How to Sell Your Startup for More Than It’s Worth

How to Sell Your Startup for More Than It’s Worth

So here’s the deal.

(See what I did there?)

At some point, if you start a company – you’re going to think about selling it…

… or maybe you don’t plan on selling it, but one day someone may show up and offer to buy it – that’s what happened to me.

Regardless, I want to help you make that process way easier so you can optimize the outcome and reduce the amount of time involved.

Having gone through the process 3 times for my own companies (and several other times for companies I’ve invested in), I’ve discovered 3 key strategies that can help you get the most out of the deal.

The key is to be proactive in your strategy…. even if you never plan on selling, it might make sense to spend some time over the next few years to build the right relationships to allow you to sell your startup for more than it’s worth.

It could be the highest leveraged time – from a cash ROI – that you’ll ever get :).

Watch this video to learn 3 key strategies for selling your startup :

Here’s what I go over:

  • Whitespace: How to figure out who would be a good fit to acquire you.
  • 21 People: Who are the right people to connect with? It usually comes down to 21 people in the world who will be involved in making this decision.
  • Teaching to Connect: The right approach to use when connecting with potential acquirers.

Leave me a comment below and tell me what you would do with the money if you sold your startup?

How would that impact your life? Your family? How would you spend your time if you didn’t need to work?

Love to hear from you in the comments.

Have an amazing day!

With gratitude,

Dan

  • http://mikebrcic.com/ Mike Brcic

    Great stuff, Dan!

    • http://twitter.com/danmartell Dan Martell

      @mikebrcic:disqus absolutely my pleasure!

      DM

  • Rodrigo Martinez

    Great video Dan, thank you! Wish there were more of us advocating for a successful exit because, as you pointed out, it can have a huge impact in our lives, family, community and beyond. Can you please elaborate on this: “Not because I was trying to build a company to sell, I actually don’t suggest you do that.”. My own experience was that precisely because I started my company with the intention of selling I created a business 3X bigger and exited in only 18 months (1/5 time of my 1st exit). Selling my first company taught me that if I wanted a REWARD (successful exit) for myself (again), I had to FIRST create value for my end users as well as for potential acquirers. This approach was instrumental in exiting in record time.

    • http://twitter.com/danmartell Dan Martell

      @disqus_D0IcPhTDLv:disqus, great question!

      What I mean by that is you should never build a company just to sell it… even though that’s what you did, I don’t believe it’s a great frame of mind to get into.

      I’ve seen 1000’s of founders approach their company like this, and the decisions they make won’t allow them to create long term value that will be a appreciated by the acquirer.

      If you were able to do that, cool… but not my default suggestion by any means.

      I believe you build a company to solve a problem you care about, to serve as many people, and create long term sustainable value.

      If you can do that while trying to exit, cool … but usually totally apposing concepts.

      Hope that helps explains my position.

      Congrats on the second exit! You seem like my kind of guy.

      DM

      • Rodrigo Martinez

        Thank you Dan for your reply. Given the similar results in terms of exits I think we are both on the same page here, but just using different wording.

        Yes, my ultimate goal is to build and sell successful startups, but I’ve learned that that is ONLY going to happen if I create REAL value (“long term sustainable value”) for my customers and fill in a “whitespace” (brilliant, congrats!) for potential acquirers.

        I then become obsessed to “solve a problem you care about, to serve as many people” as well as to fill that “whitespace” because if I achieve those two goals with excellence THEN my initial personal goal (build and sell successful startups) is a consequence, is a natural outcome.

        Maybe I’m just childish, act like a kid…perform better for others when there’s a reward attached. You should see what my kids are capable of doing when I tell them that their reward is a LEGO. 🙂

  • Ben van Duijn

    Thanx Dan!

    Point 1 was clear to me.. Point 2, I know I need to improve on.. 😉

    Point 3 was a clear eye-opener.. To start doing the teaching to connect in an early stage and believing that you can add value to these tankers is inspiring to me.. So thanx again!

    And what i’d do with the money..? Well probably step down for a couple of months and then see what new projects i’d like to commit too 😉

    • http://twitter.com/danmartell Dan Martell

      @benvanduijn:disqus, glad it helped… these were extracted from my experience, but as I’ve shared them with 100’s of startup founders one on one, they all had a similar reaction.

      Crazy to think there’s only 21 people in the world that are responsible for your company being bought for millions of dollars.

      Not that unreachable is it 🙂

      Glad I could help.

      DM

  • Rodney Frost

    Great nuggets Dan !
    As far as the targeting 21 etc, I found myself doing that as i created my business plan.
    I feel the quality and long term viability is there for my project, so i needed to target “who would be targeting me”.
    This included the copy-cats. I inadvertently came up with my 21 list. Now i need to begin Connecting and eventually Teaching

    Here’s the answer to your question: I’d begin my next start-up of course 🙂

    Regards

    Rodney Frost

  • Derek Smith

    Interesting advice…suggest re-thinking title though. I know a couple guys who have sold / selling to Twitter, Google, etc. And I’ve completed 100s of deals in non-tech space. Selling a business for what it “IS” worth, while supporting a successful integration and helping to ensure it’s accretive to the acquirer and meets their objectives…significantly enhances chances of an exit…and ultimately a 2nd exit to possibly the same buyer!

  • Shams Juma

    This is phenomenal! Thank you for helping frame “the exit” into design thinking. You covered the what, when, who and why brilliantly.

  • http://art-spark.org/ Kristine Maltrud

    Thanks for these great strategies Dan. Very helpful. What are your suggestions and strategies for meeting and engaging “the 21”? I’ve found that trying to connect via emails and social media not very successful. These folks are inundated. Meetings and conferences? Personal introductions (this can take a lot of time to acquire…)? Other suggestions? Thanks!

  • https://ContentMutual.com Joshua D. Tobkin

    @danmartell:disqus I’ve been a fan of your site (Clarity.fm) and content since I’ve discovered it. Congrats on the Acquisition btw!
    I’m a founder and CEO of a startup in SF called https://ContentMutual.com, I want to promote your content and maybe introduce the technology and platform we’ve created.

    We’re like the airbnb for content. Our technology is pretty awesome too. We’re definitely Thought Leaders in the Content Syndication and Digital Rights Management space. I’m sure you’re super busy but if you’d like to connect my direct email is [email protected].

    Best Regards,
    Jt

  • http://robertsaric.com/ Rob Saric

    Dan, good job with your startup advice video vignettes as of late. I’ve had one exit that was very much serendipitous and now i’m strategically thinking about how to position my current opportunities.

    One question. When is too early to signal to your targets? Obviously, the objective is to connect, educate and align … but I see the corp. dev courting process as very similar to closing investments. Timing and tempo are everything.

    Thanks,
    Rob

  • Darryl Hicks

    Great post as always Dan, love what you’re doing here … TONS of value. BOOM!

    Started on #1 and #2 intuitively, #3 makes total sense but I feel like I’m too isolated from most of the major players in the space we’re targeting. Any tips on how you reach out to these guys cold, even if you’re approaching them from the angle of “I’m here to help and teach you what we know…”?

    I’ve often thought that re-locating to San Fran, NYC, or some other major FinTech hub would lead to more serendipitous connections but that’s not an option for us right now. I’m sure we’ll figure it out but if you have any tips on how to connect with these people I’d love a fast forward button!

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