Indeed, you’ll agree with me that starting up a business from scratch and making it successful is a pretty hard thing to do. According to Bill Gross, the founder of Idealab, doing just that requires five key factors; the business idea, a strong team, business model, funding from investors or families, and good timing. Most startups often find it very challenging to combine these components, so they end up failing.
As a startup owner, one of the best decisions you can make for a business that you feel is likely to fail is to sell it. Yes, one of the best times to sell the company is before it fails or runs out of funds. You need to understand that selling your startup doesn’t necessarily mean that you’ve forgotten, and instead, doing that could give you enough time and capital to pursue other projects.
Furthermore, there are several different marketplaces you can go to buy and sell online startup businesses. One of the most popular places to check for small e-commerce businesses is Flippa. Other marketplaces to sell your startup are BizBuySell, Shopify Exchange, FE International, Empire Flippers, and TransferSlot.
What are the pros and cons of selling a startup? Is there any marketplace out there to sell startups? What is the best way to get your startup ready to sell? These and more are the questions that you’ll find answers to as you read through the rest of this post.
What Are The Pros And Cons Of Selling Your Startup?
There’s this misconception that selling your startup business means you’ve failed. Well, that may be partially true, but you need to understand that it doesn’t always work that way. Many people sell their startups because of several different reasons; it could be because of their lack of funds, or the company is trying to make more money to pursue a new and profitable project.
So, what exactly are the advantages and disadvantages of selling your startup business in the marketplace?
Pros
There are several benefits attached to selling a startup business. One of them is that selling your startup could allow you to be a part of the business and help you generate enough money to pursue other projects simultaneously.
For instance, imagine you sign a deal that allows you to transfer the ownership of your startup to another person. There’s no denying that you’ll generate liquidity for yourself by doing that. In addition to that, the deal may also allow you to remain in business if you so wish. So, in this case, it’s a win for you, as you’ll get to invest your money in another profitable business.
Furthermore, selling your company could allow you to take advantage of opportunities in your industry. Here’s a good example; imagine only raising 10 million dollars in funding for your startup, but you have an opportunity to sell the startup for 425 million dollars. This high demand could be because of the overall economy and trends in your industry, and there’s a possibility that the market could go down over time.
Diversification of personal finances is another fantastic benefit that’s attached to selling your startup.
Cons
Although selling a startup often comes with some advantages, you need to understand that there are also drawbacks. One of the setbacks of marketing your startup is that it can take time to negotiate the sales.
Apart from that, you need also to understand that selling your business requires you to pay some legal fees and costs. Unfortunately, the legal charge could be pretty expensive. Another disadvantage of selling your business is that it’ll likely affect your employees in one way or the other, and they may end up losing their morale.
Is There Any Marketplace To Sell Startups?
So, you’ve decided to sell your startup but wondering if there’s any marketplace out there to help you sell it. The good news is there are tons of platforms that you can use to market your business.
As earlier mentioned, some of the famous marketplaces to sell your startup business include Flippa, BizBuySell, Shopify Exchange, FE International, Empire Flippers, and TransferSlot. So, let’s take them one at a time and see how choosing any of the platforms will help you get the best when selling your business.
- Flippa
Occupying the first spot on the list of best marketplaces to sell your digital startup business is Flippa. This platform allows you to sell several different things, such as small businesses, websites, apps, and domains.
Flippa, founded in 2009, is a San Francisco (USA) and Melbourne (Australia) based company. Initially, the company started with the sales of domains and mobile apps. As a seller, the platform will allow you to list every detail regarding your startup.
So, what makes Flippa a secure platform to sell your startup? First, the company works with Escrow.com. The benefit of that is you can always rest assured of a particular transaction on the platform. Apart from that, the platform also offers a business valuation tool; this will help you determine your startup’s value accurately.
- BizBuySell
Another reliable marketplace to sell your startup business is BizBuySell. The company, founded in 1996, has more than 65,000 businesses for sale listed annually on its platform. Furthermore, BizBuySell deals with several different types of companies on its platform. Some are business real estate, established businesses for sale, asset sales, and franchise opportunities.
As a startup owner looking to sell your company, BizBuySell is one of the best platforms that you can trust. First, it has a proven record of helping entrepreneurs sell their businesses as it has facilitated more than 100,000 successful sales since coming into the market. Apart from that, you’ll also get a good value for your startup when you use the platform.
- Shopify Exchange
Exchange is another great marketplace that you can trust for the sale of your startup. The company is known to be the best when it comes to buying and selling digital businesses running on the Shopify platform.
Furthermore, Exchange is powered by Shopify, one of the best eCommerce companies out there. With Exchange, you can always list information regarding your digital startup and find buyers that will pay you well.
Shopify Exchange is pretty much easy to use, which is why I’m recommending you the platform. Apart from that, the marketplace is also very secure to use. Messages between you and potential buyers are private, which is one of the many factors that influence a safe business deal.
That’s not all; Exchange also works with Escrow.com to provide you and all its visitors a secure transaction when buying and selling on the platform. Interestingly, the platform also offers a business valuation tool, allowing you to understand your startup’s value accurately. The only drawback of this platform, however, is that it only works with Shopify eCommerce businesses.
- Empire Flippers
Occupying the fourth spot on this list is Empire Flippers. This platform is known to be one of the best marketplaces that offer personalized selling and buying experiences.
