How much of my startup should I sell?

The general rule of thumb for angel/seed stage rounds is that founders should sell between 10\% and 20\% of the equity in the company.

What do most startups sell for?

According to the data, the average successful startup has raised $41 million in venture capital and exited for $242.9 million dollars since 2007. Among those that were acquired, Crunchbase reports startups raised an average of $29.4 million and sold for $155.5 million.

What is the difference between hardware and software sales?

Sales cycle is longer While physical products and hardware have a sales cycle that tends to coordinate with the price – less expensive products having short cycles and more expensive products having long cycles – the software sales pipeline is traditionally long whether the product cost is high or low.

How much should a company sell for?

A business will likely sell for two to four times seller’s discretionary earnings (SDE)range –the majority selling within the 2 to 3 range. In essence, if the annual cash flow is $200,000, the selling price will likely be between $400,000 and $600,000.

How do I sell my startup?

Pre-work before you start selling your startup

1. Make a list of all potential buyers. It is likely you want to contact companies who are in your vertical.
2. Make sure all P/L documents and finances are up to date. In my case, I wasted lot of time as I had not got this prepared.

How much does a tech startup sell for?

The vast majority of tech companies are sold for less than $100 million dollars. Raising a relatively small amount of money and selling a company for $100 million dollars should be celebrated. For most founders-turned-VCs, this was the definition of success when we sold our own companies.

Is software or hardware profitable?

Large hardware markets are also relatively larger in revenue than the corresponding “large” software markets, allowing market leaders to more fully utilize their profit and cost advantages over competitors, by spreading marketing costs over larger revenue bases.

What is hardware selling?

Hardware stores (in a number of countries, “shops”), sometimes known as DIY stores, sell household hardware for home improvement including: fasteners, building materials, hand tools, power tools, keys, locks, hinges, chains, plumbing supplies, electrical supplies, cleaning products, housewares, tools, utensils, paint.

How long does it take to sell a startup?

On average, it takes 6 to 10 years for a successful startup to get to a liquidity event depending on the business model and industry. The fact is, for every acquisition that makes the news, numerous others happen behind the scenes through private equity firms and brokers.