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Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

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BreezeTree Software

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Patrick McKenzie
Bingo Card Creator

Selling to big guys

At which point it makes sense to ping big guys (MS, Google, etc) about selling product/company? Or relatively big guys (in your field) for that matter. Have you ever been approached by them? The question is not about selling product licenses to these guys.

I'm getting quite a few requests lately from small venture capitalists  (all coming from LinkedIn). Not sure if it is an indication that the time  has come and I can start "spamming"  Google, IBM and others.
Maksym Sherbinin Send private email
Wednesday, April 17, 2013
 
 
What, VCs want to give you funding or want to buy your company? It would seem odd to me if VCs wanted to buy your company.
Jason Swett Send private email
Wednesday, April 17, 2013
 
 
Funding of course. I'd sell company  in a heartbeat.
Maksym Sherbinin Send private email
Wednesday, April 17, 2013
 
 
> Funding of course. I'd sell company  in a heartbeat.

Not something I'd spread around in public forums when linking to your company and using your real name - any buyer will know you're a motivated seller.
Jonathan Matthews Send private email
Wednesday, April 17, 2013
 
 
I've had a couple folks in my niche and VCs contact me -- they've all said they're basically not interested until the company is hitting about $1.5 - $2 million in sales yearly.
Doug Send private email
Wednesday, April 17, 2013
 
 
"Funding of course"
Yup, they want enough control to squeeze you out when the business takes off, but won't buy the whole thing from you because  they don't have the business smarts or the work ethic to run it themselves.

VC's are just the illegitimate spawn of M&A divas from the early nineties.  Lazy, stupid con artists every one of them.

I know nothing about the inner workings of Google, IBM and Microsoft, but I would imagine a product manager has to make a business case for buying you out instead of developing a similar product themselves.  If there isn't a compelling reason to add your product line to theirs, I doubt if they are interested.  Are you currently taking business away from them? 

Perhaps you should approach direct competitors who are bigger, with a mature product line and a large established user base.  There is considerable risk of being led down a garden path so competitors can get a look at your financials and customer files, but there really aren't a lot of options out there.
Howard Ness Send private email
Thursday, April 18, 2013
 
 
@ Matthews
"Not something I'd spread around in public forums when linking to your company  - any buyer will know you're a motivated seller."

Unless...this is real intent here- now the potential buyer knows that there are other buyers.
alexandar Send private email
Thursday, April 18, 2013
 
 
Big guys will buy your company if they need you. You can not sell to them.

On the other hand, a good VC is interested, they can connect you with potential buyers. But then, you have to first sell them the story.
Team@QikTester Send private email
Thursday, April 18, 2013
 
 
+1 to Howard

Your best bet is to go after mature companies in a similar line of business. That what history shows. It seems to me Google, Yahoo, etc either buy things that attract massive traffic like utube or publicity stunts like yahoo's latest purchase from a teenager to make themselves look young again.
cn Send private email
Sunday, April 21, 2013
 
 
Unless you're in stealth mode, I think you should absolutely try to talk to potential buyers to at least let them know you exist. You can approach them by finding someone in their New Business Development department and asking about a possible teaming agreement. Big companies are constantly looking for partners in other markets to team with, or companies or technologies in similar markets to acquire, because that's the safest and quickest way for big corporations to grow.  I've found it's very easy to get them to talk to you, anyway. 

I sold my little company to a huge corporation in a similar market for enough to retire on. I first approached my much larger competitors and didn't get a good response, because none of them needed my product (everybody thinks their product is the best). The big company in the "similar" market was very interested though, because they felt with my product they could quickly get into my market, plus bring my "technology" into theirs. 

A lot of it though is just your sales presentation to the potential buyer. A good presentation to the lower BD people can snowball up the corporate chain until the top guys think it's the savior to their business and will do anything to buy you out. That's your goal, anyway, so put a lot of effort into your presentation (if not hire a specialist to do it).

VC guys approached me early on, but I think a lot of them are just trolls cold-calling anyone with "Owner" next to their name on LinkedIn or some mailing list, hoping to find a clueless or desperate business owner in their specialty. None of them knew anything about my business or market, they just seemed to want to know if I happened to need a million dollars to fulfill a $50 million order, for which they'd offer me that million for 90% of my company. That's the impression I got, anyway. 

I think VC's can be good in other cases, though, but I think you need to contact known and successful VC's instead of working with the bottom-feeders who cold-call you. A growing company can easily get in the "can't get more sales until I can hire more people; can't hire more people until I get more sales" trap, when no bank will give you a loan, and I suppose VC's can be used to jump-start that.
CC Send private email
Sunday, April 21, 2013
 
 
@CC  thanks for the encouraging reply.

I was looking for hands-on experience and maybe advice how to  approach potential buyers. One big-name company (in my area) already contacted me but I'd like to be more proactive.
Maksym Sherbinin Send private email
Monday, April 22, 2013
 
 
"I'd like to be more proactive"
There is an inverse relationship between how hard you try to sell your business and how much you get for your business.  Do you play poker?  Learn how to be a good poker player, that's the best advice I can give.

You can approach potential buyers with proposals for affiliated sales, joint ventures, tag on products, etc., which will accomplish two things, one, it gives you an opportunity to showcase the value of your company, and two, it allows for the exchange of information outside of the buying and selling poker game.
Howard Ness Send private email
Monday, April 22, 2013
 
 

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