A Website Broker is a Matchmaker and Advisor
A website broker is essentially a matchmaker. The primary job of the website broker is to match 2 sides in a deal. The task is to match a buyer with a seller.
If the broker’s client is the buyer, then he must match the buyer with a seller. If the broker’s client is a seller, then he must match the seller with a buyer.
Once a match is made, then the broker becomes an advisor. He advises and guides the client through the sale or purchase process. This is both an art and a science. The matchmaking phase is the most important part. Until a match is made, nothing happens.
There must be a motivated buyer and a motivated seller for a deal to happen.
Whenever a website is available for sale, there are always a lot of tire-kickers and unsuitable buyers who come along. A good broker must use his experience and intuition to screen these leads.
Unlike in real estate transactions, where a real estate agent may request that every buyer be qualified by a financial institution, in website sale transactions, this is not often possible. As such, a website seller cannot know for sure whether a potential buyer can afford to acquire the website and close the deal.
After years of experience, a knowledgeable website broker can quickly and intuitively eliminate potential buyers that he knows will never buy the website. It saves the seller a lot of time and headache.
Different types of websites available for sale require different types of buyers. Most website brokers should have a list of website buyers that they have accumulated over time. However, a website deal only requires 2 motivated parties. As such, having a large database of thousands of buyers does not guarantee that a seller will find a buyer match in that sample of buyers.
A generalist website that can be operated by anyone with basic general website business experience will generally benefit from being presented to a large database of buyers. There’s a higher chance that 1 buyer within that sample of buyers may be the right match for the website.
On the other hand, a specialist website that requires specific specialized knowledge to operate doesn’t always benefit from a large database of buyers. The reason for this is a large database of buyers tends to have more generalist buyers than specialist buyers.
In the case of selling a specialist website, it is always best to present the website to individual buyers in that niche. This is where a website broker who has personal relationships with these individual buyers is the best option.
Simply sending out an email blast to a large database of buyers may not provide any real value in such a situation. Generalist buyers will simply ignore the specialist website opportunity.
A specialist website for sale requires specialist website buyers in that space.
For example, at our firm, because we’ve had so much experience buying and selling game portals, we have developed strong personal relationships with game website sellers and game website buyers. Thus, it makes it easier for us to quickly present a game portal investment opportunity to specific investors in our network.
The Art and Science of the Website Deal
For a website broker to match the right buyer with the right seller of a website is both art and science.
A good website broker must understand human psychology as well as the financial and legal fine points of a website sale.
The Art
For example, a broker advises the buyer or seller during negotiations. This is often actually more psychology than science. When a website seller lists his website for sale, very often sellers set unrealistic asking prices. It is the broker’s job to advise the seller in order to present the website to buyers at a more reasonable price.
In addition, many website sellers get very emotional during the negotiation process. Most buyers make offers that are below the seller’s expectations. This can cause sellers to get angry and want to walk away without realizing that it is part of the negotiation process. It is not personal. This is where a broker has to step in and be the voice of reason in order to find common ground between both parties.
The Science
For example, a good broker advises a buyer or seller on the legal fine points involved in a website sale process. These include preparing the prospectus, letter of intent, website purchase agreement, and acting as a go-between between the buyer and seller.
All legal documents, of course, are always reviewed by the attorneys of the buyer and seller. But, in most cases, it is the broker who provides the first draft of these agreements to both parties. The draft is then customized by the attorneys. This generally helps the buyer and seller spend less money on legal expenses.
In larger complex website sale transactions, the broker also acts as coordinator of the buyer’s team and the seller’s team of advisors. These could include attorneys, accountants, and lenders or investors. The broker coordinates information between these team members.
Which Website Broker is right for you?
Finally, as a website buyer or seller, always choose the website broker that you feel most comfortable with. This is more art than science. It is a feeling that you have. You will probably work on the website sale with this person for a few weeks or even a few months. So, select a broker that you would enjoy working with.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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