Another Startup On eBay: Why This One Is Probably Worth The $90k Starting Bid

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Another Startup On eBay: Why This One Is Probably Worth The $90k Starting Bid


If you’re a regular reader of you’ll know that every now and then I diverge from my usual “advice for startups” theme and talk about specific news and other industry stuff (still usually related to startups).

As such, I’ve had a series of articles looking at the trend whereby startup founders place their companies for auction on eBay (most common reason is that they are no longer interested in the project and they want to find a more suitable acquirer to carry the company/project forward).

In part because of my past articles, one of the founders of CrispAds (which is up for auction now on eBay) contacted me.  I exchanged some notes with Hans to discuss the auction.  If I were a real writer, some might call this exchange an “exclusive interview”.  It was exclusive, and it was an interview, but I don’t have a journalism degree, so let’s just call it what it is:  Some questions I had, and that Hans was brave enough to answer.

ANTI-DISCLAIMER:  There is nothing to disclaim.  I have absolutely zero conflict of interest.  I don’t know Hans, his company, his investors (if he has any) or his customers.  I have nothing to gain or lose regardless of whether Hans is able to sell his company or not.  It simply struck my curiosity. 

For the rest of this article to make sense, you should probably look at the eBay listing (I’m not going to repeat the basics here).

Hans and his partner Cadman have built the company over the past 18 months and it now has an inventory of over 300 million impressions per month (once again, not bad at all).

Revenues/Profits:  I asked as to what kind of revenue or profits the company was generating (didn’t think I was going to get a “crisp” answer, but hey, it doesn’t hurt to ask).  Their position is that since they are currently only monetizing about 10% of their inventory, and the current team is good at finding a need and meeting it – but not good at sales or monetization.  But, their trailing 6 month revenue is about $100,000.  Not bad.

Technical Platform:  PHP, MySQL, Apache.  No big surprises here (note to readers:  If you were on the “buying” end, ask yourself how their choice of platform influences the value of the company to you). 

Keeping The Lights On:  I asked about how likely it would be for the acquirer to at least “keep the company running”.  If I were the buyer (which I’m not), I’d be worried about having knowledge of the system so that things didn’t crash and burn before one of my team had a chance to learn how things worked.  They’re providing a 3 week transition period and Hans believes that should be sufficient for someone to get up to speed.

Non-Compete:  I asked about whether or not they would be wiling to sign a non-compete with the acquirer.  That is, what’s to stop them (the founders) from repeating the same exact business after selling the current one and essentially competing with their old product?  Seems the founders are ready to “move on” (they tried the advertising thing, and don’t have issues “moving on”).  If I were an acquirer, I’d take them up on this and get some type of non-compete.

Motivation For Exit:  When asked why they were selling the company, the response was similar to what we’ve heard before:  “We are the wrong team to take this to the next level.” 

Why Sell On eBay?  “We talked to potential acquirers.  They were looking at the deal from an inventory acquisition point of view.  eBay makes sense because we can get in front of as many people as possible.”  Not sure I agree with them that eBay is the best vehicle for finding the right acquirer, but it worked for Kiko, and might work here.

Overall, I think this is an interesting opportunity for someone that is looking to get into this space, or extend an existing offering.  They seem to have created some traction.  Not sure what the right valuation is, but that’s for the market to decide.  If I had the time and energy, it’s probably something I’d look at seriously, but I already have too much stuff on my plate (including my own startup), so will demonstrate some discipline here. 

I wish them luck.  Always refreshing to talk to entrepreneurs that are candid and straight-forward.

Posted by on Wed, Sep 20, 2006


The word "startup" implys that the business has only just began it's life....

The domain was registered: 08-Sep-2004... the companies copyright is 2005 on their footer.

How old do you have to be to not be considered a startup by a blog like yourself? These are oridinary companies selling their sites, it happens everyday to hundreds of sites...

posted on Wednesday, September 20, 2006 at 4:30 PM by Jay

Jay: Good point. I'm not really sure what the defining line is. I ran a software company for 10 years, and through most of that time, we still thought of ourselves as a startup.

It is also easier to say "startup" than "small, privately held company". Besides, if I didn't label them as startups, I wouldn't be able to rationalize why I'm writing about them. <smile>

posted on Wednesday, September 20, 2006 at 4:36 PM by

I think that the term startup applies more to the status of the company's products than to the age of the company.
We've been around for two years, but we're still a startup since these two years have been invested in development and investigation, and our "commercial" life has just begun.
Another interesting definition of startup can be found at the WikiPedia.
On the subject of startups being sold at eBay, I think that the answer "we're not the right team to get this to the next level" can be reasonable, but I would prefer to hire the right team than to sell the company when it will mean such a small return of investment ($90K is just a fraction of the money we've already invested, not counting the effort and restless nights).

posted on Thursday, September 21, 2006 at 5:49 AM by Narciso Cerezo

oops, seems to be the wrong way to insert links, I'll try again:

posted on Thursday, September 21, 2006 at 5:50 AM by Narciso Cerezo

Off Topic. You need a search on this site. Why don't you have one?

posted on Thursday, September 21, 2006 at 1:57 PM by Stacy

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