Ask HN: How to pursue acquisition?
Firstly congrats, that&#x27;s great that your business has driven so much ARR with 1 person and no funding! Based on your question I assume that you haven&#x27;t sold a business before so here&#x27;s some things to think about, ultimately before even deciding whether a sale makes sense for you. This is a timely post, my company had an acquisition offer that we ultimately rejected so I have some insights FWIW. A brain dump:<p>1. Only engage in acquisition talks if you&#x27;re very serious. They consume a lot of time - negotiating will become your new job. The view is don&#x27;t talk to Corp Dev unless you&#x27;re serious [1] (this is very true)
2. Really you should sell when you don&#x27;t want to sell [2]. Firesales will produce a minimal $ outcome. The upside is it&#x27;s a complete package - a sale is still a sale (successful entrepreneur&#x2F;exit), you&#x27;re getting something for the business, it&#x27;s a good resume story especially if you&#x27;re a first-time founder. You&#x27;ll also get a good job at the acquirers business
3. The market price isn&#x27;t based on some X of your ARR, it&#x27;s whatever someone is willing to pay you, so $200k ARR sounds great (congrats btw), but it&#x27;s what you&#x27;re worth to them.
4. Asset sale vs stock sale - generally businesses want your assets not your stock, whereas the tax for you (assuming you owned you stock &gt;1 year) will be less via a stock sale, you&#x27;d be double-taxed from an asset sale so really try against this way [3]
5. Tax is a big consideration. In CA, long term capital gains is ~30% vs ordinary income ~50%
6. Form &amp; timing of consideration - form: cash vs equity - cash is king, but any public company stock should be seen as liquid (blue chips you mentioned would be great stock for consideration). Also timing of the purchase price is huge. Typically they&#x27;ll try to defer it over a long period of time (2-4 years) as an earn-out to incentivize you to stay there. Earn-outs might also have milestones you need to hit in order to get the payouts too.
7. Costs of selling. You&#x27;ll need a lawyer and maybe a CPA and you&#x27;ll generally pay their bill, so this could easily hit &gt; $50k (if the negations fall through you&#x27;ll owe whatever work your lawyer has done to date too)
8. Negotiations are all about leverage. If you&#x27;re selling your company then they will hold a lot of the leverage, so be aware when you&#x27;re agreeing to the letter of intent that after that moment, normally clauses&#x2F; points will only get worse for you. What you have going for you though but the sounds of things is that you don&#x27;t need to sell, you&#x27;re just thinking of selling - ie, you&#x27;re revenue creating, hopefully profitable, so it&#x27;s not like you&#x27;ll run out of cash during the process. Always aim for a 30 day close to minimize the drag on of the deal.<p>Assuming you do want to sell, then avenues to go down could be:
1. Do you have any large customers? Large customers might be a good source of potential suitor, they already like your product (they pay for it), you have relationships with them. Always frame it as looking at deeper partnership opportunities (this is what businesses call it when they&#x27;re skirting around the word &quot;acquisition&quot;)
2. The team that do M&amp;A in a business are called Corporate Development, so LinkedIn for these guys at all the big potential suitors you can think of, set up coffee (they might be interested because that is literally all their job is - you&#x27;re doing half their legwork for them).
3. Who are your competitors? Search them on on Crunchbase for any sales and see what companies are buying.
4. You haven&#x27;t raised any capital but do you have any VC links? These guys can offer invaluable advice, even if they&#x27;re not interested in funding you &#x2F; you aren&#x27;t looking to raise they normally have some great angles for you so you should hit them up - they are also (a good one) some of the most well connected people, so can put out feelers for you&#x2F; makes intros. You never know, they might persuade you to take their money to take on aws etc...<p>Let me know if you had any questions on it, interested to hear your thoughts!<p>[1] <a href="http:&#x2F;&#x2F;www.paulgraham.com&#x2F;corpdev.html" rel="nofollow">http:&#x2F;&#x2F;www.paulgraham.com&#x2F;corpdev.html</a> 
[2] <a href="https:&#x2F;&#x2F;justinkan.com&#x2F;the-founders-guide-to-selling-your-company-a1b2025c9481" rel="nofollow">https:&#x2F;&#x2F;justinkan.com&#x2F;the-founders-guide-to-selling-your-com...</a>
[3] <a href="http:&#x2F;&#x2F;www.marinercapitaladvisors.com&#x2F;resources&#x2F;publications&#x2F;asset-sale-vs-stock-sale.html" rel="nofollow">http:&#x2F;&#x2F;www.marinercapitaladvisors.com&#x2F;resources&#x2F;publications...</a>