“Empire Flippers” was founded in 2011 by Justin Cooke and Joseph Magnotti. Today, the company has improved and grown to become one of the biggest marketplaces in the world. The platform has performed more than 200 million dollars worth of buying and selling transactions since coming into the market a decade ago.
Furthermore, Empire Flippers have received several different awards for their accomplishments over the years. For instance, the platform received four Inc. 5000 Awards for being one of the fastest-growing companies in America.
- IndieMaker
Another marketplace that you can trust to sell your startup company is the IndieMaker. Currently, the community marketplace has more than 15,100 members.
As a startup business owner, IndieMaker will allow you to sell your online business. If you also have domains and side projects to sell, the platform will let you do that easily. All you need to do is list your business freely, add relevant information regarding the startup, and then promote the list in the company’s community forum.
Here are some of the benefits of selling your digital startup business on IndieMaker:
- The platform is pretty much secure.
- There’s a community forum to get feedback from members regards g your business.
- The platform offers its members promotional listings.
- FE International
Occupying the sixth spot on this list is FE International. The company, founded in 2010, has now grown to become one of the biggest marketplaces for selling large-scale digital businesses and startups. Currently, the platform has been able to achieve more than hundreds of millions in SaaS.
FE International is a trendy marketplace that has its headquarters located in New York. The company offers tons of unique features: the global network, which has over 500,000 pre-qualified online investors. The benefit of this offering is that the investors can always help you find the right buyer for your business.
That’s not all; on FE International, you’ll get a chance to make a private listing. During the sales process, this offering will help you protect your business interests.
- Digital Exits
Digital Exits is another marketplace that allows people to buy and sell their tech business at the right price. The company was founded in 2013 to provide a high-quality brokerage to entrepreneurs to sell their businesses.
Digital Exits is great for buying and selling large tech businesses because it has a team of advisors; they are always ready to help you maximize the value of your startup. That’s not all; with Digital Exits, you’ll always have a good marketing plan for your business, and you’ll get advisors that’ll help you manage your business’s sales from the beginning to the end.
- Website Closers
Website Closers is another marketplace that’ll allow you to buy and sell your online business quickly with confidence. The company has been in the marketplace business for over two decades. It has a proven record of helping business owners to sell several different companies, including solo ad sales, content development, and web design services.
Website Closers will offer you a good business valuation tool, and this will allow you to accurately determine the value of your business and get the best out of it. Apart from that, the platform also offers a free valuation consultation just for you.
- SideProjectors
Occupying the next spot on this list is SideProjectors. This is a marketplace that is known for selling and buying unfinished side-projects. So, in case you have a startup business that’s yet to reach completion, you can always sell it quickly and easily on this platform by just listing it.
Furthermore, SideProjectors offers deals with several different types of business, including SaaS, eCommerce, blog, mobile app, domain name, etc. When listing your business, the platform allows you to highlight your company’s information, including how the project was built, why you’re selling it, and how you feel the buyer can take the business project from you.
- TransferSlot
TransferSlot is a curated marketplace that allows people to sell their projects and get the best value from them. To sell on this platform, all you need to do is list your business, and to do that, you’ll have to fill in the basic information about your project.
Apart from offering a pretty easy listing for its buyers, TransferSlot also provides ease of use for its members. The company also ensures you enjoy a secure transaction when selling your business projects on the platform.
Conclusion
There are many reasons to consider selling your startup. One of the best is that it can be a rewarding experience for you and provide an opportunity for others to succeed where yours has ended. You may want to sell your company because it’s not making money, or there’s no future in the market, or maybe you need some cash flow badly but don’t know how else to get it without taking on debt.
This post concludes that there are many different ways to sell your startup. It would help find what works best for you and the company, but make sure it fits the brand image and mission statement.
Glossary
A potential acquirer (or buyer) is a company that would like to purchase the corporation that issued the stock. Selling shareholders typically want an offer from another company so they can sell their shares in one transaction instead of selling them in pieces over time.
A marketplace model is when a person or company can sell their goods and services to many people at one time. The beauty of a marketplace model is that you achieve scalability with your business, meaning that the more customers you get, the more profit potential there will be.
A revenue stream is the source of cash that a business has. Revenue can come into a company in several ways, such as product sales or service fees. The process for counting income is different for each type, and accounting professionals use specific methods to determine what deals should be counted together.
Qualified buyers can be a private company or a reputable investor or entrepreneur who have the means and intent to pay for a property promptly with ample resources. Qualified buyers have qualitative characteristics such as being in sound financial condition, careful decision-making skills, and intelligent investment strategies.
The Facebook marketplace is a social media platform where you can buy and sell goods right to your potential customer through online selling. The prospective buyer can find pretty much whatever they’re looking for in the online marketplace. The Facebook shop may include furniture, sporting equipment, music instruments – anything under the sun for the potential buyer.
Annual revenue is a single number that summarizes the total yearly sales of a business. Annual revenue is calculated by taking sales for the most recent 12 months and multiplying by four to get an annualized figure. It’s simple enough, but it gets more complicated to get yearly profit when dealing with multi-national businesses.
An eCommerce platform or eCommerce website is typically a software application that designs, sets up, and hosts an online retail marketplace website to create an eCommerce business.
A business broker is a person in commercial real estate who helps facilitate and connect buyers and sellers in exchanges of properties. Typically working for a big company for a monthly fee, business brokers are strategic buyers who will be skilled in market research, negotiation technique, marketing strategies, contract language, and legal aspects when entering into agreements for a purchase or sale.
Startup founders are people who come up with new ideas and turn them into products or services.
