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Ask HN: Selling to a Co-Founder
We started our software consultancy business four years ago, and there were three founders. One of them has now offered to buy the shareholding of myself and the third founder.
My question is: does anyone have any idea of how to value those shares? The company has no physical assets, so my initial thinking is that it would be based on potential earnings over the next x months or years, also maybe taking into account current turnover.
- caw 13y agoI think what you're looking for is sale of a partnership. The company may not be structured the same as how a doctor or law office does it, but valuing something with limited physical assets would be a similar methodology.
- deleted 13y ago[deleted]
- staunch 13y agoSee if you can do something simple, like divide and choose: https://en.wikipedia.org/wiki/Divide_and_choose https://en.wikipedia.org/wiki/Divide_and_choose
- chadkruse 13y agoAt the risk of making it more complicated than it needs to be: http://www.slideshare.net/tonyrice/consulting-company-valuation-model http://www.slideshare.net/tonyrice/consulting-company-valuat... The phrase you're googling for is some combination of the following: software consultancy acquisition multiples