how’d it get bought out by a large
company so got a great question for one
of my YouTube viewers love you guys I am
greater who wrote in to say I’ve noticed
that many smaller the medium companies
often get bought by a large figure my
company such as Google Yahoo Facebook
however I was wondering if the small
companies contacted them for offers or
if they wait until the big companies
contact them and want to buy thanks
greater this is a great question and one
a lot of entrepreneurs think about you
know you want to get acquired someday
you want to build this business up and
exit and make a big payday and so I want
to start by talking about why companies
will acquire you there are three main
reasons why a big company will dig in
and acquire your company the first is
team the second is technology and the
third is your customers so team this is
basically they’re buying you just to
have you just to have the founders or
whoever you’ve hired on board on their
company they don’t like your company
they don’t like what you’ve made but
they want you on board so an example is
when Google bought milk which is a
company set up by Kevin Rose who was one
of the Digg founders they bought the
company they paid you know rumor fifteen
million dollars to the company they shut
down the new company they fired all the
engineers and basically kept Kevin rose
on board and some of the designers
because they wanted Kevin they wanted
him on Google’s team and so that’s why
they hired it that’s why they bought the
company so people may buy your company
just for your team the second is
technology and this is where you have
something that is better than what’s out
there on the market right so you’ve got
you’ve got software you’ve got you’ve
got patents you’ve got technology of
some sort that a company will want to
buy they don’t have yet and the third is
customers you know they made this big
company maybe trying to move into your
space and they realized hey here’s a
leader they already have all these
customers and instead of trying out and
go to acquire these customers ourselves
we can just acquire the business and get
all these customers to ourselves right
away and so the stronger your team is
the stronger your technology is and the
stronger your customer base is the
higher price you get acquired for
one quick thing to think about for for
being bought and the price tag when
you’re going into a company and you say
you know okay we’re gonna be bought out
this is our price tag if you want to buy
us the company say thank you and then
the CEO will talk to his head of sales
and his head of technology and let’s say
how long and how much will it take us to
replicate what this company does so big
company Facebook Yahoo whatever we’ll
look at your company and say how long
will it take us and how much money will
it cost to reproduce their technology
and to get the customers that they have
and they’ll assign maybe it’s a year
maybe it’s two years anybody’s three
months maybe it’s a million dollars
maybe it’s a hundred million dollars
whatever it is and then that helps them
set the valuation for your business
right so if it’s gonna be cheaper for
them and faster for them just to buy you
out and that gets them to market faster
and it’s worth it for them they’re gonna
give you a higher price tag if they feel
like you know what we could do this
ourselves
thank you very much they’re not gonna
buy from you this is a conversation it
always happens before you get bought out
by that big company now how does the
structure actually work how does that
process work so you get approached by a
big company it’s very rare that it’s the
little guy going up to the big guy and
saying hey we want to get bought out
will you guys buy us out
right it looks desperate how it usually
works is the big company has to realize
that they have a hole in their offering
they have to realize that they want to
get into this market whatever that
market is they want to get into it and
the realize that they don’t have the
right team technology marketing yet to
fulfill that and they’re looking to you
as a potential way to jumpstart that
process to get them there faster to beat
their competition but they have to
realize that there’s a hole if there’s
no hole then they’re not gonna do it
right if they realize there’s a hole
then they’re gonna go out and start
looking for opportunities they’re gonna
start looking for you know who are the
leaders in this field and let’s start
talking to them if they don’t realize as
a whole yet then
you have to create it you have to kick
up a storm you have to say hey this is
an industry worth paying attention to
and then companies will look at and say
hey maybe we should be branching into
this field too and maybe instead of
trying to do it ourselves which you just
acquired these guys it’s creating
awareness on the big company side that
they need to be getting into this field
so I sold my first business to a
multi-billion dollar company and it
wasn’t us going to them and saying hey
here’s a software company coming by us
it was a combination of one us creating
a lot of momentum and kicking up a lot
of noise in our field so we’re getting
customers acquiring a large base doing a
lot of media doing a lot of press
acquiring distribution channels
internationally kicking up a storm to
help our business but also make people
pay attention to us combined with the
fact that these bigger companies we’re
now starting to look at our field and
say hey we need to get in here we need
to get into this business and we’re
gonna start buying companies up to do it
and that’s how I ended up selling my
business and how hopefully you can sell
yours to believe those are watching I’d
love to hear your thoughts leave it in
the comments below if you have a
question that you want me to dig into
deeper leave it in the comment section
below if you guys like this video you
can support me by clicking on the link
at the top of the description and click
on my face subscribe to the channel
thank you so much I’ll see you soon
