I would like to learn everything I can about how to create an eCommerce brand to eventually be acquired in 3-5 years. I have experience in eCommerce but no experience at all with acquisitions/selling a company.
For starter, you can apply the framework that you used to sell a product in your eCommerce business, to selling a brand/website/company to potential buyer/investor. Since you have experience in eCommerce, this must be familiar with you.
1. Understand the market. Is there a market for your brand? I.e. is there a potential buyer who would be interested in buying your brand? What marketplaces have you looked into to buy and sell these brands/websites/companies?
2. Pricing/valuation. How do you value your business? What valuation methodology do you use? is it a multiply of revenue, profit, or something else? Going backward, what kind of financials do you have to achieve to be able to sell your brand at the valuation you are expecting?
3. Fulfillment/transfer of ownership. How do you manage this? Is your business transfer-ready (i.e. having a system in place that can easily transferable to a new owner?)
Happy to jump on a call to chat more!
Answered 4 years ago
I'd recommend a couple of things here:
1. Make sure you go into a vertical that isn't completely saturated. Make sure your product offering and value stands out and isn't in a sea of similar options. Trademarking and patenting can also be great tools to keep people from encroaching in your space, but it isn't full proof and there's tons of ways for people to get around it. More important here is to establish yourself as the original and first market leader
2. Focus on scaling sustainably and profitably. This is one of the most important things buyers/investors will look for. Gone are the days where unicorns that lose as much money as they make are being snatched up or seen as valuable. You want to prove you can build your business and that it can last 100 years on its own
3. Build a defensible position: Establish marketing and business building tactics that make it very difficult form competitors to come into your space. For example if you , you can negotiate category exclusivity in some areas so your partners can't work with any of your competitors. This is immensely valuable.
Answered 3 years ago
It's great that you're considering your exit now. Some buyers like to be the first capital to the table so having multiple rounds of funding may be fast no. While other buyers will get in on the fun and hope to make big wins once the company is public. Focus on building a good company with significant revenue...you will have no issue finding a buyer.
Answered 2 years ago