USAToday has an article today discussing the recent trend for startups to sell themselves on eBay. USAToday starts off with a joke:
“What do Beanie Babies, Pez Dispensers and troubled Internet companies have in common? They’re all for sale on eBay.”
eBay has become known as a quick and easy way to sell your startup, should you need to. Techcrunch has a nice phrase for this – the “eBay exit”. USAToday notes that “more than 10 dot-coms” have recently put themselves up for auction on eBay. The paper says that Search engine DigForIt.com sold for $25,400 this month and SynapseLife, an online calendar and organizational site which Techcrunch wrote about, sold for $60,000 (it opened at $50k). Also Read/WriteWeb covered the eBay sale of Talkr in February this year, which sold for $50k all up. There are many more instances of ebay exits we could list. And there are other places where startups can sell themselves too, like SitePoint Marketplace (Josh Catone noted in January that Blogster went that route).
An interesting question is: have the startups that sold on the likes of eBay or SitePoint had satisfactory outcomes? Most of the startups that sell on such sites go for less than $100k. The highest price we’re aware of was YCombinator’s online calendar Kiko, which as USAToday noted eventually went for $250,100 – including a price increase of $100k in the last two minutes of the auction. Kiko apparently sold on eBay because they wanted “a fast, simple separation”. And by most accounts, that was a good return for YCombinator. But remember that many startups spend months and months of bootstrapped time building up their labors of love, so a return of less than $100k is probably more often than not a loss for those entrepreneurs.
Indeed USAToday also recounts the tale of CrispAds auction, which unsuccessfully tried to sell on eBay. It had a minimum price of $90,000, but ended up without any bids. According to USAToday, months later the company sold via a broker for “a few hundred thousand dollars”.
If you’re one of the many companies recently to have sold on eBay, let us know in the comments how you felt the process went. Should other entrepreneurs look to eBay, or is a private brokerage sale the best bet?
