How are startups actually sold?

You know what’s funny about starting a company? Even as you are just beginning – assembling a team, searching for funding, building out your product – you are often asked to think about ending it.

“Nice idea, but what’s your exit?

Elizabeth Yin had a lengthy conversation about this topic (among others) with Andrew Gadzecki in 2023. Andrew Gazdecki is the founder of, an online marketplace for buying and selling startups. He’s also gone through the process of selling his own startups more than once, so he is actually the perfect person to answer the big question.

How are startups bought and sold?

Well, one of the first myths that Gazdecki is quick to dispel is the idea (hope?) that buyers just materialize when you need them. Instead, getting acquired is much like getting funding or making sales – you need to find potential buyers and funnel them through your process in order to give yourself the best chance for success on the best terms.  

So let’s say you’ve identified a few potential buyers and are getting that process started. What do the steps tend to look like?

Kick Off

The kick off call is usually a high-level, getting to know each other session – both personally and professionally. Personally, you want to show that you’re open to the ideas of others, easy to work with, and able to answer questions honestly, without getting defensive.

On the business side, you want them to know what your company does and some possibilities for where it could go.

Gazdecki is quick to note getting acquired requires a certain amount of goodwill between the parties.Things crop up along the way – requests for updated or brand new metrics, the VP of Strategic Partnerships getting replaced midway through the process, etc – this is where having a relationship of mutual respect helps you weather anything that may arise going forward.

Documentation, including a deal timeline

Documentation in this case includes things like a Confidential Information Memorandum (CIM), your financial statements, and due diligence documents. This is where you get into the details of things like go-to-market strategy, customer acquisition and retention plans, company and growth data, and everything else that makes your business tick.

Creating a timeline establishes when certain milestones will be hit – for example, when you’ll provide your financial documents or when the buyer will provide a letter of intent (LOI). Having this timeline keeps everyone involved accountable.

Evaluate offers

Part of the reason timelines are so helpful is because they funnel buyers into getting you what you really want – multiple offers. Multiple offers means you have leverage to negotiate. As you look at offers, evaluate them not just by the number of the purchase price, but also by the details of the purchase. Look at cash vs. stock, what earn-out periods look like, if there are any conditional hold-backs or other clauses that might not work for you and your company.

Sign the final paperwork and complete your sale

Congratulations! You’ve just sold your first company.

Want more?

Elizabeth and Andrew dove deep into the whole process behind getting acquired. Setting yourself up for success early on, finding potential buyers, positioning your company, negotiating the deal, and more.

Highly recommend watching it here.

This article was written by Carolyn Abram, a freelance writer with a passion for technology. She also writes fiction and teaches writing classes in her home of Seattle. You can learn more about her at her website or on LinkedIn.