How To

5 Practical Tips On How To Sell A Startup

Published

10 years ago

February 3, 2017

Planning to sell your startup company might be the toughest thing than setting up a startup. The road to acquisition can be difficult but it is not impossible. Most of the times startups are established only to sell them to larger companies for a decent profit.

Here we discuss 5 such practical steps which might be helpful while making a decision to sell your startup.

1) Have a clarity on what you own

There is a huge difference between you approaching someone and someone approaching you. Most startups are a complete mess. This creates plenty of doubt when the buyers are considering a deal with you. For a successful sale of your startup, get to know your buyer first. Plan yours acquires 18 months in advance of the sale. For selling a startup, you need an experienced attorney in order to have a perfect sale.

2) Being realistic always works

One should set realistic pricing expectations. If you are thinking to sell your business, it only indicates that your business might have stagnated or you lost interest in it and you want to move on. So, having realistic expectations and understanding the market often saves time. As a founder, you will always feel like you deserve the time and money you spent on your venture.
You can sell the whole project with all the assets at one go but many buyers will be asking you to continue working on it or provide minimum support for a certain period of time. So being realistic with your deals will always be appreciated.

3) Stage yourself and your companyYour business venture must be presentable before you show it to your buyers. Financial statements must be audited to ensure all the transactions are recorded correctly and standard GAAP (Generally Accepted Accounting Principles) have been followed.
Founders should ensure that their own interests are been protected in the company vesting and equity contracts.

4) Show Lucrative Figures

Buyers will always consider the long and short of things like risks, profits, growth and much more. When you decide to sell your startup, try to outline these things outlined for your buyers in order to grab the buyer’s attention, as it is quite common that buyers don’t waste much of their time listening to your proposals. So showcase the buyers only your lucrative figures.

5) Know the pace of the acquisition

Larger business often moves at a slow pace. So sell things which work in the long term plans. The first and foremost thing is to be patient enough to deal with these acquisitions. Give the buyers a proper growth plan so that they will see the investment you have put in your Startup company. So be sure your idea is grab worthy.