Time to exit?

by Lictwins. Posted on Sep 13, 2020    23    18


I have a *startup that is 20 years old. I have 2 partners that are pretty much silent at this point. in 2008/9 I was offered 500K and walked away, I thought I could make more in the long run. 2012 I was offered 270K also walked away. Its now 2020 and I am once again offered 250K for the site. The site has been steady income for me, I still work a day job but for the last 4-5 years I make average 40k per year salary with minor maintenance. The site is also losing ground. I was at 600K visitors per month in 2015, after a disastrous relaunch and completely messed up the 301 redirects in 2016, I lost SEO and nows is 120K visits per month steady. I could sell, take the 3.5 years salary upfront. Or wait another 3-5 years, rinse repeat. Not sure I have the energy/ stamina to try another idea. And 20 years is a long time to work on something. Thoughts?


Comments

startupstage 1

Let’s do some calculations.

(1) 2008/2009 you was offered 500k. For these eleven years you made 11*40k = 440k profit. Conclusion: You missed an opportunity but you earned almost the same amount.

(2) In 2012 you was offered 270k. In the last 8 years you earned 320k. Conclusion: It’s good that you walked away from the offer.

So, the real question is, is the current offer a good offer?

In the last 4-5 years you earn 40k per year even though your SEO was damaged in 2016.

In my opinion if someone brings me passive income without the necessity to maintain it 24/7, I’d keep it. Besides starting a new business is time and energy consuming.

fortniteditiondotcom 1

Is the 40k salary from just ads since you mention visits per month? Or is it sales also?

  Lictwins 1

Mostly ads from one advertiser. There are some affiliate sales

chickenroads 1

See if you can sell 80% 9f the company & keep 20% or just consider different options that may be beneficial. Do you really need the money? What else do you plan to do with your time or money that will be available after the sale?

  Lictwins 1

thats good suggestion, I am not sure I can. Its asset sale so I am not sure its possible. Also once I sell it I am not sure about being handed a lot of maintenance/ transition issues.

LavenderAutist 2

If you sell a part of it, that becomes headache.

Better to just hire someone to manage it.

The job market is bad right now. If you can organize it where some young graduate that can't find a job and do most of the work, that is better.

LavenderAutist 1

How's the security of your day job?

Do you think if you lost your day job you cod actually ramp up the site to make a lot more money?

If your day job is stable and you rather have the money than the option to grow it later...or that you like the safety of having it now, then it sounds like you know what you want.

  Lictwins 1

Well I am 47 year old freelance developer. My wife's job is pretty steady. I can't decide, we've gotten use to the supplemental income

LavenderAutist 2

Then keep it.

If it lasts for another 20 years that is easy supplemental income in retirement (for maybe 5-10 hours of work per week at most) that you can easily manage remotely anywhere in the world.

Websites are like the best real estate now. The best sites are already taken and we already know that apps have an easy cap on phones.

So while physical real estate will cap at some point, digital real estate will appreciate in value..

See this article below.

https://www.bloomberg.com/news/articles/2020-09-10/barrack-steps-back-from-colony-in-era-of-reprice-and-reinvent

Rooting for you and your wife.

Sounds like you are booth in a great position.

Dabellator 2

What does your gut say right now? Your post makes me think you're leaning towards taking it. Do you do this because of the income, or do you enjoy running a side project? You said you don't have the energy to start a new project, but how's your energy level with maintaining this one? After 20 years, are you still excited to tackle new issues, or has it gotten tiresome?

If you still enjoy maintaining the current project, then keep it! If it's feeling a bit like a drag, then letting it go will be a relief, and the money will be a welcome bonus. I actually wouldn't be surprised if 3 months after you let it go you suddenly have energy for new projects, and 250k in the bank will make you feel like you can take on anything...

caesar_7 5

Think about it differently.

Let's assume you have 250k in your pocket (no tax implications, after tax) - where will you invest the funds to get 16% of annual profit?

Especially since you've mentioned not having enough energy for a new gig.

Even with dropping revenue it still might be a good investment.

MaxPast 4

I always look at similar questions from the other side: what if you had $250,000 in cash right now - will you buy your current share of the website? Really? :)

The rule is simple: by refusing to sell you agree to buy.

I use the same approach when cleaning up my garage, by the way: I just look at all these items I never used more than once and ask myself if I really want to buy them back for the price I can get from Ebay, even if it's cents on the dollar.

Cattlegod 1

Great perspective

rvwc 5

Are you still passionate about it? Do you still love what you do? Those are just as important considerations as the money.

  Lictwins 9

Passionate about the idea, and I always thought about it as my legacy. Not passionate about about ready to go on vacation and getting an 18K tax bill from CA because the other founder took 2 paychecks on payroll and we were suppose to file a CA return 10 years ago. I am getting too old for this. EDIT- I think you are right though, its a major consideration, thank you

LavenderAutist 1

Well, if you move to a low tax state in the future, it's even better. California and New York are the tough ones.

Plus you can run a lot of business expenses through the business long term.

classycatman 47

Personally, I’d sell it. You don’t sound particularly excited about the site and maybe getting rid of the stress of having it will free up brainpower that sparks a new idea and you’ll have some cash to invest in it.

LokiTM 1

From a purely financial point of view. How long are you likely to continue at this, what would you make, and what do the trends suggest the company would be worth at that point? Compare that to the cash offer in hand. It does not sound like there is a lot of upside potential, and there is probably a reasonable chance that things get significantly worse. Unless working in the business contributes significantly to your quality of life (you love doing it), if the numbers don’t look good I suggest you take the cash now.