Talent hire ($1 million/dev as a rule of thumb in the valley need to readjust for your location) For example, your product can improve the buyer's margin by 1.0%, which is estimated at millions, or your startup product can increase sales by, say, 5%.īeyond the economic value there are multiple motivations for startup acquisitions ( source ): In the context of the above - the startup founder should focus on convincing the buyers that the synergies are enormous. You should try shifting the narrative from the stand-alone value of your startup to - what value is your startup providing the buyer? Firms will often claim that their startup acquisitions are strategic, which is just a way to justify a valuation that is beyond a financially justifiable reality. So typically parties come to the deal consideration (price) somewhere in the middle. For example, do you have other buyers? See my previous post how to try create FOMO and competition among buyers. It depends on how strong your position is. You on the other hand can try negotiating a deal price beyond the stand alone value - having the buyer share part of their synergies. Such as the startup's product helping the acquirer reduce their costs or increase their revenue, or improved reputation.Ĭonsideration = the buyer will not want to pay the total value that they can extract from the deal (Consideration+Value) - they would be just as well off not proceeding with the deal. Synergies = besides the stand alone value, the buyer sees additional benefits for their company - in the M&A world they are called synergies. Stand-alone enterprise value = what is the value of future cash flows that the business is likely to generate regardless of who owns the business. Otherwise, there is no rational point to buy. When a strategic startup buyer makes an acquisition offer (Consideration), they expect to extract additional value as a result of the acquisition. the egos of CEOs-that explains the higher rate of acquisition than when compared to their counterparts.Ĭonsideration + Value = Total Value. Malmendier, G.A.Tate, 2005 ) has found that it's excessive confidence-a.k.a. This is supported by research, in particular a study from Stanford University ( U.M. My conclusion - deals are rarely driven by the rational mind. I would help buy and sell companies, manage the sale process or determine the fair market value. Prior to building and eventually selling my startup, I had a 9 year career in mergers & acquisitions. You just need to be aware of how the buyer thinks and makes decisions on acquiring startups. But there is good news - you can significantly influence the exit price of your startup to your advantage. The market value for your startup that you plan to sell is what the market is willing to pay. It's pointless (especially if your startup has early traction). How do you know what is a good exit value for your startup?įirst of all, forget about asking financial analysts to assess the market value. Olatunji is the younger brother of KSI, another online personality who has transitioned to the world of boxing in recent years.So you are considering to sell your startup or have an offer on your table. He turned professional in August, scoring a TKO over another social media personality, Fousey. Olatunji lost three amateur bouts against social media stars, including a TKO loss to Jake Paul in August 2018. His most recent outing saw Mayweather knock out mixed martial artist Mikuru Asakura in September. After knocking out Japanese kickboxer Tenshin Nasukawa in the first round, Mayweather technically battled social media star Logan Paul and former boxer Don Moore to draws, but only because those bouts were not scored under American exhibition rules. Mayweather has dominated his exhibition opponents. The win over McGregor allowed Mayweather to retire with an incredible 50-0 record as a professional. The fight will be Mayweather's fifth exhibition bout since he retired from the professional ranks after defeating UFC star Conor McGregor in August 2017. Mayweather will face YouTuber Deji Olatunji from Coca-Cola Arena in Dubai. returns to the ring for yet another exhibition.
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