Slashdot Mirror
Finding Someone To Manage Selling a Software Company?
rrrrw22 writes "My company has spent the last year developing a framework for creating games on Facebook, Myspace, and Twitter. While we had originally planned to release the product to the public and take a percentage of the revenue, we have realized that we can make more money by selling the application to a funded company entering the social gaming space. Our problem is we don't have many other contacts in the social gaming space and would like to find someone to manage selling the company for us (in exchange for a percentage of the sale.) Where can we go about finding someone with the skills and contacts to sell a product like this? What experiences have others had trying to sell a company that we can learn from?"
You didn't tell why you came to conclusion that you would make more money that way, and it seems you haven't tested the other possibility either. Why not? If it doesn't work, then sell it. It also gives more value for the platform.
Translated to truth from euphemism.
We started a company to try to get rich off the back of other websites. After investing all of our personal money we have realized that we will never get it back and we're tired of working 80+ hours a week for nothing and we know we will never make a dime.
We're looking for a sucker to do all the work to try to sell our craptastic software "company" that has never sold a single line of code and attempt to get some of our money back.
When you product is any good, buyers will come knocking. If it's not, then trying to find someone is a waste of time, keep on it until you have a good revenue and a decent customer base. Web 2.0 and .com were yesterday.
If you're a small self-funded company, this isn't really at the level of specialized firms or agents specializing in acquisitions. It sounds like you fit in to standard venture-capitalist funding, which is usually aimed at eventually being acquired anyway. Often the VC firm will handle trying to sell the firm to someone bigger, when they think they can do so. However, your guess that you can be bought for a nice sum right now may or may not be something the VCs you can find will agree with. You might have better odds if you have multiple scenarios, like what you could do with another 6-12 months of funding.
This is partly because VCs are already in the business of evaluating "is this company worth anything (now or potentially), and who is it worth something to?" Most larger companies are wary of just buying unknown small firms, because they have no real way of evaluating that--- it's more often a multi-tier thing where the un-funded firm gets funded by a VC initially, then a larger firm buys from the VC.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
My company has spent the last year developing a framework for creating games on Facebook, Myspace, and Twitter. While we had originally planned to release the product to the public and take a percent of the revenue, we have realized that we can make more money by selling the application to a funded company entering the social gaming space.
Sell it to the spammers, marketing research firms, and anyone without a conscience because the only way someone's paying for your product is if they think they'll realize a return on their investment. And right now, advertisements or leeching away people's personal data is the only way to make money in the "social gaming space". People without a conscience also tend to be cheap-asses, so I wouldn't expect to get much.
Also, for the above-mentioned economic reasons, I don't use facebook or myspace applications and most of the "personal" data on my profiles are outright lies or fabrications.
#fuckbeta #iamslashdot #dicemustdie
Release it and prove that users like what you have. Otherwise, I don't even know that your great platform/software does what you are saying it does. You want to make money out of your start-up but don't want to do the initial hard labor... it doesn't work that way.
What kind of games can you build on top of Twitter? You do realize that it's limited 140-character text strings, right? I'm not really sure there's a market for Hunt the Twumpus.
If you have to turn to "Ask Slashdot" for what's likely THE most important decision your business could make (sale), then you really have no business farming this out to someone you've just met.
Believe it or not, Slashdot is a rather poor place for high-level business strategy (I know! I thought slashdot knew everything!). I don't know much about selling a company, but I do know a little about risk. If you really don't have the skills internally to do this yourself, there's an ENORMOUS risk of looking outside the company to find someone with these skills. If you don't have the skills to do this yourself, how are you going to know who's qualified to make such a big decision? How are you going to know if they're doing a good job? Put into simple terms, what's your expected gain in value from selling the company vs. selling your product? Now think about that in terms of hiring the wrong sales guy.
The thing is, you can always sell the company later. If you've demonstrated a viable sales strategy, your company is going to be that much more easy to sell, and worth more money.
AccountKiller
Given that you state you don't have the "contacts in the social gaming space", and since you basically state you don't have the expertise in-house to manage the sale - how exactly did you manage to determine that you "can make more money by selling the application to a funded company entering the social gaming space"?
