Located in Israel, buymystartup is a marketplace for buying and selling startup companies, products and technologies. Michael Lugassy is the founder of the platform and has been passionate about Web and IT development for many years.
Janina Benz: When I stumbled over buymystartup, it made me curious to know more about the participating startups and potential buyers. Could you explain your business model to our readers in a bit more detail?
Michael Lugassy: Simply put, we let entrepreneurs list their startup company, product or technology for free. They only pay a 1.9% finder’s fee if we get them a buyer. After initial submission and careful consideration, we follow up with some questions and start sourcing for deals through various networks. Some startups get spotlighted on our blog and social streams.
JB: How did you come up with the idea?
ML: Being more of a builder-entrepreneur than a seller-entrepreneur, I’ve always been drawn to developing new technology rather than marketing it. I ended up with a bunch of fully functional products lying around, but no one to push them forward. Some products were missing that final touch, some were selling nicely but could benefit from a greater sales force. Having used and witnessed the popularity of flippa.com and angel.co, I thought why not develop a marketplace for entrepreneurs just like me.
JB: Have you closed any deals yet?
ML: We are going to announce our first ever sale really soon!
JB: How many people are working with you on buymystartup?
ML: The people working on leads include the very best of my 400 close friends, as well as thousands of their contacts.
JB: What is your strategy for gaining awareness in the startup scene?
ML: Get enough entrepreneurs on board to list their companies, which now means going door-to-door and helping them submit. List only products with viable technology or teams to keep standards high. Use proceeds from sales to reach more entrepreneurs in more places, rinse and repeat.
JB: I assume it’s very hard to get potential buyers on board. Are you well connected to investors or buyers? What kinds of interested parties are potential buyers – big companies or private individuals?
ML: Actually, buyers that look for teams to soft-land or acqui-hire are pretty known and accessible (Luma Partners). The tricky part, we’ve learned, is to get entrepreneurs convinced and prepared for sale. We try to encourage them to speak openly about what is still missing and get the right price tag. Most of the time, they will be bought for who they are – the product itself is just the shop window.
JB: Israel is famous for its entrepreneurial spirit and IT startups. In your opinion, is it easier to found a company in Israel and to scale than it is in Europe?
ML: I think so. Israel is well developed, but too small to run any kind of scalable business on its own. This makes entrepreneurs think global from day one, and avoid the temptation to try to (eventually) stay local. The startup community here is extremely friendly, ridiculously close-by and very approachable. Israeli entrepreneurs who have “made it” to key positions become ambassadors and fuel our success further.
JB: How well is the Israeli startup scene connected with investors from Europe or the US?
ML: There’s an obvious Americanization not only in the startup scene, but also well beyond. Israeli entrepreneurs feel much more “at home” speaking to an American counterpart than a European. UK-based companies, investors and private individuals seem more open in terms of cultural sensitivity and accessibility . Not sure about other countries, but various initiatives such as CODE_n could probably help change that.