Here are some things to consider when selling your startup.

Tips For Selling Your Startup

November 7, 2016 4:55 pm Published by Leave your thoughts

After several years of tense brainstorming sessions, late nights and unavoidable missteps, you've done it – your tech startup is a success.

Your idea has caught on, your brand has recognition and you are building a larger – and more loyal – client base. Growth is on the horizon, and those early investors who put so much faith in you are starting to see hints that a return might be in their future.

Now that you beat the odds, what will you do next? You could continue to build your company. Or, you could step away and pursue an entirely new idea. 

It's quite common for startup founders to sell their companies when they reach a certain size and find willing buyer. But it can be a challenge, especially for those who are new to the business. Here are some basic tips for founders who are looking to sell:

  • Unclutter Everything: You wouldn't want someone to walk into your office for an important meeting if the room was a complete mess. Likewise, you can't expect someone to buy your startup if your records are not in good order. As Entrepreneur notes, you need to make sure that all important financial documents are current, along with employment agreements and any outstanding deals. 
  • Don't Jump At The First Offer: If this is your first time selling a startup, it's easy to get excited about anyone offering you a significant sum of money. Just remember that your work was valuable, and don't be so quick to say yes. Leveraging potential acquirers against each other will not only improve the terms of the deal for you, but will also help you choose a buyer who has the best vision for the future of your company.
  • Offer Buyers A Growth Plan: An article on Inc.com suggests offering buyers a growth plan so they understand the investments you have already made and can visualize a roadmap for the future of your startups profitability. This will make the prospect of a purchase much more attractive.

Are you looking to start your own business in Arizona? The Law Offices of Donald W. Hudspeth, P.C., have years worth of experience guiding entrepreneurs through the formation of new businesses. Call us today to learn more.

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