I am guessing the phrase "we have realized that" in your submission should be replaced by "we're hoping that". I will also speculate that you attempted to follow your first plan - releasing the product to the public - and didn't get any significant interest. If these two suppositions are true, I don't know that you're going to find a company willing to take this off your hands - most of those sorts lost their shirts nine or ten years ago.
#DeleteChrome
You mean Hacker News, right?
Linky:
http://news.ycombinator.com/
Anonymous tears are the most delicious.
Nerd rage is the funniest rage.
We've had severial successful games on the framework, so it is proven:
http://apps.facebook.com/thesummoning/
http://apps.facebook.com/hammerfall/
http://apps.facebook.com/bandbattle/
Total our games have about 6 million users.
We were saying we can't make money from trying to have normal people build games on it. To make good games on it you have to have an organized group of people (like we have done)
To actually get the deal going, start talking to people at companies you think might be good acquirers. Start with polite email, or better yet, get introduced through someone you know who respects your work. Good people to talk to would be founders, C-level people, or investors at the potential acquirer. You will probably get better milage from asking a question, like "do you know anyone who would be interested in our assets" rather than going directly to the point of "you should buy our assets for $XX" If you can't do the deal without a broker, I'd suggest talking to business students at undergrad or MBA levels, potentially someone who's focusing on M&A. You've got to match the scale of the deal, and the size of the upside for a broker with the expectations of the broker. If you are going to get sold for just a few thousand, do it yourself. If we are talking hundres of thousands, there are people who work in the center of your local major metropolitan area who specialize in these things. Get introduced to those people through your lawyer, or through a lawyer you know.
One goes to VCs if one wants an infusion of moderate to significant capital (hence the name), not if one is looking to sell the company in the short term.
>Most larger companies are wary of just buying unknown small firms
Larger companies are usually delighted to buy small companies that possess something they want (technology, IP, talent, access to key customers/markets, ...) that have straight-forward ownership structures and balance sheets.
It happens all of the time.
If they don't have to cough up big $$ to compensate VCs, all the better.
I've been there, done that, multiple times.
How much revenue do they generate?
AH!
Except the article was not much of an advertisement. It didn't even link to a website. Not that I blame the original poster for keeping this information close to his chest. After all, contact information, in this particular case, could be invaluable.
Apparently a random group of hackers has created a "framework" for making social games. They don't have any games that demonstrate the power of this framework, but it is an awesome framework nonetheless. After several man-years of work on this framework the hackers have decided that the best way to capitalize on their work is to sell their software to someone in the social gaming community that doesn't have a competing framework already. Since they don't know anyone in the social gaming community, much less someone in the social gaming community that is in need of an untested but still awesome game framework, they want to find a third party willing to sell their software on commission.
Yeah, I would want my name on that advertisement.
The link for the game "The Summoning" does NOT ask your permission to access your Facebook data. It just takes you straight to the character-selection screen. If you pull up that link while you have an active Facebook cookie in your browser, be sure to go into your "Application Settings" and remove it from the list of authorized applications, or else this fly-by-night (and obviously pretty desperate) company has full access to whatever data can be mined from your Facebook account.
The poster is going to have to find someone who has been through this and get referrals. Sorry, that means meeting people and using social skills. Emailing potential buyers probably won't help because if you don't know any people in the space, you also don't know how to communicate with them out of the blue; you'll probably put them off, if they read your message at all.
Get an attorney who has experience doing these types of deals, this has saved me from failed deals. The guy who did Daddy & Mommy's will or plays golf with Uncle Barney or whatever isn't the way to go.
Trying to sell your company through one of the hundreds of business for sale websites brings tire kickers and scam replies. Going to the local business brokerage franchise (basically a bunch of commission-only out-of-work real estate salesmen) is usually a dead end for this type of thing, they won't grasp what you are selling, but they will have free balloons for the kiddies.
Run and catch, run and catch, the lamb is caught in the blackberry patch.
I see this as a perfect example of people trying to base a business model on trying to convince people they need your product rather then making a product they already want.
I will state this as clearly as possible.
Your enterprise was doomed to failure before you even got started.
