Ask HN: Preparing a SaaS for Sale

https://news.ycombinator.com/item?id=39405805

by ativzzz • 2 years ago

4 5 2 years ago

news.ycombinator.com

The owner of a startup I worked at a while ago that I have some equity in is considering selling the business sometime soon

It's a SaaS on heroku that hasn't really been updated in 5 years. It's not deployable (without dirty hacks). I know the CI is red. Runs on old versions of software that don't get security updates anymore and aren't supported by heroku, etc

From a purely tech perspective (not business/sales perspective), is there anything that is worth doing to get the business to sell more easily or for a higher price? Or does the tech side not matter at all and it's all sales/revenue/customers?

edmundsauto• 2 years ago

Bad tech can impact or even tank deals, but it's not a primary determination. I suggest thinking what you would check, if asked to do due diligence on a 3P site, and figuring out where to put any efforts. For example, if your CI is red, is it actually an asset or just more noise/complexity?

mikasa71• 2 years ago

No. No one is buying the company for the tech. It is for the revenue and customers. Don't waste your time. If anyone ever complains, tell them you guys will fix it.

lulznews• 2 years ago

No one cares about the tech.

bruce511• 2 years ago

It depends on why the buyer is buying it. There are really only a couple reasons businesses get sold;

A) for the customer base. This us when the buyer is a competitor. Acquiring you is just a step to converting your customers to their product.

The value will depend largely on how many -customers- you have (people who give you money) versus -users- (people who -gave- you money once, or never).

B) for future profit. The seller is selling something that generates cash, the buyer offers some multiple of that cash up front. The buyer may have plans to increase the cash, the seller takes less cash now, but equally gets time back.

In this scenario improving the tech -may- result it a better price, (but probably wont). What it may do though is widen the buyer pool. Getting the product right is easier for you than them, and uplifting it may make it more desirable.

On the one hand painting the house makes it sell for more, on the other it matters little if the house is being demolished anyway.

In other words the answer to your question is that you need to know who you are selling to (what market) and what they are buying.

leros• 2 years ago

Make yourself know to the buyer. They might contract you for future fixes.

I helped work on a startup a few years ago that changed ownership. Like you're saying, documentation wasn't great. After hiring devs to work on it that couldn't make any progress, they hired me to make some emergency changes. I also offered to improve their documentation and setup a proper release process so that other developers could work on it.

Ask HN: Preparing a SaaS for Sale

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