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Finding Someone To Manage Selling a Software Company? 165

Posted by timothy
from the ignorance-not-bliss dept.
rrrrw22 writes "My company has spent the last year developing a framework for creating games on Facebook, Myspace, and Twitter. While we had originally planned to release the product to the public and take a percentage of the revenue, we have realized that we can make more money by selling the application to a funded company entering the social gaming space. Our problem is we don't have many other contacts in the social gaming space and would like to find someone to manage selling the company for us (in exchange for a percentage of the sale.) Where can we go about finding someone with the skills and contacts to sell a product like this? What experiences have others had trying to sell a company that we can learn from?"
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Finding Someone To Manage Selling a Software Company?

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  • Why not (Score:4, Insightful)

    by sopssa (1498795) * <sopssa@email.com> on Saturday January 02, 2010 @04:50PM (#30626474) Journal

    You didn't tell why you came to conclusion that you would make more money that way, and it seems you haven't tested the other possibility either. Why not? If it doesn't work, then sell it. It also gives more value for the platform.

    • Re:Why not (Score:4, Insightful)

      by sznupi (719324) on Saturday January 02, 2010 @05:09PM (#30626676) Homepage

      Riding on hype in the right moment might make more money though.

      • Re: (Score:3, Insightful)

        by Gorobei (127755)

        Yeah, especially if you are selling a "framework" and not a game that works with some valuable infrastructure behind it.

        Find one of those guys who gets funding for "zero point energy" or some other voodoo. That's your only hope. Oh, an "Enterprise Java 5GL cloud-based compute fabric" salesdude might work too.

    • Re:Why not (Score:4, Insightful)

      by Anonymous Coward on Saturday January 02, 2010 @05:16PM (#30626742)

      I'd like him to consider dying.

      Well, not really dying, but just giving up.

      I HATE all these status updates for farmville or mobwars or whatever stupid game people are playing on these social media sites. Everyone has jumped on the social media band wagon, and lately, it's having these craptacular games.

      I don't care about a body in a trunk of a car, or a lonely pink cow, or lost ugly duckling. Stopping these dumb games from showing these retarded updates and wasting the time of people!

      Die social media games, dieeeeeeee!!!

    • Re:Why not (Score:5, Interesting)

      by Aladrin (926209) on Saturday January 02, 2010 @05:29PM (#30626832)

      I looked into writing a platform for Facebook games and decided that it was just too bloody easy to use something like the Zend framework with a little extra code on top and write a game that way. Writing an entire framework for Facebook games would be rather pointless, unless you marketed it to the 'wish they could program but can't' crowd, and then it would be really lame.
      I notice they say MySpace and Twitter as well, and that would make the framework tougher and a little more useful... But still not enough that I'd bother.

      So to answer your question, I suspect they have discovered that the amount of money available as a 'public' framework is nearly zero, and therefore selling it to another company would be a lot more profitable automatically.

      I actually wrote most of a very simple MafiaWars-style FB game just to experiment with how hard it was. It took me about 20-30 hours, including the time to research how to integrate with FB and learn something about Zend Framework that I didn't know yet, like authentication another 10 hours would have seen a working game, but I decided I didn't want a boring game, so I'm designing an interesting one and will put my time towards that instead, not that I have the basics clear.

    • Re: (Score:3, Insightful)

      by Arancaytar (966377)

      If it doesn't work, then sell it.

      ... if it doesn't work, it'll be too late to sell it. Or at least too late to sell it profitably.

      If someone offers you money for your lottery ticket, you can't wait to see if you win before selling.

  • by Anonymous Coward

    Advertize on Slashdot for free by couching it as an 'article'?

    • Re:Step 1 (Score:5, Funny)

      by Jason Earl (1894) on Saturday January 02, 2010 @06:08PM (#30627182) Homepage Journal

      Except the article was not much of an advertisement. It didn't even link to a website. Not that I blame the original poster for keeping this information close to his chest. After all, contact information, in this particular case, could be invaluable.

