Ask HN: Can you sell small non-scaling startups?

Posted by steilpass on Wednesday September 14, 2011 @02:35AM
from the ask-hn dept.

When listening to PGs office hours at disrupt I once again heard this famous "looks like a nice business for an steady income but nothing which can scale". I remember hearing this myself and ignored that advice. And I think the reason was that I didn't want to give up the dream of selling my small non scaling startup. But maybe this relation is wrong. So can you sell small businesses? What are good advices since you probably don't have an existing network of investors?

( 8 comments | 10 points | on HN )

Re:Ask HN: Can you sell small non-scaling startups? by jnorthrop on Friday September 16, 2011 @03:14PM (#3005843)

I don't know what investor would be interested in a company with little growth opportunity. I've been involved in two business that were in that situation. I call it "survival mode." They both made enough money to stay in the black but neither had enough (or any) growth to invest in new ideas. In both cases the market wasn't as big as they thought it would be but didn't have enough cash to pivot.

A business like that doesn't have the promise of a return on the investment an investor is looking for.

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Re:Ask HN: Can you sell small non-scaling startups? by parallel on Wednesday September 14, 2011 @03:59AM (#2995313)

A company that has no growth potential is not very exciting to an investor. They 'make bets' on companies they think might take off. It's high risk high return as most small companies fail.

I think investor won't be interested in buying a business for small scale steady income. There are plenty of very safe ways to do that like bluechip shares or even term deposits.

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Re:Ask HN: Can you sell small non-scaling startups? by mattgratt on Friday September 16, 2011 @03:33PM (#3005931)

There are a number of people who know what they're doing who buy smaller web companies. Typically they can network these together to get economies of scale around user acquisition and monetization.

Check out internet brands - http://www.internetbrands.com/ib/acquisitions

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Re:Ask HN: Can you sell small non-scaling startups? by danielh on Wednesday September 14, 2011 @04:12AM (#2995334)

Of course you can sell a small business, the question is at what price. If your potential for growth is limited, you won't get a Twitter-like valuation, but if your business is solid and profitable, someone might be willing to pay a couple times your earnings.

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Re:Ask HN: Can you sell small non-scaling startups? by steilpass on Wednesday September 14, 2011 @08:43AM (#2995999)

My question would be how to find that "someone". If I have investors they have probably an idea how to sell it.

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Re:Ask HN: Can you sell small non-scaling startups? by proexploit on Monday September 19, 2011 @10:11PM (#3015983)

Why not post here as a start? If it's a worthwhile real business with some degree of stability, you'll probably find some interest. "Small" might mean $100/mo, $1,000/mo, or $10,000/mo to you and those have very different valuations and ways to sell.

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Re:Ask HN: Can you sell small non-scaling startups? by eitland on Wednesday September 14, 2011 @03:48AM (#2995287)

Try "37 signals" first book, "Getting Real", freely available here: http://gettingreal.37signals.com/toc.php

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Re:Ask HN: Can you sell small non-scaling startups? by steilpass on Wednesday September 14, 2011 @08:45AM (#2996010)

Interesting that you reference that book. Can you point me to an chapter that relates to my question?

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