Listen "What's my Startup Worth in an Acquisition?"
Episode Synopsis
In this episode of the Startup Therapy Podcast, Ryan Rutan and Startups.com founder Will Schroter discuss the unrealistic expectations that many startup founders have when it comes to selling their business. They detail the common pitfalls and misconceptions about startup valuation, the differences between raising capital and selling, the realities of private equity, and the dangers of deferred compensation. With insights from their own experiences of buying and selling companies, Ryan and Will provide a candid look at how to navigate the tricky world of startup acquisitions and set more realistic expectations for exit strategies.Sign up for the Startups Newsletterhttps://www.startups.com/newsletterResources:Startup Therapy Podcast https://www.startups.com/community/startup-therapyWebsitehttps://www.startups.com/beginLinkedIn https://www.linkedin.com/company/startups-co/Join our Network of Top Founders Wil Schroterhttps://www.linkedin.com/in/wilschroter/Ryan Rutanhttps://www.linkedin.com/in/ryan-rutan/What to listen for00:00 Introduction to Startup Acquisitions00:16 Realistic Expectations in Business Sales01:09 Understanding the Acquisition Process01:37 Our Acquisition Experience02:29 Challenges in Closing Deals04:31 The Importance of Direct Communication07:08 The White Knight Fallacy13:07 Investor Expectations vs. Reality20:35 The Figma Acquisition: A Case Study21:12 Understanding Market Leadership and Valuation21:44 The Reality of Acquisition Multiples24:53 The Spectrum of Potential Buyers26:07 Private Equity: The Predatory Buyer28:32 The Harsh Truths of Selling a Startup32:53 Cash vs. Deferred Compensation39:15 Managing Expectations in Startup Exits
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