Why I sold my startup for £100,000

I launched Saber, my website feedback tool, as a side project in 2011 - back then it was called BugMuncher. Four years later I decided to stop working as a freelance web developer, and put all of my time, and savings, into trying to grow Saber to the point it could pay all my living expenses, and turn a profit.

I documented my progress with complete transparency on Saber’s blog, and after a little over a year of working full time on Saber, I achieved my goal. Saber was profitable.

This is the final entry in my transparent blog series, as from 1st April 2020, Saber is no longer mine. I have officially sold it.

To anyone who’s been following my progress taking Saber from a side project to a profitable startup, my decision to sell Saber may come as a bit of a surprise. After all, a lot of my previous writing has been singing the virtues of being a bootstrapped, solo founder.

For the last couple of years Saber had been stagnating. I’d reached an equilibrium between growth and churn, and had never quite been able to break thought the $5k MRR barrier. This was a little disheartening, as nothing I tried seemed to make any difference, but I was happy to keep trying, as the revenue Saber brought in was enough for me to live fairly comfortably.

That all changed when I became a father at the end of 2018. Suddenly the goalposts had been moved, and the revenue Saber was bringing in wasn’t really enough. We were scraping by, but only just, and were no longer able to put any money aside for savings. Sophie (my wife) and I really wanted to buy our first house, but that was never going to happen if we were unable to save up for a deposit.

The money wasn’t the only problem. The truth is I was bored. I’d been working on Saber for eight years, four of those as my full-time job. I was craving a new challenge. I think this was exacerbated by the fact website feedback was never a passion of mine. I created Saber because it was something other people said they wanted, not because I wanted it. I broke the first rule of starting a business - I wasn’t my own customer. I wasn’t dogfooding.

That’s why In July 2019 I started looking for something else, and very quickly found a perfect looking opening for a senior engineer at FreeAgent. It was a remote job, a new challenge, and a salary of nearly double what Saber was able to pay me. So when I was offered the job, it was a very easy decision - Saber got downgraded to side-project again, and for the first time 8 years, I was working a normal day job.

I’m happy to report it’s a decision I don’t regret. I love the work, the people are awesome, and the salary has allowed us to live comfortably, and save towards buying our first home.

There was only one problem. I was still having to find time to work on Saber. Except with a full time job, a family, and other hobbies, I found myself giving Saber less and less of my time. I’d put Saber in “maintenance mode”, ie: no marketing or new features, just bug fixes and support. Even so, I started to resent Saber, and the time I had to spend working on it. What was once my pride and joy started to feel like burden, a chore. I decided it was time to let it go.

The first thing I did was reach out to the guys at Usersnap, as although they were technically a competitor, I’d been in contact with them throughout my journey. They even sent their congratulations when I achieved profitability, and are just all round great guys. Unfortunately Usersnap weren’t looking to make any acquisitions at the time, and recommended I try FE International, a service that brokers the selling of online businesses.

While I was looking into FE International in December 2019, I received an unexpected email from a long time follower of my progress with Saber named Steve. In the email, Steve asked if I’d be interested in selling Saber to him. The timing couldn’t have been better, and of course I told him would be delighted to sell as long as the price was right. I instantly liked Steve, and his plans for Saber. He is also a solo founder of a bootstrapped startup, and he wanted to keep running Saber as it is, with the goal of growing it.

Before any money was mentioned, I already had a number in my head. That number was £100,000 - roughly 3 x Saber’s annual revenue. I arrived at this number because 3-5 x ARR is usually quoted as the standard guide price for a SaaS business, and as Saber had been stagnating for a while, I felt the low end of that scale was more realistic. £100,000 would also allow us to put a deposit down on a house, and have good portion left over for future projects.

Knowing that, I could scarcely believe it when Steve’s opening offer was in fact 3 x Saber’s annual gross profit. As Saber has super low overheads, that worked out to be $134,151, or roughly £103,000 at the time. Not only had the offer to buy Saber come at exactly the right time, but the offer was also for exactly the right price. It was almost enough to make me believe in fate…almost. I loved that Steve made such a reasonable offer, and didn’t try to low-ball me. Perhaps I could have got a little more with some negotiating, but the offer was very fair, and even slightly exceeded what I was looking for, so I was more than happy to accept it.

Over the next three months there was due diligence, contracts, and asset transfers, which takes us to today. Saber is no longer mine, and I couldn’t be happier. Although my life isn’t totally Saber-free quite yet, I’ll be working with Steve over the next 6 months to help with the transition, and of course I’ll be interested to keep up with Steve’s progress in the future. Full disclosure - the deal actually worked out to be worth around £110,000 in the end, as the pound had weakened against the dollar over that three months. A nice little bonus, but as I was willing to accept £100,000, that’s how much I feel I sold Saber for, even though an extra £10,000 ended up in my business bank account.

So what now? The plan for the money is:

I’ve already got my next project lined up, and those of you who were readers of the Saber blog may be surprised to know it doesn’t involve programming, and isn’t any kind of tech startup. Keep an eye on this blog if you’re interested to see what that is, and how it goes.

- Matt

 
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