5-minute read
If you have a technology company that you have recently started or one you have had for a while as a small business, you may want to sell it. A lot of people make their living by starting companies and then selling them to larger companies and other interested investors. Technology is a particularly good industry in which to do that because it's growing and changing so rapidly. Nearly everyone wants to be involved in it.
But selling your technology company needs to be done the right way, so you can receive the highest valuation for it. It is not necessarily difficult to sell your company when you work with the right people. However, it is important to have plenty of knowledge about your company, the technology industry, and what your company is really going to be worth to an investor. Here's what you need to know.
Owning a Startup Company
Ownership of a startup company, especially in the technology sector, comes with quite a bit of hard work. Bringing this type of business to fruition generally does not happen overnight. While some people get very lucky and seem to just "fall into" this kind of business with great success, that is not the norm for most people in the industry. Instead, they work very hard for a long time. When selling a company that you have put a lot of effort into, there is a certain degree of care that needs to be taken.
Understanding the Fair Market Value of Technology
When you are looking at the accounting and valuations of your technology company and its components, you have to remember that your company is worth what the market will bear. That may not be what you would typically expect for its value, or even what you would like to get from it. Depending on the valuation you receive for your company, you may want to keep it for a longer period of time until its value is higher.
The fair market value of a technology company can change rapidly, depending on what the market is looking for and what kind of accounting information you can provide. The healthier your company appears to be, the more likely you will be to receive a reasonable value for it. That is why the right type of accounting is so important because it can be highly beneficial for a strong and accurate valuation.
The Factors Going Into Valuation
A number of factors go into the valuation of a technology company. The interest in the market is important but far from the only thing that matters. Additionally, how well the company is performing and how long it has been in business are going to play roles in whether it is valued higher or lower. Opportunities for technology companies in today's market are abundant, and a company that wants or needs a high valuation has to be innovative and have a lot to offer in order to be successful.
How to Sell a Technology Company
The best way to sell a technology company is to know its worth. Then you can reach out to investors and others who are able to buy the company and interested in what it has to offer. Knowing its value and how it stands up to the competition matters. If you are not sure how you measure up in the marketplace, you may be asking too much for your company or even selling it at a valuation that is lower than what you could get for it. You want a fair market price for you and for the buyer, as well.
Startup Acquisition Marketplaces
Among the easiest and safest ways to sell startup technology companies is through a marketplace that is specifically designed for these types of acquisitions. Companies and marketplaces such as Microacquire are popping up for small business acquisitions in the technology sector and other industries.
These marketplaces are free, and they're giving investors and others opportunities to purchase startups and other small technology companies on terms that work for everyone and with the fair market valuation. If you are looking to understand more about what your technology company may be worth on the open market, or you want to sell it, a startup acquisition marketplace may be the right choice for your needs.