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What Are the Three Main Categories of Website Buyers Today?

Posted by Paul Volen in Articles

Buyers today tend to fall in three main brackets when showing interest in purchasing a website. Selling your website could be something you are interested in if you have put in a lot of leg work to build up revenue of the company and are now looking to move into a new opportunity. Having a clear understanding of the different types of buyers on the market can make it easier for you to choose the right website broker to list your company with.

Private Investors

The first category of website buyers are private investors.

These could be partnerships, small teams, or individuals. These could also include buyers who are looking for extra income from an already established business to supplement their job. Individual buyers could also be looking for a way to make more money in general or to use the business to replace a job they already have.

For these buyers, financial performances are not always the most important metric considered. In fact, these businesses could be acquired based on personal interest and the buyer could be focused on the happy process of doing the work to improve the company that has already been established.

Private Equity Funds 

The second category of online website buyers are private equity funds. These funds have been entering the online market consistently over the last decade and are becoming more and more sophisticated and involved in the process. These are generally created on the principal that they will raise money from several different private investors, pool it together, buy a business, and then run it to deliver a return to those investors. The funds will vary in the set up for this structure.

Financial performance is one of the most important factors considered for private investors contemplating purchasing your business. Many private equity funds also tend to specialize so it would be hard to find a fund that uses numerous sizes of businesses with completely different business models. Instead you might be able to find a niche fund that has experience in your area, interested in purchasing your company.

Strategic Buyers 

The third category of online website and business buyers are strategic buyers. They usually have an investment or an existing business in a complementary or similar niche and can look at acquisition of your online company as an opportunity to enhance their existing assets. Furthermore, these buyers are focused on the benefits of the economies of scale and the synergies in at least two businesses. It can be difficult to pin down a criteria used by a strategic buyer to decide whether or not to make an offer on your company.

Many of the reasons for a strategic buyer to make an offer are not always financial. They could be interested in advertising partners, your email list or the existing team rather than the underlying profitability of your company. This means that you must be prepared to list the company and market it effectively with these details in mind. Understanding your target market could mean speaking with an experienced business broker about how best to prepare your company for online sale.