company so got a great question for one
of my YouTube viewers love you guys I am
greater who wrote in to say I’ve noticed
that many smaller the medium companies
often get bought by a large figure my
company such as Google Yahoo Facebook
however I was wondering if the small
companies contacted them for offers or
if they wait until the big companies
contact them and want to buy thanks
greater this is a great question and one
a lot of entrepreneurs think about you
know you want to get acquired someday
you want to build this business up and
exit and make a big payday and so I want
to start by talking about why companies
will acquire you there are three main
reasons why a big company will dig in
and acquire your company the first is
team the second is technology and the
third is your customers so team this is
basically they’re buying you just to
have you just to have the founders or
whoever you’ve hired on board on their
company they don’t like your company
they don’t like what you’ve made but
they want you on board so an example is
when Google bought milk which is a
company set up by Kevin Rose who was one
of the Digg founders they bought the
company they paid you know rumor fifteen
million dollars to the company they shut
down the new company they fired all the
engineers and basically kept Kevin rose
on board and some of the designers
because they wanted Kevin they wanted
him on Google’s team and so that’s why
they hired it that’s why they bought the
company so people may buy your company
just for your team the second is
technology and this is where you have
something that is better than what’s out
there on the market right so you’ve got
you’ve got software you’ve got you’ve
got patents you’ve got technology of
some sort that a company will want to
buy they don’t have yet and the third is
customers you know they made this big
company maybe trying to move into your
space and they realized hey here’s a
leader they already have all these
customers and instead of trying out and
go to acquire these customers ourselves
we can just acquire the business and get
all these customers to ourselves right
away and so the stronger your team is
the stronger your technology is and the
stronger your customer base is the
higher price you get acquired for
one quick thing to think about for for
being bought and the price tag when
you’re going into a company and you say
you know okay we’re gonna be bought out
this is our price tag if you want to buy
us the company say thank you and then
the CEO will talk to his head of sales
and his head of technology and let’s say
how long and how much will it take us to
replicate what this company does so big
company Facebook Yahoo whatever we’ll
look at your company and say how long
will it take us and how much money will
it cost to reproduce their technology
and to get the customers that they have
and they’ll assign maybe it’s a year
maybe it’s two years anybody’s three
months maybe it’s a million dollars
maybe it’s a hundred million dollars
whatever it is and then that helps them
set the valuation for your business
right so if it’s gonna be cheaper for
them and faster for them just to buy you
out and that gets them to market faster
and it’s worth it for them they’re gonna
give you a higher price tag if they feel
like you know what we could do this
ourselves
thank you very much they’re not gonna
buy from you this is a conversation it
always happens before you get bought out
by that big company now how does the
structure actually work how does that
process work so you get approached by a
big company it’s very rare that it’s the
little guy going up to the big guy and
saying hey we want to get bought out
will you guys buy us out
right it looks desperate how it usually
works is the big company has to realize
that they have a hole in their offering
they have to realize that they want to
get into this market whatever that
market is they want to get into it and
the realize that they don’t have the
right team technology marketing yet to
fulfill that and they’re looking to you
as a potential way to jumpstart that
process to get them there faster to beat
their competition but they have to
realize that there’s a hole if there’s
no hole then they’re not gonna do it
right if they realize there’s a hole
then they’re gonna go out and start
looking for opportunities they’re gonna
start looking for you know who are the
leaders in this field and let’s start
talking to them if they don’t realize as
a whole yet then
you have to create it you have to kick
up a storm you have to say hey this is
an industry worth paying attention to
and then companies will look at and say
hey maybe we should be branching into
this field too and maybe instead of
trying to do it ourselves which you just
acquired these guys it’s creating
awareness on the big company side that
they need to be getting into this field
so I sold my first business to a
multi-billion dollar company and it
wasn’t us going to them and saying hey
here’s a software company coming by us
it was a combination of one us creating
a lot of momentum and kicking up a lot
of noise in our field so we’re getting
customers acquiring a large base doing a
lot of media doing a lot of press
acquiring distribution channels
internationally kicking up a storm to
help our business but also make people
pay attention to us combined with the
fact that these bigger companies we’re
now starting to look at our field and
say hey we need to get in here we need
to get into this business and we’re
gonna start buying companies up to do it
and that’s how I ended up selling my
business and how hopefully you can sell
yours to believe those are watching I’d
love to hear your thoughts leave it in
the comments below if you have a
question that you want me to dig into
deeper leave it in the comment section
below if you guys like this video you
can support me by clicking on the link
at the top of the description and click
on my face subscribe to the channel
thank you so much I’ll see you soon
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