Buyout Offer for My Startup - Yes or No?

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u/jiujitsu · Joined Oct 2024

Accept a buyout offer, or continue growing my startup independently? Let's start from calculating the basic financials.

Last update Oct 2024
  • Scenario 1: Take Buyout Offer
  • Scenario 2: Continue Growing My Business
  • Which One Is Higher (%)

Tweak the numbers to gauge your appetite to risk and future market uncertainty, if you choose to continue growing your business.

# Years from Now

Try your numbers:

The amount offered for your startup.

A =

Your startup’s current annual revenue.

B =

Expected revenue growth rate over the next few years.

C =

The percentage of your revenue that is profit.

D =

The industry-standard revenue multiple for similar startups.

E =
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  • Amount
    Any single amount ($).
  • Cash Flow
    Rent, insurance premium, salary, ...
  • Current Asset
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  • Installment Loan
    Mortgage, car loan, ...
  • Percentage
    Any percentage value (%).
  • Years / Months
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  • Age
    Show "Age" instead of "# Years from Now."
  • Retirement Age (requires Age)
    Enable "Investment Return After Retirement."

Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

If you take the buyout offer, you'll simply put the lump sum into regular investment to continue growing that money.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

F̃ =

Calculations

(Expressions are evaluated at every year.)

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Add Decision or Expectation
  • Buy Asset
    Buy an asset growing at its own rate.
  • Take Installment Loan
    Take a mortgage, loan, etc.
  • Invest
    Receive/Spend a lump sum.
  • Expect to Invest
    Expect to receive/spend a lump sum.
  • Expect Monthly Cash Flow
    Expect to receive/spend cash monthly.
  • Expect Yearly Cash Flow
    Expect to receive/spend cash yearly.
  • Define Variable (Numerical)
    Calculate an intermediate value.
Add Intermediate Calculation
  • Define Variable (Numerical)
    Calculate an intermediate value.
  • Define Variable (Cash Flow)
    Calculate a combined cash flow.