Entrepreneur + VA = Big Payday

Three stacks of folden coins

The number of companies acquired in 2011 has been huge. In the online and mobile sector alone, the value of firms acquired has jumped 52% versus last year.

And the payout to these companies that were acquired: a whopping $43.3 Billion.

Why do I tell you this? Because selling your company is the “promised land” for entrepreneurs; selling your company is how real wealth is made.

Now, the $43.3 Billion paid for these companies didn’t all go to the entrepreneurs who founded them. Investors and lenders took some of the money. And employees of the firms realized big gains too. But the biggest winners were the founding entrepreneurs.

In fact, 80% of pentamillionaires in the United States (those with a net worth of $5 million or more) are entrepreneurs who started and then sold their businesses.

Here are some acquisitions that have taken place in just the last few days in the online space alone:

  • Online global travel network TravelShark acquired eat.shop guides, a publisher of local travel guides
  • Social networking site Tagged.com acquired WeGame, a game discovery startup
  • MarketLeader.com, which offers online marketing and technology solutions for real estate professionals, acquired RealEstate.com
  • Women’s media company Glam Media acquired Ning, the online platform for building social websites
  • Google acquired the German daily deal site DailyDeal.de
  • Marketing company Vertive acquired CouponCodes.com

And the list keeps going.

Now importantly, I want you to understand why each of these companies were acquired for big dollars. Here’s the answer: each of these companies were acquired since the entrepreneurs who built them developed “VA’s” or Valuable Assets.

You see, whenever a large company considers buying a smaller company, they make a “build or buy” decision. That is, they think, “how long and how much money and resources would it take for us to build what that company has already built.” And then, they compare that answer to the price at which they could buy the company.

And when the larger company thinks that buying the smaller company is less expensive (in terms of dollars and time savings), they’ll buy it.

Now, what VAs or valuable assets do buyers want? There are 20 core types of VAs that buyers want and will pay dearly for, such as: products, customers, intellectual property and quality employees.

So, make sure that as you build your company, you focus on building valuable assets so that larger companies will want to purchase you, and you can reap the full financial benefits of being an entrepreneur.

Suggested Resource: “Million Dollar Exits: How to Build a Business You Can Sell for Millions” is a free webinar that provides online training in building a sellable business.