not successfully transitioning our IP to mobile), and part because I'm not really passionate about gaming. I started the company on accident and didn't plan to be doing it after so many years. Personally, I'm ready to move on to something else.

But herein lies the problem. We have users (hovering a bit below 3000 paying subscribers to our monthly membership). And we have a team (3 full-time, 5 part-time contractors).

So, the obvious solution is to sell the company. That's what I've been trying to do quietly for the past 6 months or so. I got an investment bank to shop us around to our competitors. Nobody's biting. We're too small in this industry to be attractive to the logical acquirers (who are mostly multi-billion dollar public companies). And nobody wants to buy a company where the founder wants to leave.

The company is definitely worth more than nothing but without a buyer I don't know what else to do other than to just turn it off.

I don't want to leave my users hanging. And I don't want to sell for pennies to someone who just wants to spam our user list. I also don't want my team to lose their jobs because their boss just up and quits.

What do I do here HN? I want out but I feel like I have responsibilities and obligations. Is there an exit strategy for me besides selling or shutting down?

You can sell it to your employees.

If your employees don't have the cash, you can lend the money to them to pay it off over time.

You can also consider a profit-sharing arrangement if you want to retain a stake in it, staying on as advisor.

Or even still, give it to your employers to manage it on their own giving them a free majority stake.

Why not hire someone to run the company for you or at least handle the majority of day-to-day operations? Possibly promoting one of your existing employees into a leadership role or "co-founder" role if this is something you would consider.

I would be upfront with your employees now. Maybe one of them has an option you have overlooked completely. Also, if you are honest with them now, it may help with any potential outcome down the road (for example, if you do end up having to shut down it is not a complete surprise to them). Also, by opening up about it, you might consider posting more details about the company here. Who knows maybe there is someone here who would consider making the purchase or taking it over for you.

Just a couple thoughts. Good luck!

Absolutely. There are plenty of talented people who would leap at an opportunity like this to take over the day to day and grow the business. You'll still need to be involved but can scale way, way back once you get the right person up and running.

The challenge for you will be power sharing and letting this new leader take the reigns. But it can be done. I would recommend tapping the advice of other founders who have handed the reigns.

And yeah asking a current team member if they're interested is a great idea, provided you believe in them.

You might have to face the fact that the business really is worth nothing. A business with declining revenue and dying technology is not an attractive opportunity.

As has been suggested already sell or give it to your employees. Retain a small stake and if they do well then you will get something out of it.

The other alternative is to put it into run out mode. Fire everyone you can and just milk the business for as much cash as you can with the aim of driving off your customers and winding the business up.

Depending on the nature of your business, you could get between 2-3.5k X (your annual profits + founders wages)

Highly reco. looking at this:

http://www.startupsfortherestofus.com/episodes/episode-197-h...

The OP said he is just breaking even so unless he is paying himself a fortune then he won't get much for the business.

[I'm a longtime HN user but I'm about to share some personal details and would like to remain anonymous.]

I try not to spam this into every Ask HN, but this would be interesting to do non-anonymously.

Sounds interesting.

Would love to talk, e-mail is on my profile.

It is worth money! not pennies!

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