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We've this 3 year old, profitable startup going steady

  • We sell web templates and web apps
  • Last 12 month's gross sale is over $1 million with 75% profitability
  • Staff of 13 people working on site

I've decided to sell the company because..

  • Want to sell it when everything is going fine.
  • I am tired of running this one, losing passion ever so slowly.
  • I have some other ideas that I wish to explore

My question to you are..

  1. Where exactly do I find right buyer for this company? Is there any specific broker/companies that can help us find a buyer? Whom to approach?
  2. What kind of valuation we should expect for our business?
  3. Anything else I should be aware of / look after?

Any help in this regard would be greatly appreciated.

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I hope some of your staff is receiving profit, because if 13 people are salaried on 250K/year, that's very low. – JeffO Sep 22 '11 at 0:41

3 Answers

up vote 3 down vote

That would appear to be fairly profitable. Have you considered having someone else run it so that you have a steady income on the side while you pursue something else?

As for selling it:

  1. competitors - always potential buyers
  2. large sites specific to your niche - (assuming you specialize in something like wordpress, drupal, or some other cms)
  3. industry experts in your niche who may not have a strong monetization system

As for valuation:

  1. what is your niche? is it one that is growing or declining?
  2. why are you better/worse than the competition?
  3. is it scalable upwards or are you fairly plateaued?
  4. are revenues up last year or down from previous years?

Templates are an interesting item with themeforest being an obvious powerhouse - most people know to look their first or one of the specialty sites. I would try and figure out your chance at long term success before I was willing to invest (you know assuming I won the lotto). But, given the industry and the need for always fresh themes - I would probably want to pay 1.5x-2.5x. This is the reason I asked the other questions. Those questions frame understanding of the situation, but you may be better off keeping it and paying someone else to manage it.

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Thanks. 1.competitors are out of question as they'd invest that kind of money back in business and grow. 2. We are one of the large sites in our niche. 3. You mean like very popular magazine or similar sites? I doubt they'd have that kind of money with them. Valuation. 1. Yep, our niche is growing. 2. We have one specific edge where very few dare to go as its really challenging. 3. Kind of in middle. Our industry is growing but our biz has been progressing slowly than it should. 4. Revenues are up from previous years. We were hoping for 4x valuation. Are our expectations fair? – Net Entrepreneur Sep 21 '11 at 14:09
I'd love to offer you some more specific advice. Email me some info via my profile and I'll let you know what I think. – Chris Kluis Sep 21 '11 at 17:29
up vote 1 down vote

In addition to Chris' answer I'd suggest you check out the following:

  • Court large companies offering similar products
  • Online platform for mergers/acquistions- Axial Market
  • Independent online market for investing/trading stock- Second Market
  • Talk to "finders"- essentially matchmakers
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Thanks seth. Axial Market sounds interesting. More links/resources like that? – Net Entrepreneur Sep 21 '11 at 14:08
@Net Entrepreneur I believe it is the only company offering that specific service. – Seth Rogers Sep 21 '11 at 17:12
up vote 1 down vote

This is a great website to sell your websites https://flippa.com/sell i've seen websites sell for over a million dollars on here. If you click on Just Sold and sort by price you'll see current listings as of today which sold for 1.2 million

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