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?"
Why not (Score:4, Insightful)
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)
Riding on hype in the right moment might make more money though.
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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)
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!!!
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Re:Why not (Score:5, Funny)
1) you can block the updates from showing.
2) they're YOUR friends, motherfucker. stop associating with idiots?
Re:Why not (Score:5, Insightful)
2) they're YOUR friends, motherfucker. stop associating with idiots?
Call me a cynic, but that would leave little people to associate with.
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Call me a cynic, but that would leave little people to associate with.
Little people can be idiots too!
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All those Cowards making Anonymous jokes about little people are bigger idiots than the little people I've met.
Get it? Bigger...
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It's opt-out on a per-application basis. There isn't a way to block all applications.
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Oh no! You've found a lost, lonely social gaming framework, and it's looking for a home.
Click here if you'd like to adopt it!
Re:Why not (Score:4, Informative)
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.
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Argh. That should read "now that I have the basics clear."
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If someone offers you money for your lottery ticket, you can't wait to see if you win before selling.
Step 1 (Score:1)
Advertize on Slashdot for free by couching it as an 'article'?
Re:Step 1 (Score:5, Funny)
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)
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: (Score:2)
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.
Translation to english (Score:5, Insightful)
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.
Re:Translation to english (Score:4, Informative)
Actually, we've made quite a bit of money off of several successful games we built on the framework, we just realized that getting everyday people off the internet to build successful game isn't going to work.
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VC funding doesn't count.
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Tell that to Apple and Google, kthx
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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:Translation to english (Score:5, Insightful)
If you have made money creating social networking games, then you should have mentioned these games in the article. Not only would that have advertised your existing games, but it would give interested parties an idea of how much your software is worth.
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.
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LOL! So you interviewed with them too then?
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That truth from euphemism option doesn't show up in babelfish. It'd be awesome if someone would sell that.
If nobody is knocking, it's too early (Score:2, Insightful)
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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.
Re:you want VCs and an exit strategy, basically (Score:4, Informative)
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)
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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)
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)
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.
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Prove that its worth buying (Score:3, Insightful)
Re:Prove that its worth buying (Score:5, Informative)
Its out in public now at http://www.appainter.com/
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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.
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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)
Re: (Score:2, Interesting)
The games just use twitter for the viral mechanic.
"Viral mechanic"? (Score:2)
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Eh, I suspect you don't understand the area. It is perfectly clear what he means by it. If you have nothing meaningful to say, just don't.
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The games just use twitter for the viral mechanic.
Mechanics with viruses are generally something to avoid.
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Nethack.
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@player1: Marco!
@player2: POLO!
@player1: Marco!
@player2: POLO!
Foolhardy. (Score:5, Insightful)
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.
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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.
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Ebay (Score:2)
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
Re: (Score:2)
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)
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.
Sure... (Score:1)
That's not a company (Score:1)
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?
Re:That's not a company (Score:5, Informative)
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.
Re:That's not a company (Score:5, Insightful)
How much revenue do they generate?
AH!
Re: (Score:2)
Actually heard in a meeting last week "I don't care about revenues, show me at least a million users".
Sounds like the dot com bubble again. Year 2000, here we come.
It sounds to me like the game developers are the ones that need to pay, perhaps by tying in some in-game advertising or themes. Facebook users are too cheap to pay for anything.
Re:That's not a company (Score:5, Informative)
It seems that others might be interested in any revenue that is generated
http://mercuralis.deviantart.com/journal/23000665/ [deviantart.com]
Beware the first link! (Score:2, Informative)
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.
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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.
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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.
Wait a minute (Score:1)
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.
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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)
WTF (Score:2)
Isn't twitter limited to around 140 characters? If so what games can you play? TLA-Scrabble?
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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.
Talk To Potential Acquirers (Score:2, Insightful)
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Thanks, thats helpful. I guess my only thought is that an MBS isn't going to have any more contacts than my team does.
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^ MBA
Obvious (Score:1)
Have you considered... (Score:2)
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.
Reminds me of Cringely's recent article (Score:2)
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)
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.
Re:Perfect example... (Score:4, Funny)
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...
Re:Perfect example... (Score:5, Informative)
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.
Ask yourself this (Score:2)
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
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]
You need... (Score:2)
The players in the space are publishers (Score:2)
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
Use these guys... they worked for us (Score:3, Informative)
Companies that do just what you are asking for (Score:2)
Find a good M&A attorney (Score:2)
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
Why bother being negative? (Score:4, Insightful)
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.
That's an investment bank (Score:2)
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
Just checking... (Score:2)
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?
Acumen Corporate Development (Score:4, Informative)
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.
Your biggest asset... (Score:2)
Again with the frameworks (Score:2)
> 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
Software companies are bought, not sold (Score:2)
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.
Re: (Score:2)
You mean Hacker News, right?
Linky:
http://news.ycombinator.com/ [ycombinator.com]
Anonymous tears are the most delicious.
Best reply so far, I've done this (Score:4, Informative)
The poster is going to have to find someone who has been through this and get referrals. Sorry, that means meeting people and using social skills. Emailing potential buyers probably won't help because if you don't know any people in the space, you also don't know how to communicate with them out of the blue; you'll probably put them off, if they read your message at all.
Get an attorney who has experience doing these types of deals, this has saved me from failed deals. The guy who did Daddy & Mommy's will or plays golf with Uncle Barney or whatever isn't the way to go.
Trying to sell your company through one of the hundreds of business for sale websites brings tire kickers and scam replies. Going to the local business brokerage franchise (basically a bunch of commission-only out-of-work real estate salesmen) is usually a dead end for this type of thing, they won't grasp what you are selling, but they will have free balloons for the kiddies.
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I agree - IP lawyers, especially those close to the industry you're in will be your best source for contacts and overall representation. I don't like to work with lawyers more than I have to, but in this case I think a high end lawyer will pay for him/herself in getting you the right price.
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Yep, this is a situation where attorneys pay off. When selling a company ($1M - $5M) I tell people to prepare to pay $15K to $50K for a transaction attorney, but an IP attorney will probably run more. Buyers will try last minute tricks to cut the price in half or more so an experienced lawyer is a must.
While I'm at it... Some other comments have said a broker wants 6%, that's only for a quite big deal (assuming some variant of a sliding Lehman scale is used). Even in the $1Million range 10% is common (even