Ask HN: Tips for negotiating site sale

https://news.ycombinator.com/item?id=720844

by trickjarrett • 17 years ago

7 5 17 years ago

news.ycombinator.com

Tomorrow I am meeting with a potential buyer for my 2 year project. I've provided him with the traffic statistics since the first of the year, and he has been the long time sponsor of the site, so we have a previous standing relationship.

I've never negotiated a sale of my own project before. I've negotiated for higher salaries and benefits etc.

So what tips or advice can you all provide? Any tips on negotiating? Any advice on preparation I might have overlooked?

EinhornIsFinkle• 17 years ago

Here is a simple one but sometimes overlooked by 1st timers:

Don't negotiate from a cost-plus perspective. Forget about how much time, $, resources you put into the project.

Think about the sale from a value-add perspective. How much additional value will this add to your potential buyer? try to understand his/her motivation to buy, what's the plan, etc. They see a way the site can generate additional revenue; it's your job to find out how much.

Also, don't throw out a number unless you have a reason to. Some will disagree with me but that's just my style.

Thirdly, look for comparable sites that have sold recently to get a very rough ballpark # and try to get additional bids.

trickjarrett2• 17 years ago

Thanks, that's an excellent point I had not fully considered. On the drive into work I was thinking about the benefits the site gains him, and pondering how to translate that into the cost of the site.

viggity• 17 years ago

You can find comparable sites at flippa.com (formerly sitepoint.com/marketplace)

PS EinhornIsFinkle has got to be the funniest username I have ever seen. I've been laughing for the past 5 minutes. Now I wish I could change my username to "LacesOutDan".

joez• 17 years ago

It really determines what kind of relationship you wish to nurture. Are you going to continue to work under the sponsor after the sale?

The classic rule of negotiating is never be the first one to write come out with a number. If you come out with a reasonable first number, you could severely limit your gains. If you try to next level think it, you could get laughed out of the room. Sometimes negotiators write down offers at the same time down on a sheet a paper to resolve a situation in which no one will write down a first offer.

Use next level thinking once you start haggling. If the lowest you are willing to sell it for is 6M, and your initial offer was 10M then cutting reducing your second offer to 8M is too much. Choose something more arbitrary like 9.4M which makes the buyer think they are getting to close to your lowest point.

This also means you should know your lowest point. Another great rule of negotiations is to have a strong alternative. This means explore other avenues for a sale or have projections for where you can take your project in a few years and exit then. If you don't care about the relationship, a tactic to use is to simply lie that you have a competitor's offer. Well since you are meeting tomorrow, make a few phone calls in the morning and see if you can set up a meeting with another potential buyer. If you can convey that you are taking other meetings during the negotiation, it'll strengthen your position.

In the end, feel out the other person and trust your gut. Good luck!

trickjarrett2• 17 years ago

Currently we may work irregularly together, but I doubt we will take any extended projects together again. But who knows.

Thanks!

Ask HN: Tips for negotiating site sale

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