You’re thinking about selling at one of the lowest points as far as valuations go in the past 20 years. Whoever the buyers are they are likely financing the deal and paying extremely high interest rates. If you can hold on for a couple of years and keep growing the business the multiples are going to increase and you could have a substantially different outcome.
I sold my company five years after getting my first LOI and the valuation went from just about where you are to 8 figures. It was VERY hard to turn down those initial offers, and I looked at 16 different LOIs over the years and had one deal I signed that fell through, but I’m so happy I didn’t cash out earlier on.
If you have 3 buyers chasing you now there will be more in the future and the existing ones will still be there especially if they are PE backed. Tell them you’re humbled by their offers now but you want to put your head down for 18 months and get the business to a more valuable asset. They will still be there if you hit that growth.
Also dig into the deal mechanics more. How are they financing the cash? Are you rolling over equity? How much leverage are they putting into the new company? Go listen to Built to Sell podcast and see if there are any founders on there in your vertical. I built my exit playbook off of podcasts by founders in my industry that had done podcasts talking about their exits and directly talking to them, and even did my deal with a PE firm that bought one of their companies.
If you’re desperate and miserable sell, and a million dollars is going to improve your life but you’re still going to have to go work for someone and get a job which is very hard to do after working for yourself for five years. It’s definitely not enough to retire on and you’ll be back in the rat race you left to start the company in the first place.
You’re thinking about selling at one of the lowest points as far as valuations go in the past 20 years. Whoever the buyers are they are likely financing the deal and paying extremely high interest rates. If you can hold on for a couple of years and keep growing the business the multiples are going to increase and you could have a substantially different outcome.
I sold my company five years after getting my first LOI and the valuation went from just about where you are to 8 figures. It was VERY hard to turn down those initial offers, and I looked at 16 different LOIs over the years and had one deal I signed that fell through, but I’m so happy I didn’t cash out earlier on.
If you have 3 buyers chasing you now there will be more in the future and the existing ones will still be there especially if they are PE backed. Tell them you’re humbled by their offers now but you want to put your head down for 18 months and get the business to a more valuable asset. They will still be there if you hit that growth.
Also dig into the deal mechanics more. How are they financing the cash? Are you rolling over equity? How much leverage are they putting into the new company? Go listen to Built to Sell podcast and see if there are any founders on there in your vertical. I built my exit playbook off of podcasts by founders in my industry that had done podcasts talking about their exits and directly talking to them, and even did my deal with a PE firm that bought one of their companies.
If you’re desperate and miserable sell, and a million dollars is going to improve your life but you’re still going to have to go work for someone and get a job which is very hard to do after working for yourself for five years. It’s definitely not enough to retire on and you’ll be back in the rat race you left to start the company in the first place.