      Apparently a random group of hackers has created a "framework" for making social games. They don't have any games that demonstrate the power of this framework, but it is an awesome framework nonetheless. After several man-years of work on this framework the hackers have decided that the best way to capitalize on their work is to sell their software to someone in the social gaming community that doesn't have a competing framework already. Since they don't know anyone in the social gaming community, much less someone in the social gaming community that is in need of an untested but still awesome game framework, they want to find a third party willing to sell their software on commission.

      Yeah, I would want my name on that advertisement.

      • Easy (Score:2, Interesting)

        by Magic5Ball (188725)

        If they know really know enough about social networking to write a game authoring platform, they have enough sales people in their social networks to do this deal.

        Alternatively, using said platform, write a game which appeals to sales people...

    • by JWSmythe (446288)

          You should try running an online news source. The crap we get ranges from blatant ads, to things resembling news stories that are really ads. All of those get deleted. We've never run them. Still, we get them in all the time.

  • by Anonymous Coward on Saturday January 02, 2010 @04:55PM (#30626538)

    Translated to truth from euphemism.

    We started a company to try to get rich off the back of other websites. After investing all of our personal money we have realized that we will never get it back and we're tired of working 80+ hours a week for nothing and we know we will never make a dime.

    We're looking for a sucker to do all the work to try to sell our craptastic software "company" that has never sold a single line of code and attempt to get some of our money back.

  • When you product is any good, buyers will come knocking. If it's not, then trying to find someone is a waste of time, keep on it until you have a good revenue and a decent customer base. Web 2.0 and .com were yesterday.
  • by Trepidity (597) <delirium-slashdot@@@hackish...org> on Saturday January 02, 2010 @04:58PM (#30626568)

    If you're a small self-funded company, this isn't really at the level of specialized firms or agents specializing in acquisitions. It sounds like you fit in to standard venture-capitalist funding, which is usually aimed at eventually being acquired anyway. Often the VC firm will handle trying to sell the firm to someone bigger, when they think they can do so. However, your guess that you can be bought for a nice sum right now may or may not be something the VCs you can find will agree with. You might have better odds if you have multiple scenarios, like what you could do with another 6-12 months of funding.

    This is partly because VCs are already in the business of evaluating "is this company worth anything (now or potentially), and who is it worth something to?" Most larger companies are wary of just buying unknown small firms, because they have no real way of evaluating that--- it's more often a multi-tier thing where the un-funded firm gets funded by a VC initially, then a larger firm buys from the VC.

    • by castoridae (453809) on Saturday January 02, 2010 @05:15PM (#30626734)

      Yes, in principal. But that's not pragmatic - this sounds way too small to interest VCs these days. Speaking from experience, they aren't going to give you the time of day unless you're asking for at least $3M, and ideally more like $5-10M.

      I'd suggest local angels (individuals, not angel groups which often think they are VCs and act similarly) if you want, say, $100K-$1M, and friends-and-family or revenue (can be from random consulting while the product ramps up) for less than that.

      • That is not true. (Score:2, Informative)

        by yooy (1146753)
        Why would they give you $3M if they can get along with much less? Fail often, fail early, fail CHEAP is also true for VC. I know VC that don't have a lower limit. It depends on which stage they are focusing on. If you are going to a late stage investor/growth investor and ask for 50.000 US$ seed capital (yes, 50k!) they will laugh about you the same way as an early stage/seed investor will laugh about you when you ask for 100 Million for a late stage pharmaceutical start up.
        • I'll stand by my generalization. Less than $3M = less possible revenue for the same multiplier. In their minds, why bother when they could spend the same amount of effort to do a $10M deal?

          I'm sure there are exceptions, but this is the rule in today's VC market.

    • Err, no. (Score:3, Interesting)

      by Anonymous Coward

      One goes to VCs if one wants an infusion of moderate to significant capital (hence the name), not if one is looking to sell the company in the short term.

      >Most larger companies are wary of just buying unknown small firms

      Larger companies are usually delighted to buy small companies that possess something they want (technology, IP, talent, access to key customers/markets, ...) that have straight-forward ownership structures and balance sheets.
      It happens all of the time.
      If they don't have to cough up big $$

  • Evil purposes (Score:3, Insightful)

    by girlintraining (1395911) on Saturday January 02, 2010 @05:01PM (#30626602)

    My company has spent the last year developing a framework for creating games on Facebook, Myspace, and Twitter. While we had originally planned to release the product to the public and take a percent of the revenue, we have realized that we can make more money by selling the application to a funded company entering the social gaming space.

