5 ms·

Your numbers are low. They didn't buy a suburban lawn care business. I'd ballpark >$1m up front and >$250k annual comp with upside going forward, in some mix

by nugget 10y ago

Your numbers are low. They didn't buy a suburban lawn care business. I'd ballpark >$1m up front and >$250k annual comp with upside going forward, in some mix of cash and stock. Great move by Stripe. Congrats to Courtland for the exit and what seems like a win-win for both parties.

petercooper 10y ago
I'm not so sure. I haven't seen the higher big ticket multiples scale down to smaller businesses very well (only in the small biz media negotiations I've been involved in or tipped off about - so I am no expert!). I'd certainly take a 16x revenue multiple any day of the week though :-D
- zazpowered 10y ago
  They didn't buy the site really for the revenue so it's hard to go off of that when estimating acquisition price
- nugget 10y ago
  16x mature revenue, sure. But if revenue is growing 20% month over month, then what? I see pure talent acquisitions (no tech, no site, no brand) once a month for >$500k/head. Here the founder is a course 6 (CS) MIT grad, obviously smart and talented, able to act as an evangelist to broader communities, with a pre-built launchpad in place. There's real value to that. If the stock component vests over some period of years, it could easily run into the millions, and still be a steal by Stripe. I'll echo another comment downstream: it's interesting to think about whether, in the spirit of the site, they will (or should) reveal the economics of the deal.
sanswork 10y ago
No way it was >$1m. It's specifically because it's not a steady business like suburban lawn care that there is no way it is going for a 2-4x annual rev. It's definitely not going to go for more than that. I'm going to guess they got it for a song with a job for the owner and his brother attached and the promise that they could focus on content and not selling ads.
- skynode 10y ago
  Would be great to see some facts and numbers not more suburban lawn care anecdotes.
  - sanswork 10y ago
    Go on any website selling site like flippa or Latonas and you can see sales prices for lots of similar businesses with similar or higher revenue. Also the lawn care point wasn't an anecdote it was an example of a generally predictable and steady income stream business vs a blog like this which is neither.
    - zazpowered 10y ago
      Those sites don't include employees who will stay on the to run the company. You also don't think Stripe paid a premium over what the site would have fetched in a flippa sale?
      - sanswork 10y ago
        Right they had one employee who now has a regular salary working on something he enjoys as well as getting a job for his brother(who wasn't employed before by the site) means it's even less likely stripe is going to pay a huge multiple. They might have paid some premium but they aren't paying 150x when the going rate is <2x AND throw in a job for the brother.
bitmapbrother 10y ago
You're ballparking 1 million upfront and >250K for a site that made barely 60K a year? That seems extremely optimistic and emblematic of dot.bomb numbers.
- bbcbasic 10y ago
  By that logic YC and other VCs are continuously and systematically making bad investments every year. You need to look at it as the total value this will provide Stripe. It's a community of people who will buy their service. It's good will too.
  - BillyParadise 10y ago
    But what's the upside? Will this website EVER net Stripe a (figurative) DIME after paying 2 salaries? I think not. Maybe it will entice a few dozen new account signups per month. Who knows. Community outreach is a good thing (tm) but I see now way any sane/experienced business person would pay a million dollars for this.
brentm 10y ago
No way. A blog like IH is an internet business but it's still a small business and much closer to the suburban lawn car business you mention than something like Stripe. There is no big scale for something like IH in the future without it being reinvented. It would not command a multiple of 15x+. Stripe would need to justify the purchase price to their board. If you were running a company bringing in $72k a year and it was a total schlep dealing with the day to day and then also selling ads being able to sell to a great company for 1-4x + a good salary for you + 1 is an awesome outcome.

by nugget 10y ago

petercooper 10y ago

I'm not so sure. I haven't seen the higher big ticket multiples scale down to smaller businesses very well (only in the small biz media negotiations I've been involved in or tipped off about - so I am no expert!). I'd certainly take a 16x revenue multiple any day of the week though :-D

zazpowered 10y ago
They didn't buy the site really for the revenue so it's hard to go off of that when estimating acquisition price
nugget 10y ago
16x mature revenue, sure. But if revenue is growing 20% month over month, then what? I see pure talent acquisitions (no tech, no site, no brand) once a month for >$500k/head. Here the founder is a course 6 (CS) MIT grad, obviously smart and talented, able to act as an evangelist to broader communities, with a pre-built launchpad in place. There's real value to that. If the stock component vests over some period of years, it could easily run into the millions, and still be a steal by Stripe. I'll echo another comment downstream: it's interesting to think about whether, in the spirit of the site, they will (or should) reveal the economics of the deal.

sanswork 10y ago

No way it was >$1m. It's specifically because it's not a steady business like suburban lawn care that there is no way it is going for a 2-4x annual rev. It's definitely not going to go for more than that. I'm going to guess they got it for a song with a job for the owner and his brother attached and the promise that they could focus on content and not selling ads.

skynode 10y ago
Would be great to see some facts and numbers not more suburban lawn care anecdotes.
- sanswork 10y ago
  Go on any website selling site like flippa or Latonas and you can see sales prices for lots of similar businesses with similar or higher revenue. Also the lawn care point wasn't an anecdote it was an example of a generally predictable and steady income stream business vs a blog like this which is neither.
  - zazpowered 10y ago
    Those sites don't include employees who will stay on the to run the company. You also don't think Stripe paid a premium over what the site would have fetched in a flippa sale?
    - sanswork 10y ago
      Right they had one employee who now has a regular salary working on something he enjoys as well as getting a job for his brother(who wasn't employed before by the site) means it's even less likely stripe is going to pay a huge multiple. They might have paid some premium but they aren't paying 150x when the going rate is <2x AND throw in a job for the brother.

bitmapbrother 10y ago

You're ballparking 1 million upfront and >250K for a site that made barely 60K a year? That seems extremely optimistic and emblematic of dot.bomb numbers.

bbcbasic 10y ago
By that logic YC and other VCs are continuously and systematically making bad investments every year. You need to look at it as the total value this will provide Stripe. It's a community of people who will buy their service. It's good will too.
- BillyParadise 10y ago
  But what's the upside? Will this website EVER net Stripe a (figurative) DIME after paying 2 salaries? I think not. Maybe it will entice a few dozen new account signups per month. Who knows. Community outreach is a good thing (tm) but I see now way any sane/experienced business person would pay a million dollars for this.

brentm 10y ago

No way. A blog like IH is an internet business but it's still a small business and much closer to the suburban lawn car business you mention than something like Stripe. There is no big scale for something like IH in the future without it being reinvented. It would not command a multiple of 15x+. Stripe would need to justify the purchase price to their board. If you were running a company bringing in $72k a year and it was a total schlep dealing with the day to day and then also selling ads being able to sell to a great company for 1-4x + a good salary for you + 1 is an awesome outcome.