5 ms·
I did the life-ruining one as my previous startup. Then I did one that only turned out to be a nice business. The good project and the disaster both took abou
by benologist 10y ago
I did the life-ruining one as my previous startup. Then I did one that only turned out to be a nice business. The good project and the disaster both took about 3 years to build but the good project was always making money since week 1 cause it had to sustain me as I'd overextended myself in every way just trying to sustain the disaster.
After about 3 years trying and failing to make the good project earn a lot more money I wanted to do an exciting new startup. Having almost hit 6 digits that third year meant I couldn't just ignore the good project and let it atrophy but I didn't want to pursue an exciting new startup being anchored to the good project all the time. I decided to sell it.
With that decision all of the remaining work became about transitioning from 'code on my computer' to 'coherent and pleasant part time job for someone else to do well'. I replaced bash scripts and w/e other random crap with a web interface and gutted my code and dependencies so that the person they find on craigslist to add something in 2 years won't drown.
Now I'm completely free to work on my new startup and make something like a good salary while I do, someone else takes care of the nice business in 5 hours a week. Probably half of HN could pull that off with a side project or two. This is where patio11 and someone from feinternational.com described the difference between the good project and the nice business -
https://news.ycombinator.com/item?id=11347541 https://news.ycombinator.com/item?id=11347541
- Blackstone4 10y agoHow did you sell your side business? Just thinking aloud if I wanted to buy one
- deleted 10y ago[deleted]
- cdelb 10y agocheck out feinternational.com (OP mentioned them as well). I've been subscribed to their "Buyers list" for over a year and I've seen many nice saas businesses listed.
- tarr11 10y agoInteresting, the multiples are 3-4x profit on that site. Is that pretty standard for SaaS?
- cdelb 10y agoFrom what I can tell, yes - at least for businesses that aren't experiencing high growth rates. FE has written an excellent article on the subject: https://feinternational.com/blog/saas-metrics-how-to-value-saas-business/ https://feinternational.com/blog/saas-metrics-how-to-value-s...
- pc86 10y agoIt's the last quarter's numbers annualized to a year so if there's been a spike in the last quarter that isn't seen in prior financials that's a point for negotiating the price. And it's also based on discretionary income so that "profit" is not necessarily the actual profit the business took in. A lot of expenses are considered discretionary but probably have a positive ROI. So while 3-4x is normal (really 3-5x depending on the industry) the numbers on FEI tend to be a tad high but not unreasonably so.
- Blackstone4 10y agoWould you recommend looking any where else?
- Swizec 10y agoWhy not hire a VA for the 5 hours/week to run the less exciting business?
- prawn 10y agoLump sum from the sale. Or not interested in retaining the mental baggage of owning the business.
- benologist 10y agoCurrently paying someone to do the work and waiting and building a bit of evidence that it can now be successful without me before testing a sale.
- pc86 10y ago"Zero owner involvement" is generally a big selling point, particularly if the prospective buyer does have the time and can presumably speed up growth. Best of luck selling!
- the-dude 10y agoYou mean niche rather than Nice?
- deleted 10y ago[deleted]