    Sell it to the spammers, marketing research firms, and anyone without a conscience because the only way someone's paying for your product is if they think they'll realize a return on their investment. And right now, advertisements or leeching away people's personal data is the only way to make money in the "social gaming space". People without a conscience also tend to be cheap-asses, so I wouldn't expect to get much.

    Also, for the above-mentioned economic reasons, I don't use facebook or myspace applications and most of the "personal" data on my profiles are outright lies or fabrications.

  • by warrior_s (881715) <kindle3@[ ]il.com ['gma' in gap]> on Saturday January 02, 2010 @05:10PM (#30626692) Homepage Journal
    Release it and prove that users like what you have. Otherwise, I don't even know that your great platform/software does what you are saying it does. You want to make money out of your start-up but don't want to do the initial hard labor... it doesn't work that way.
    • by rrrrw22 (231117) on Saturday January 02, 2010 @05:29PM (#30626830)

      Its out in public now at http://www.appainter.com/

      • Re: (Score:2, Insightful)

        by Anonymous Coward
        start interviewing elsewhere, because you aren't selling that.
        • by Trepidity (597)

          I dunno, it seems to successfully automate the creation of Zynga-style games, at least, which is a less unpromising avenue, revenue-wise, than much other stuff in the current snake-oil frenzy of Facebook gaming.

      • Re: (Score:3, Interesting)

        by LostCluster (625375) *

        Hmm... you seem to have come to the wrong place for advice.

        Why is somebody going to learn your framework and let you host it and maybe send them profits when somebody can learn a real web scripting language or two, and then host on one of the many hosting companies out there?

        Think of yourself as a contestant on Shark Tank (called Dragon's Den on the BBC)... why are people who have money willing to give you money when you have such a hard time convincing people to partner with you?

  • Seriously? (Score:3, Funny)

    by bahamat (187909) on Saturday January 02, 2010 @05:17PM (#30626750) Homepage
    What kind of games can you build on top of Twitter? You do realize that it's limited 140-character text strings, right? I'm not really sure there's a market for Hunt the Twumpus.
  • Foolhardy. (Score:5, Insightful)

    by Vellmont (569020) on Saturday January 02, 2010 @05:18PM (#30626756) Homepage

    If you have to turn to "Ask Slashdot" for what's likely THE most important decision your business could make (sale), then you really have no business farming this out to someone you've just met.

    Believe it or not, Slashdot is a rather poor place for high-level business strategy (I know! I thought slashdot knew everything!). I don't know much about selling a company, but I do know a little about risk. If you really don't have the skills internally to do this yourself, there's an ENORMOUS risk of looking outside the company to find someone with these skills. If you don't have the skills to do this yourself, how are you going to know who's qualified to make such a big decision? How are you going to know if they're doing a good job? Put into simple terms, what's your expected gain in value from selling the company vs. selling your product? Now think about that in terms of hiring the wrong sales guy.

    The thing is, you can always sell the company later. If you've demonstrated a viable sales strategy, your company is going to be that much more easy to sell, and worth more money.

    • by crowne (1375197)
      Ask the question on http://startups.com/ [startups.com]
    • by dkleinsc (563838)

      If you have to turn to "Ask Slashdot" for what's likely THE most important decision your business could make (sale), then you really have no business farming this out to someone you've just met.

      Drat, and I was just about to make a suggestion about emailing everyone on the Internet and then awaiting their joyous replies.

    • by icepick72 (834363)
      Why don't you ask Vellmont to sell your company. He seems to know everything.
    • If you have to turn to "Ask Slashdot" for what's likely THE most important decision your business could make (sale), then you really have no business farming this out to someone you've just met.

      He should put it up on Ebay. He can offer up his virginity as a sweetener, but beware the tax man.

      Actually, I'm tired of Ask Slashdot. Usually stories are just someone who should know better asking how to do his job. Anything narrow enough to imply competence can be googled and has no appeal as a story. Anything this

      • by cowtamer (311087)

        You know, someone has to 'seed' whatever Google returns. In my googling, I've often found that the answers come from previous 'ask Slashdot' stories that got archived.

