How to sell your startup to FAANG and big companies?

Question

Always been seeing startup founders say that their companies got aquired by Google and whatnot, and then some of them worked there for a few years, but only holding the position as (Senior) Software Engineer, what does it really mean and how to initialize this process? Is that an acquihire? If yes, who do they usually talk to? The manager of their competing products?I'm also in the position that got a few customers for my SaaS product, but did not plan to stay too long in the industry. Some of the old PE-holding companies have really antiquated products but they are just big with many cash on hand. I'm thinking of seling my product to them. What's the best way to get started with the process and how likely they are intersted in acquiring a small but new player in their industry? Ideally $100kThank you Hackers

throw_away8585 · Accepted Answer

You aren't going to like the answer, but the answer is they wouldn't be interested at all. For 100k you are basically just applying to the company, that amount of money for a startup isn't even on their radar. I've been apart of two startups that have been acquired by large tech. It's typically done one of two ways.
(1) For acquihires, it needs to be done through VC connections with the M&A team at the large company. And the prices are still in the millions.
(2) The M&A team seeks you out, because your product is either truly innovative, actually makes enough money that will make a dent on their balance sheet, or you have a very unique team, PhDs, well-known engineers, etc...
If you want to sell your company for 100k, I think your best bet is to go to well funded startups that need engineers, but if it's just you I think it'll be a tough sell.

swatcoder · Answer

If you want a job at a FAANG and can justify your skills, apply to the FAANG.
If you want to sell your SaaS for $100k and can justify that price, list it with a small business broker.
That's not "merger" or "acquihire" scale, it's a portfolio or retirement purchase for an entrepreneurial tech person or a retired high-income professional type.

gnicholas · Answer

PE firms will not acquire for $100k. They won't look at you unless you have at least 10x that in ARR, possibly more. If you have cool new features and have something to add to existing products, then you should have no problem taking customers from the PE-backed companies. Do that, or find a way to protect your competitive advantage (patents?) and then approach the other companies.
FAANG doesn't look at startups in this range either. They make strategic acquisitions and acquihires, and generally for much more than this (even for just a single employee).
It's the same as what they say about funding: the best way to get it on good terms is to have a business that's doing really well. Ditto for acquisitions.

codegeek · Answer

"got a few customers for my SaaS product"
Can you share more details like how many customers, what's the average revenue per customer etc ? If you want 100K for this business, usually people pay 2-4 times SDE (sellers discretionary earnings) for a small business like yours (SAAS part doesn't matter as it is still very small).
So you could may be get 100K if it makes around 3K/Month give or take.

b20000 · Answer

i am interested in this question too and would like to hear from founders who went through this and how the conversation got initiated and what the process was like.