If you are an Entrepreneur or a Business Person and you are planning to take over any startup, Then you must follow These 4 factors.
Competitive conditions, technological advances, and globalization have all contributed to a growth in business thinking from build-to-grow to buy-to-grow. It’s not just big tech companies that have developed an acquisition mindset and keen eye for identifying great startups to buy, either. Even non-tech industries are beginning to understand the necessary foresight to acquire smaller companies to remain competitive and scale.
How to Buy a Startup Factor 1.
Always look for EBITDA(Earnings before interest, taxes, depreciation, and amortization). At least three years worth of EBITDA. When you are buying a startup you need look for three years running revenue and profit.
How to Buy a Startup Factor 2.
Look for companies that have high expenses, so you cut down extra expenses and make the startup profitable.
How to Buy a Startup Factor 3.
And Also look for companies that again, roll up and that’ll fit directly into your core business. So if it’s a business that adds value, even if it makes no revenue.
How to Buy a Startup Factor 4.
The last thing you have to look for is traffic. So, anyone who’s a leader in your space that you can buy, especially if they’re not making much, you may end up giving them like, few hundred grand, a half a million, million and they’ll be like.
And also you must look at their team talent and the platform they are using and also the technology they used. If you are okay with all of these factors you can buy a startup.