How To Sell Your Startup

Step 0: Build Assets

Step 1: Decide to Sell

Step 2: Create A Target List

Step 3: Email Outreach

Step 4: Initial Conversation

  • Personal — Share your individual backgrounds, while emphasizing domain expertise
  • Vision — Express your vision for the market, and ask for the acquirer’s vision
  • Product — Describe your product, in the context of the acquirer’s vision
  • Brainstorm — Ideate with the acquirer on synergies between your products

Step 5: NDA

Step 6: Technical Deep Dive

Step 7: Business Deep Dive

  • Metrics — signups, customers, revenue, growth rate
  • Business — fundraising history, business model, patents
  • Product — features, roadmap
  • Org — team bios, expertise

Step 8: Q&A

Step 9: Verbal Offer

Step 10: Telling the Team

Step 11: Interviews

Step 12: Term Sheet

  • Waive & Release — a simple waiver to hire the team
  • Asset Purchase — an agreement to buy specific assets along with the team
  • Stock Purchase — an agreement to buy the company alongside the assets and team
  • Merger — an agreement to formally merge both companies into one entity

Step 13: Negotiation

Step 14: Due Diligence

  • Legal — articles, bylaws, cap table, msas, vendor agreements
  • Employees — offer letters, piia agreements, census data
  • Financials — balance sheets, p&l statements, tax returns
  • IP — patents, trademarks, open source code

Step 15: Definitive Agreement

Closing

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Bilal Mahmood

Bilal Mahmood

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Civil Servant & Entrepreneur Fighting for a Green New Deal | Housing | Universal Basic Income | Public Schools