What's my Startup Worth in an Acquisition?

In this episode of the Startup Therapy Podcast, Ryan Rutan and Startups.com founder Will Schroter discuss the unrealistic expectations that many startup founders have when it comes to selling their business. They detail the common pitfalls and misconceptions about startup valuation, the differences between raising capital and selling, the realities of private equity, and the dangers of deferred compensation. With insights from their own experiences of buying and selling companies, Ryan and Will provide a candid look at how to navigate the tricky world of startup acquisitions and set more realistic expectations for exit strategies.

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Resources:Startup Therapy Podcast https://www.startups.com/community/startup-therapyWebsitehttps://www.startups.com/beginLinkedIn https://www.linkedin.com/company/startups-co/

Join our Network of Top Founders Wil Schroterhttps://www.linkedin.com/in/wilschroter/Ryan Rutanhttps://www.linkedin.com/in/ryan-rutan/

What to listen for00:00 Introduction to Startup Acquisitions

00:16 Realistic Expectations in Business Sales

01:09 Understanding the Acquisition Process

01:37 Our Acquisition Experience

02:29 Challenges in Closing Deals

04:31 The Importance of Direct Communication

07:08 The White Knight Fallacy

13:07 Investor Expectations vs. Reality

20:35 The Figma Acquisition: A Case Study

21:12 Understanding Market Leadership and Valuation

21:44 The Reality of Acquisition Multiples

24:53 The Spectrum of Potential Buyers

26:07 Private Equity: The Predatory Buyer

28:32 The Harsh Truths of Selling a Startup

32:53 Cash vs. Deferred Compensation

39:15 Managing Expectations in Startup Exits