Selling a startup is becoming a business of itself. Rather than raising money from investors, business owners are increasingly considering selling their new and rapidly growing startups for massive capital gains.
A rapidly growing startup can get purchased for far more than the initial investment used to start. Just look at the example of Trello being scooped up for 425 million after raising only 10 million in funding.
The key questions you should be asking yourself is when and why you should consider selling your startup. In this article, we’ll explore a few basic tips and hopefully help you get some massive capital gains from your growing startup.
Don’t Miss Your Shot At Selling Your Startup
If your startup is growing rapidly, it could be a good idea to look around for potential buyers. Cast an extremely wide net and watch the response you receive.
A rapidly growing company based on new and emerging technologies within the market usually receives a lot of attention and the offers should begin to roll in. It’s especially true to keep contact open with potential buyers if your market space is starting to be populated by competition.
If your startup was one of the first to fill that market niche, then selling before the competition becomes a problem is a smart way to gain capital from your growth. After all, nobody will be interested in buying a company whose product barely stands out against the competition, regardless of how quickly that company has grown. Don’t miss your shot to move on.
Be Hands On
Just like bringing investors on initially, a lot of the same tactics are used when cultivating potential buyers.
Dean Willocks Advisory recommends getting hands-on! Consider taking potential buyers out for dinner yourself and invest in friendships with buyers. By being present and working closely to woo potential buyers, you portray a strong sense of confidence. A potential buyer will be more likely to complete the sale with you than with a competitor who didn’t take the time to personally meet the buyer.
If the buyer’s decision comes down to a gut decision, make sure you’ve made their gut feel good to help their decision along!
What Do You Want?
When you started your business, you had a particular goal in mind. Regardless of what that goal is, you should ask yourself if that goal is better met by selling your startup to a larger company.
If you were looking to solve a particular problem, possibly selling your startup to a larger company will help solve that problem more effectively since the larger company may have better resources to help scale it.
It’s easy to get lost in the notion that a business should be yours simply because you started it. Instead of getting locked in this way of thinking, consider the bigger picture and the problem that you wanted to solve when you started your business.
Sell Yourself The Dream
Anyone can appreciate being their own boss. In fact, most people would prefer to be their own boss. Selling your startup gives you the opportunity to become your own boss. This is especially true when you consider that after selling your business for a healthy sum of cash, you can then start a new business which is entirely your own rather than split between yourself and investors.
Are you in the position to consider selling your startup? Would you actually take that step and let your “dream” go away? Let us know what you think in the comment section below.