8 ms·

Very competitive, established and growing segment. Also, kind of big. Developer tools, basically. There are are at least 5 very big companies (revenues of $10mi

by savoy11 16y ago

Very competitive, established and growing segment. Also, kind of big. Developer tools, basically. There are are at least 5 very big companies (revenues of $10mil+) and hundreds of employees each, and like 100 small companies in this segment. It's a very hard and competitive field.

brudgers 16y ago
The big question is, "do you want to sell right now or hold out for FU money or have a lifestyle business?" Unless the answer is "We want to sell right now" then this exercise is a distraction...and a potential source of stress if you have 50:50 equity split. If you want to sell now, then what is your ideal outcome when the value to the purchaser: is your IP? your staff? elimination of competition? And more importantly, what is your partner's ideal outcome in each of these scenarios? Keep in mind that if your suitor's goal is to eliminate competition, just floating the idea of purchase can create enough chaos to cause a divorce. My best advice is to discuss what your company is worth to each of you first. As far as value goes, you're producing revenue of $100,000 per full-time employee. That doesn't leave much cash for a new owner so a valuation based on current revenue would not be favorable to you. From a revenue standpoint, you're basically a small business. If the compeitor sees the potential value is in the IP, the real question becomes, how much would it cost them to deliver competing functionality? That number may be a lot less than you would want to sell for. If the motivation is to bring you and/or your partner onboard, then you're back to do you really want to sell + do you really want to go work for those people? So the price is relative to the value you place on the company. Sorry there's no numbers. My best advice is to determine quickly if both of you even want to sell and get back to building your business until there's actually an offer to consider. Good luck.
- savoy11 16y ago
  Yes, thanks, I'll upvote that since it is spot on. You pretty much nailed all the issues we have. At this point we have chosen to just keep on. If we manage to sustain this type of progress for the next 2-3 years, things cannot go worse. All that potential buying thing puts an extra layer of problems, heavy discussions, waste of time, lawyers, etc. As far as out assets go - we might be very valuable since we bring a very successful open source project (site has 1.2M page view per month) + commercial products built on top of it. Just the name and open source site pointing to our competitors may bring them a lot of value alone. Our usage base (for the open source products) is also huge. The goodwill and IP are I believe quite expensive at this point. But we will just move on and keep going. Thanks a lot.

by savoy11 16y ago

brudgers 16y ago

The big question is, "do you want to sell right now or hold out for FU money or have a lifestyle business?" Unless the answer is "We want to sell right now" then this exercise is a distraction...and a potential source of stress if you have 50:50 equity split. If you want to sell now, then what is your ideal outcome when the value to the purchaser: is your IP? your staff? elimination of competition? And more importantly, what is your partner's ideal outcome in each of these scenarios? Keep in mind that if your suitor's goal is to eliminate competition, just floating the idea of purchase can create enough chaos to cause a divorce. My best advice is to discuss what your company is worth to each of you first. As far as value goes, you're producing revenue of $100,000 per full-time employee. That doesn't leave much cash for a new owner so a valuation based on current revenue would not be favorable to you. From a revenue standpoint, you're basically a small business. If the compeitor sees the potential value is in the IP, the real question becomes, how much would it cost them to deliver competing functionality? That number may be a lot less than you would want to sell for. If the motivation is to bring you and/or your partner onboard, then you're back to do you really want to sell + do you really want to go work for those people? So the price is relative to the value you place on the company. Sorry there's no numbers. My best advice is to determine quickly if both of you even want to sell and get back to building your business until there's actually an offer to consider. Good luck.

savoy11 16y ago
Yes, thanks, I'll upvote that since it is spot on. You pretty much nailed all the issues we have. At this point we have chosen to just keep on. If we manage to sustain this type of progress for the next 2-3 years, things cannot go worse. All that potential buying thing puts an extra layer of problems, heavy discussions, waste of time, lawyers, etc. As far as out assets go - we might be very valuable since we bring a very successful open source project (site has 1.2M page view per month) + commercial products built on top of it. Just the name and open source site pointing to our competitors may bring them a lot of value alone. Our usage base (for the open source products) is also huge. The goodwill and IP are I believe quite expensive at this point. But we will just move on and keep going. Thanks a lot.