        It is indeed brave to 'ask Slashdot' AND make your identity publicly known. But I think the possibility of getting one or two truly insightful replies or links might be worth it to the poster (and the rest of us), provided that he has exceptionally thick skin!

  • I don't understand (Score:4, Interesting)

    by 93 Escort Wagon (326346) on Saturday January 02, 2010 @05:23PM (#30626792)

    Given that you state you don't have the "contacts in the social gaming space", and since you basically state you don't have the expertise in-house to manage the sale - how exactly did you manage to determine that you "can make more money by selling the application to a funded company entering the social gaming space"?

    I am guessing the phrase "we have realized that" in your submission should be replaced by "we're hoping that". I will also speculate that you attempted to follow your first plan - releasing the product to the public - and didn't get any significant interest. If these two suppositions are true, I don't know that you're going to find a company willing to take this off your hands - most of those sorts lost their shirts nine or ten years ago.

  • Post on Slashdot. Free advertising...
  • You're not selling a company. You're selling a product, and an unproven one at that. No one is going to buy this from you, because even figuring out how much it's worth would be a costly endeavor. And what are they going to get for your "company?" A zip file full of source code?

    • by rrrrw22 (231117) on Saturday January 02, 2010 @05:37PM (#30626912)

      We've had severial successful games on the framework, so it is proven:

      http://apps.facebook.com/thesummoning/
      http://apps.facebook.com/hammerfall/
      http://apps.facebook.com/bandbattle/

      Total our games have about 6 million users.

      • by Anonymous Coward on Saturday January 02, 2010 @05:51PM (#30627036)

        Total our games have about 6 million users.

        How much revenue do they generate?

        AH!

      • by Anonymous Coward

        The link for the game "The Summoning" does NOT ask your permission to access your Facebook data. It just takes you straight to the character-selection screen. If you pull up that link while you have an active Facebook cookie in your browser, be sure to go into your "Application Settings" and remove it from the list of authorized applications, or else this fly-by-night (and obviously pretty desperate) company has full access to whatever data can be mined from your Facebook account.

      • Re: (Score:2, Interesting)

        by Mr_Plattz (1589701)

        http://apps.facebook.com/thesummoning/

        "Note: If you do not see buttons for Male/Female, please disable adblock."

        Looks like I won't be your 6,000,001 user.

    • by rrrrw22 (231117)

      I didn't mention in the article, but we also have some games (6 million+ users) that we would be selling along with it to give a new company a jumpstart.

  • "We have realized that we can make more money by selling the application to a funded company."

    That implies that if you sat on it, you wouldn't make money Sounds like fancy words for 'There's no way we can monetize this piece of shit, maybe we can convince some stupid VC company to buy it for more than it's worth.

    Ps. Fuck stupid social networking games. What a bunch of data mining, spamming, assholes.
    • Re: (Score:2, Informative)

      by rrrrw22 (231117)

      We were saying we can't make money from trying to have normal people build games on it. To make good games on it you have to have an organized group of people (like we have done)

  • by Arimus (198136)

    My company has spent the last year developing a framework for creating games on Facebook, Myspace, and Twitter.

    Isn't twitter limited to around 140 characters? If so what games can you play? TLA-Scrabble?

    • I believe in this case Twitter is used purely as one of several spam conduits to, theoretically, generate interest in what we can perhaps best imagine is part of the question mark step in /. meme speak. (Step 3. ??? - 4. Profit) Haven't you spent time around your incompetent corporate directors and overlords enough to understand this yet good sir? :-) (Lucky you I say!)

      • by Arimus (198136)

        I'm lucky enough to avoid our corporate directors - I just hide in my lab playing with the routers - occasionally to tell managers that no I can not make a VHF radio offer Gigabit ethernet like performance - least not without rewriting some laws of physics.

  • To actually get the deal going, start talking to people at companies you think might be good acquirers. Start with polite email, or better yet, get introduced through someone you know who respects your work. Good people to talk to would be founders, C-level people, or investors at the potential acquirer. You will probably get better milage from asking a question, like "do you know anyone who would be interested in our assets" rather than going directly to the point of "you should buy our assets for $XX"
  • Craiglist!
  • Have you considered simply putting an advert into a major daily newspaper?

