Start Up Blog

4 reasons they will buy your startup

Posted in entrepreneurship by Steve Sammartino on July 26, 2011

As far as I can tell their are 4 main reasons that a company will buy your startup. Particular in the web / tech fields:

  1. Talent buy out
  2. Technology buy out
  3. User buy out
  4. Revenue buy out

What’s interesting is that these buyouts happen in that order as well.

The reality is that it’s rare to be the focus of a talent buyout unless you and your team have an incredibly unique set of skills. The tech buy is less difficult and is the savior of many tech startups who have cool stuff with no revenue or customers. In fact, it’s rare enough that we should ignore it as a possibility.

The reality for you and me is that buy out 3 and 4 is where we are likely end up. So the question we must ask ourselves are these:

* If we are aiming for a user buyout, how long can we survive without revenue?

* If we are aiming for a revenue buyout, why don’t we just keep what we’ve built?

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2 Responses

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  1. Behind the Line said, on July 26, 2011 at 9:29 pm

    one of the reasons you might want a buyout is because you realise you have what it takes to start-up but you don’t have what it takes for on going day to day management once you’re out of start-up phase – serial entrepreneurs

    • Steve Sammartino said, on July 27, 2011 at 4:00 pm

      Yep, I’ve been guilty of that. I’m certain I’m better at starting and gaining momentum than I am at building something massive. I do like your outlook on challenging why we need to move into the managing area, rather than just focusing on the launching & building….

      Steve.


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