What they ought to do instead of selling it, is pick an entrepreneur from their community and give him/her a go at running Sortfolio for a year or two with some kind of incentive based equity sharing deal.
I don't have any special knowledge about Sortfolio or 37Signals, but it seems like Sortfolio is really inconvenient to divest.
It's big enough that shooting it in the head seems wasteful (and potentially disappointing to existing customers). It's small enough that the opportunity cost of dealing with a sale quickly exceed the proceeds, and that sell-side advisors aren't going to be clamoring for the opportunity to help. And on top of that it's an unusual business, so traditional small business brokers don't know what to do with it.
The demand side has similar size issues, where it's big enough to be a large purchase for a random individual, small enough that it's unlikely to attract attention from strategic buyers with an eye out for acquisition targets, and unusual enough that a purely financial acquisition is unlikely.
I feel like you're on the right track, but again it goes back to value. The expected value from finding somebody to take over sortfolio, spin it into a separate entity, and then get 37s out of their ownership position probably isn't that much higher than the value they'd get from spending the time working on and marketing their key products and simply shooting sortfolio in the head at some pre-determined date.
Comments
What they ought to do instead of selling it, is pick an entrepreneur from their community and give him/her a go at running Sortfolio for a year or two with some kind of incentive based equity sharing deal.
I don't have any special knowledge about Sortfolio or 37Signals, but it seems like Sortfolio is really inconvenient to divest.
It's big enough that shooting it in the head seems wasteful (and potentially disappointing to existing customers). It's small enough that the opportunity cost of dealing with a sale quickly exceed the proceeds, and that sell-side advisors aren't going to be clamoring for the opportunity to help. And on top of that it's an unusual business, so traditional small business brokers don't know what to do with it.
The demand side has similar size issues, where it's big enough to be a large purchase for a random individual, small enough that it's unlikely to attract attention from strategic buyers with an eye out for acquisition targets, and unusual enough that a purely financial acquisition is unlikely.
I feel like you're on the right track, but again it goes back to value. The expected value from finding somebody to take over sortfolio, spin it into a separate entity, and then get 37s out of their ownership position probably isn't that much higher than the value they'd get from spending the time working on and marketing their key products and simply shooting sortfolio in the head at some pre-determined date.
It would also be a good way to invest in the Rework philosophy.