    What about advertising on websites such as Seek.co.nz, etc.

    If you're looking to employ someone those are normally the sorts of things to do.

  • Where he was writing about how some start-ups are working from the business model of The Producers.

    I find this high interest in off-loading risk onto another company a tiny bit suspect.

    Maybe that's why most firms enabling this sort of activity want to see the business model up and running before they get too frisky thinking about an acquisition.

    My advice -- get the damn thing up and working. Prove there's an audience. And then you won't need anyone to act as your agent. They'll be knocking at your door.

    S

  • Perfect example... (Score:4, Interesting)

    by Anachragnome (1008495) on Saturday January 02, 2010 @06:26PM (#30627374)

    I see this as a perfect example of people trying to base a business model on trying to convince people they need your product rather then making a product they already want.

    I will state this as clearly as possible.

    Your enterprise was doomed to failure before you even got started.

    And another thing. You are trying to enter a field where MOST of your competitors are CROOKS. Do you really want to be associated with such a label as a "Social Network Game Producer" when those that already are seem to be jumping ship in an attempt salvage what little reputation they retain now the cat is out of the bag regarding the less then savory business practices they've used?

    Count your losses, learn from your mistakes and move on. Soon, people will realize how seriously they are being used, excuse me...FUCKED OVER, by social networking sites and start abandoning them for something else to keep them entertained. You want to be in a position where they move on to YOU. You do not want to be the guy they are leaving in the dust.

    Start thinking about what comes AFTER Social Networking sites, then work towards THAT. Well, at least if you want to make money.

    • by JaredOfEuropa (526365) on Saturday January 02, 2010 @07:49PM (#30628036) Journal

      I see this as a perfect example of people trying to base a business model on trying to convince people they need your product rather then making a product they already want

      SAP seem to do pretty well on that business model...

    • by YourExperiment (1081089) on Sunday January 03, 2010 @07:42AM (#30631092)

      And another thing. You are trying to enter a field where MOST of your competitors are CROOKS. Do you really want to be associated with such a label as a "Social Network Game Producer" when those that already are seem to be jumping ship in an attempt salvage what little reputation they retain now the cat is out of the bag regarding the less then savory business practices they've used?

      If this link [deviantart.com] is to be believed, it seems they will be quite at home associating with crooks.

  • How much money have you spent making the product? That's about what it would cost the funded company to make themselves, and that's about what you could possibly sell the company for.

    Also, depending on your corporate structure, you should be able to just sell a majority stake in your company to anyone. If you are looking for someone to negotiate for you, you'll probably have to give that party a stake as well.

    Like other responses here, I'd conclude that you're better off trying to sell your software instead

  • by perpenso (1613749) on Saturday January 02, 2010 @06:52PM (#30627586)
    To be honest, unless you have a successful and *popular* product that has a very high profit margin investors are unlikely to be interested in your software.

    What angel investors and venture capitalists are really interested in is the team behind the company. They want to see a diverse group of people who have a decent probability of launching and growing the venture you are trying to sell. Unfortunately you are saying that the team most familiar with the venture wants to quit. Exiting the venture prior to having a popular product and subordinates who can immediately fill the original team's shoes creates a terrible impression.

    --
    Perpenso Calc for the Apple iPhone and iPod touch [perpenso.com]
  • You need the team from The Goods: Live Hard, Sell Hard.
  • But your assumption is dubious. While you will likely make more money selling your proven apps to publishers than by marketing them yourselves, you will likely not make money from your platform in that way, especially an unproven platform.

    Publishers don't want to buy a platform. Publishers want to buy existing games with proven popularity for an initial capital investment that they can a profit on over time. Publishers fund development of games primarily through paying the original developer of a game to ex

