Finding Someone To Manage Selling a Software Company? 165
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?"
you want VCs and an exit strategy, basically (Score:5, Interesting)
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.
I don't understand (Score:4, Interesting)
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.
Re:Why not (Score:5, Interesting)
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:Seriously? (Score:2, Interesting)
The games just use twitter for the viral mechanic.
Err, no. (Score:3, Interesting)
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 $$ to compensate VCs, all the better.
I've been there, done that, multiple times.
Re:Translation to english (Score:3, Interesting)
So you built a product and once finished making it you realized you fucked up as the target market you built it for just not interested!
So you have actually made quite a bit of money from it, yet the means for generating money (getting everyday people off the internet to build games) is just not gonna work.
Can you not see the bullshit and delusion streaming from your arse?
Re:Foolhardy. (Score:1, Interesting)
Actually I'm going to disagree with Vellmont there. Invariable the crowd tends to get things extremely wrong. Wait, that doesn't sound like a disagreement? Actually, he was being fairly neutral and I'm being completely chastizing.
Looking from the outside in with reference to some lovely topics in 2009 I was always left with a bit of a chuckle.
In any event, if you have seen the website I have serious doubts about the viability of the frame work. It screams basement job from hell.
I think John Carmack said it best when he said NO ONE is going to buy a game engine that does not run a successful game. Thus the reason Id software actually sales the game Quake.
Perfect example... (Score:4, Interesting)
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.
Investors buy teams, not software ... (Score:3, Interesting)
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]
Easy (Score:2, Interesting)
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...
Re:That's not a company (Score:2, Interesting)
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.
Re:Prove that its worth buying (Score:3, Interesting)
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?
Selling your company (Score:3, Interesting)
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.
Re:Translation to english (Score:4, Interesting)
You really do need a business type. Now that I have seen the demo I think that you actually have something that could be sold, but getting there is likely to be very tricky.
I am sorry to have been so disparaging.