There are tons of marketplaces out there where you can buy or sell your tech startup business. Some of these platforms include Flippa, Shopify Exchange, and…
According to the founder of Idealab Bill Gross, five key factors influence the success of every startup business. They are the business idea, a strong team, business model, capital, and good timing. Unfortunately, it’s not that easy to combine these factors to drive a new tech business to success. You’ll most likely encounter several challenges trying to do that. Unfortunately, the business might fail if you’re unable to address the challenges effectively.
As a tech startup owner, one best decision you can make once you start feeling the business will fail is to “sell it.” But how exactly do you ensure you’re making the best out of your failing business? What are the best marketplaces to sell your startup business? These are the questions you’ll find answers to as you read further.
Although there are tons of advantages attached to selling a tech startup, you need to keep in mind it also has its disadvantages. People sell their startups mainly because the business is failing. However, others decide to put the business on sale because they need money to pursue their dream business.
One of the advantages of selling a tech startup is to generate more money to pursue other businesses. This makes even more sense if you’re selling the startup but remaining in the business.
Another importance of selling a startup is that it allows you to pursue other business opportunities. This is especially true if the startup business is already failing. In this case, you’ll get some money to begin another business. Besides, you might even decide to start working for other people, depending on what you want.
Selling your startup business could be a better way to fund your decision to take a break from work. You could use any profit generated from selling your company to go on a vacation with your loved ones. Besides, you can even use parts of the money to pay off your debts.
Businesses can fail because of several different factors, including worn-out founders and a lack of business direction. You can always make money from your failing tech startup; to do that, all you need is to consider the following tips:
The very first thing you need when selling your tech startup is to set realistic pricing expectations. But how exactly do you go about that? It’s simple; all you need is to make a genuine valuation of the company. After that, you need to share the worst-case and best pricing with your shareholders and stakeholders. When evaluating the price of your tech startup, you need to consider a couple of factors, such as the value of your team.
Since you’re selling a tech startup, your target list should focus on companies that could have an interest in your business.
Ensure your target list includes companies where you share the same users. A startup can be worth millions of dollars to a company and nothing to another company. So, be wise when selecting your target company. For instance, Visa agreed to buy Plaid for about $5.3 billion in 2021. If Google were to be the targeted company, it’s most certainly that Plaid would be worthless.
Furthermore, when selecting your target companies, ensure to add startups and public firms. If what you’re looking for is immediate cash, you can always trust public companies to deliver. However, if you’re interested in future stocks, startups will most certainly come through for you.
Before showing off your tech startup to potential acquirers, ensure the company is presentable. Make sure you follow due diligence. For instance, your financial statements need to be current. Besides, you need to keep a proper record of all your business transactions.
Furthermore, ensure to keep information regarding your employees intact. All information regarding the company’s equity should also be readily available. Also, ensure to resolve all personal issues that could affect the sales of the business.
There will be a time you need to answer certain questions from the potential acquirers of your tech startup. Any acquirer with interest in your company will most likely ask you to talk more about your business and technology. To be on the safe side, ensure to ask for an NDA before sharing any information. This way, if the company fails to acquire your business, you can always ask for the deletion of any information you provided.
Investment bankers are experts that work closely with a financial institution, raising capital for corporations. They can also help enhance a deal when negotiating with your potential acquirers.
The only problem, however, is that it often takes time to find an investment banker with specific experience in your domain. If you can find a good investment banker, and you’re sure your startup needs it for a better deal, go for it.
There are tons of marketplaces out there where you can buy or sell your tech startup business. Some of these platforms include Flippa, Shopify Exchange, and Indiemaker.
Occupying the top spot on the list of marketplaces to sell a tech startup is Flippa. Founded in 2009, this San Francisco (USA) and Melbourne (Australia) based company allows people to sell different things, including startups and websites. One highlight of Flippa is that it works directly with Escrow.com. With that, you can run different transactions on the platform without any problem.
Shopify Exchange, launched in 2017, is Shopify’s online platform for buying and selling e-commerce. If your startup is a digital business running on Shopify, Exchange is the best platform to sell it.
One of its highlights is that it also works with Escrow.com to deliver secure transactions. Besides, Shopify Exchange also has a valuation tool that allows you to check and understand the exact value of your startup.
You can also sell your tech startup on IndieMaker. Unlike the two other platforms on this list, this marketplace only allows you to sell your SaaS startup, side-projects, and unused domains.
One unique thing about IndieMaker is that it offers sellers promotional listings. Besides, you can also get feedback from the platform’s community forum members regarding your listings.
Selling a failing tech startup is one of the best decisions that you can make. Interestingly, there are a host of marketplaces out there where you can list your business for quick sales. The three platforms mentioned above are open marketplaces. They guarantee a safe transaction and communication process between sellers and buyers.