Wow, this will be hard to sum up, but bear with me: I currently have 45% ownership of an unincorporated canadian startup. The business is as follows: We started a web hosting company that resells shared hosting. Our costs are simply server rental fees, advertising and support agents who reply to emails. We've been profitable since day 1 and make a respectable living (roughly 100k per year profits to split between the two of us) Last summer, we bought out another hosting company that doubled our income and our profit at a really good price. (paid roughly 60k) On the side, we have a third website where we get client contracts sporadically to provide us extra income. I want to get out of this and start my own startup, hopefully with the help of YC. I haven't been working there anymore for the past 2 months except to tie up my current projects. How do you go about valuating such a venture? My partner tells me that the best way to estimate a hosting company's value is to look at the income without expenses over one year. For the dev company, my partner says that since none of it is recurring income, it has no value above and beyond the accounts receivable for current projects. I've been working on this for 2.5 years and I feel like I'm getting the short end of the stick if I get nothing but 70k for my half, given that we bought that second company who was the same size as ours initially at 60k and it was way undervalued. If I accept this offer, I'll definitely have money to sustain me at least for a year while I work on my startup. Should I strive for more or just take what I can get? Am I being greedy? |