  • by sandanwork (1249254) on Saturday January 02, 2010 @07:34PM (#30627928)
    I can give you my thoughts relative to having founded, grown, and eventually selling my company back in the 90's. I'll leave it up to you to decide how relevant all that is a little over a decade later. My company had a software product that eventually was sold internationally, with customers in 23 different countries. We had a staff of about a dozen engineers and an office assistant. We were entirely profitable, with a solid track record and a respected product. When it came time to sell, I found the people at the Corum Group to be invaluable. I'd suggest starting at their web site and moving forward from there. They are pricey, but the advice and guidance along the way proved to be worth it. Along the way, you'll probably hear a lot of things you don't want to hear, and will be asked to do a lot of things you don't want to do. Get over it. These guys know their stuff.
  • There are companies that just handle mergers and selling your company or buying someone else's. One such company is Corum Group. (http://www.corumgroup.com/) For the record, I do not work for Corum group, nor does the company I currently work for have any current ties to them.
  • You need to find a skilled mergers and acquisition attorney. There are a number of tasks in the selling process, including valuation (what are you really worth) all the way up to the final negotiation - which covers everything from earn-out to pay-out to final disbursements of assets and funds. You need to at least start and find out what your company might be worth.

    If your company is worth good money, you need good advisers to facilitate this process. We're back full circle.

    Summary: find a good M&A

  • by salesgeek (263995) on Saturday January 02, 2010 @09:11PM (#30628488) Homepage

    This isn't to to poster. Now that you've got the word out, you might find a buyer.

    Everyone else: stop telling these people they can't do it, and are idiots for asking. They are smarter than you as they have got 50,000-60,000 people who are now aware of what they have. Also, no one has a freaking clue the first time you sell a company, and often after selling a few. Why? BECAUSE THERE ARE VERY FEW RULES. Just make sure you are getting paid in something that has real value and will continue to unitl your no-sell period ends. Having a lawyer is a give on deals like these.

  • This is exactly the business of investment banks. They evaluate your company's worth and use their existing network of clients to find a buyer. If your company is actually worth something, call them. Yes, I'm talking about Goldman Sachs, Morgan Stanley, etc. If you are a smaller company (which seems very likely, given that you don't know much about business), then try the smaller firms and possibly those with a technology focus: http://www.google.com/finance?catid=us-66043603 [google.com]

    Or try VCs, local rich dudes

  • You're a social media company that doesn't have the whole making contacts thing down?

    And you'd like to ensure you get your full value?

  • by ironicsky (569792) on Saturday January 02, 2010 @10:39PM (#30629002) Journal
    There is a company based out of Winnipeg, Canada named Acumen Corporate Development Inc. [acumencorpdev.com] that is quite good at this sort of thing. They do Acquisition Management/Support and other corporate services for this sort of thing.
  • Selling your company (Score:3, Interesting)

    by Animats (122034) on Sunday January 03, 2010 @12:00AM (#30629388) Homepage

    It's quite possible to sell a company that just has a technology and a demo, but the timing has to be right Vermeer, which became Microsoft Front Page, sold only 400 copies before Microsoft bought them. They, though, had a working product at the right time.

    You need something to sell. You need at least one of revenue, intellectual property, market share, or lead time. Preferably more than one of the above. All Vermeer had was lead time; anyone could write an HTML editor, but they happened to have one at the right time. This is unusual. Usually you need something more than that.

    If they're anywhere near Silicon Valley, those guys should join SVASE [svase.org], meet some venture capitalists, and learn how to pitch. Talking to VCs is useful, because everybody talks to them and they'll tell you who you should be talking to.

  • The 6M users demonstrate your ability in building games - which is probably your biggest asset. I'm not so sure about the framework itself - you probably haven't licensed it to anybody as it's not released. If it is a game-framework company then it should show some traction on selling the game-framework. Other companies or VC...etc. all will look at this. If the target buyer only wants the game-framework, then you'll selling the IP. There is not a lot of goodwill in your company right now for the game-
  • > My company has spent the last year developing a framework for creating games on Facebook, Myspace, and Twitter.

    The obvious question here is: why don't you use your own tool and generate a bunch of games? Now that you have this terrific code-writing technology, why don't you use it? See, that's the tricky part with that kind of project. If it works, then you should be able to use it yourself; otherwise, why would someone pay for it? And even if you actually designed a magic button that will create games

  • Or, at least that has been my experience.

    So, make your firm attractive to a buyer, and make sure you get publicity so that you're known in the industry, and maybe... someone will make you an offer.

    Chip H.

The reason that every major university maintains a department of mathematics is that it's cheaper than institutionalizing all those people.

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