Why sell a profitable website

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It isn’t time to start celebrating (Pretheory doesn’t have assured success yet) but we have closed our first round of funding. The best part of us closing this deal is that we got to keep all our equity and secure funding that should ensure a beta release. After our beta release, it is likely we might have to start seeking funding again if we see the chance for rapid growth. That said, it is nice to know that our company will have enough money to at least bring the initial version of our vision to the market.
How does a startup acquiring funding without giving up equity? We didn’t take loans, beg family, or empty our retirement accounts (although up to this point, we have been self funded from our savings). Instead, we sold a small website that we have been slowly making money from for awhile. We found a company that was interested in growing and expanding in that market. So we sold the asset for the revenue it would make over a couple years to get access to that money now.
Since we started, Pretheory has run a older website because it made us a profit. When we began negotiations for selling the site, many people questioned our motivation to sell a small and profitable website that takes relatively little time to manage. In a future post we will explain about negotiating and closing the deal. Here we will focus on why we sold our site in the first place.
The site didn’t take much time to manage, but did require more task switching. If your trying to keep an entire program in your head, it becomes much harder when you have to switch to another task for 30 minutes a day. Task switching can hurt your productivity even more when the time of the switch isn’t always in your control. Sometimes meetings about the site, traffic spikes, or interviews would occur in the middle of the day. Many problems that arise on a site need to be dealt with quickly. Being able to properly focus on a problem is a major gain for a small team that already has to work on many different tasks infrastructure, marketing, application code, and others.
Selling the site also makes sense for us financially right now. The site does make money, but not enough to maintain a company. If we want to succeed as a company we need to focus on something with a larger potential profit. If we could make a decent amount of money from this site, but it would take years to amass a significant sum. There are many advantages to selling the site to get access to the majority of that amount now. We have costs related to developing and releasing our new product Seekler, and getting the funding to get it to market the way we would like as soon as we can could be a huge advantage. The financial growth of the old site was rather limited, even if we worked to expand the site’s offerings, while our new product has a far larger market potential.
While it might seem scary to give up our only current source of income, you can’t create the future when you’re holding on to the past.

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One Response to “Why sell a profitable website”

  1. erin Says:

    Great last line. Congrats on the sell, I think it was a good call. Go seekler!

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