tldr: Different buyers will value your company differently for different reasons, and understanding what specifically a buyer values will help you negotiate bet

tldr: Different buyers will value your company differently for different reasons, and understanding what specifically a buyer values will help you negotiate better. I suspect the members of the HN community who are at the point of selling their businesses understand this fairly well. At then end of the day, before someone within a buyer organization (which are typically larger, fairly structured companies) will have to put together a business case, and as with any business case, it will need to include financials, multiples, valuations, etc. - the CFO will have to be convinced it is a good deal. (Unless you are Facebook, Groupon, airbnb, etc. of course, but note that the majority of exits are not of this size and so valuations will not be as "frothy" (see slide #4 of Mark Suster’s recent presentation http://www.theequitykicker.com/2011/06/17/mark-suster-getting-funded-in-a-frothy-market/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheEquityKicker+%28The+Equity+Kicker%29 http://www.theequitykicker.com/2011/06/17/mark-suster-gettin... ) Most businesses sold in the US are not anywhere near as sexy as the latest "Tech Crunch reviewed" or YCombinator startup and the reasons for acquisitions tend to be less driven by speculation and therefore financials, multiples etc. will be more examined more carefully. So, understanding the multiples that exist in your industry is very important. If you are looking to sell your company, one of the best ways to ensure you are getting the best price is by going through a competitive auction process, which are typically led by an M & A firm or Investment Bank. (Boutique firms exist for smaller companies that have not yet achieved the oft desired "2 and 10"). Yes, they will take their cut, but typically you will get a higher price than if you shop it yourself to a few buyers who you think will be interested. Following the "market it yourself" approach may cause you to overlook a buyer who is not obvious to you, but who would be very interested in your business for reasons you never thought of and therefore would be willing to pay what it takes to acquire it. (I have experienced this first hand.) When all is said and done, your business is worth what someone is willing to pay for it. Going through a competitive auction, especially if marketed properly to large buyer audience, will ensure you get the highest price, regardless of the buyer’s motive for the acquisition, (which you could only speculate on anyway.)