And another thing. You are trying to enter a field where MOST of your competitors are CROOKS. Do you really want to be associated with such a label as a "Social Network Game Producer" when those that already are seem to be jumping ship in an attempt salvage what little reputation they retain now the cat is out of the bag regarding the less then savory business practices they've used?
Count your losses, learn from your mistakes and move on. Soon, people will realize how seriously they are being used, excuse me...FUCKED OVER, by social networking sites and start abandoning them for something else to keep them entertained. You want to be in a position where they move on to YOU. You do not want to be the guy they are leaving in the dust.
Start thinking about what comes AFTER Social Networking sites, then work towards THAT. Well, at least if you want to make money.
To be honest, unless you have a successful and *popular* product that has a very high profit margin investors are unlikely to be interested in your software.
What angel investors and venture capitalists are really interested in is the team behind the company. They want to see a diverse group of people who have a decent probability of launching and growing the venture you are trying to sell. Unfortunately you are saying that the team most familiar with the venture wants to quit. Exiting the venture prior to having a popular product and subordinates who can immediately fill the original team's shoes creates a terrible impression.
--
Perpenso Calc for the Apple iPhone and iPod touch
Eh, I suspect you don't understand the area. It is perfectly clear what he means by it. If you have nothing meaningful to say, just don't.
Why would they give you $3M if they can get along with much less? Fail often, fail early, fail CHEAP is also true for VC. I know VC that don't have a lower limit. It depends on which stage they are focusing on. If you are going to a late stage investor/growth investor and ask for 50.000 US$ seed capital (yes, 50k!) they will laugh about you the same way as an early stage/seed investor will laugh about you when you ask for 100 Million for a late stage pharmaceutical start up.
I can give you my thoughts relative to having founded, grown, and eventually selling my company back in the 90's. I'll leave it up to you to decide how relevant all that is a little over a decade later. My company had a software product that eventually was sold internationally, with customers in 23 different countries. We had a staff of about a dozen engineers and an office assistant. We were entirely profitable, with a solid track record and a respected product. When it came time to sell, I found the people at the Corum Group to be invaluable. I'd suggest starting at their web site and moving forward from there. They are pricey, but the advice and guidance along the way proved to be worth it. Along the way, you'll probably hear a lot of things you don't want to hear, and will be asked to do a lot of things you don't want to do. Get over it. These guys know their stuff.
If they know really know enough about social networking to write a game authoring platform, they have enough sales people in their social networks to do this deal.
Alternatively, using said platform, write a game which appeals to sales people...
There are 1.1... kinds of people.
This isn't to to poster. Now that you've got the word out, you might find a buyer.
Everyone else: stop telling these people they can't do it, and are idiots for asking. They are smarter than you as they have got 50,000-60,000 people who are now aware of what they have. Also, no one has a freaking clue the first time you sell a company, and often after selling a few. Why? BECAUSE THERE ARE VERY FEW RULES. Just make sure you are getting paid in something that has real value and will continue to unitl your no-sell period ends. Having a lawyer is a give on deals like these.
-- $G
http://apps.facebook.com/thesummoning/
"Note: If you do not see buttons for Male/Female, please disable adblock."
Looks like I won't be your 6,000,001 user.
There is a company based out of Winnipeg, Canada named Acumen Corporate Development Inc. that is quite good at this sort of thing. They do Acquisition Management/Support and other corporate services for this sort of thing.
It seems that others might be interested in any revenue that is generated
http://mercuralis.deviantart.com/journal/23000665/
It's quite possible to sell a company that just has a technology and a demo, but the timing has to be right Vermeer, which became Microsoft Front Page, sold only 400 copies before Microsoft bought them. They, though, had a working product at the right time.
You need something to sell. You need at least one of revenue, intellectual property, market share, or lead time. Preferably more than one of the above. All Vermeer had was lead time; anyone could write an HTML editor, but they happened to have one at the right time. This is unusual. Usually you need something more than that.
If they're anywhere near Silicon Valley, those guys should join SVASE, meet some venture capitalists, and learn how to pitch. Talking to VCs is useful, because everybody talks to them and they'll tell you who you should be talking to.