There are several ways to go about buying or selling a digital business online. With many available alternatives, BitsForDigits and FE International are consistently among the top contenders for owners and acquirers of online businesses.
The differences between the two are rather fundamental. One is a marketplace and the other a brokerage, so their cost and involvement in the acquisition process differ substantially.
This article will help you understand the differences between BitsForDigits and FE International so that you can choose the best option for your needs.
BitsForDigits was built to help founders of profitable businesses safely attract partial and full acquisition offers for free. After working in finance and tech, respectively, founders Laurits and Jan-Philipp realised that owners of bootstrapped businesses struggle unnecessarily when it comes to personal liquidity events.
Their solution? A platform that facilitates introductions between owners and acquirers with the functionality to advertise full sales as well as minority and majority stakes anonymously. The requirement to list on the marketplace is for the business to generate a minimum of $100K in revenue annually.
BitsForDigits does not become involved in the acquisition process but connects buyers and sellers directly with no unwanted middlemen.
On the other hand, FE International is a registered broker and global M&A advisor for SaaS, eCommerce and content businesses. It was founded in 2010 and houses a team of advisors and experts that handle all aspects of the acquisition process.
The company markets its services to mid-market operations and usually lists assets valued between $25K and $1M. However, it has helped companies of all sizes to consolidate.
Similarly to BitsForDigits, FE International isn't the right place to sell small projects and failing businesses, and its buyers are professional and more experienced who are looking to acquire profitable and sustainable businesses.
In return for doing all the heavy-lifting, FE International charges significant fees, which we've explained in detail, below.
The most significant difference lies in the fact that BitsForDigits is a marketplace, whereas FE International is a broker. But what does that mean for you, as a buyer or seller?
Well, using a broker means you definitely have less control over the process. FE International has a team of M&A advisors they advertise as available to guide you through financing, due diligence, valuations, negotiations, etc.
The problem that often arises with brokers, however, is misaligned incentives. How do you know if a broker is serving the interests of the seller, buyer or themselves?
At the end of the day, brokers receive a 10-20% cut for every deal they close, so although they may claim to offer a thorough and high-quality service, are they just trying to close a deal in the least amount of time?
Most of the work is conducted behind closed doors, so you'll never know if it's in your best interests.
On the other hand, BitsForDigits is a marketplace that connects buyers to sellers. We don't get involved in the acquisition process, so you're free to craft the best deal on your own terms.
Once you create an account and get in touch with a buyer or seller, there is no obligation to move further ahead in the process.
Understandably, you may require assistance at some point, but don't worry; we have an advisor directory for expert advice on valuations, negotiations, legal, tax, accounting & due diligence, and a free valuation tool covering eight different business models.
It's fair to say that BitsForDigits brings transparency to quite an otherwise opaque private market process.
For a business owner or founder seeking personal liquidity, a full acquisition isn't always the best option.
It's normal that you're anxious about your company's long-term sustainability as a founder. What may occur in a month? Or maybe next year? What about in five years?
Having all of your wealth connected to a single, vulnerable asset (your company) is a concern that practically every startup founder is aware of. But are you willing to relinquish all control over the company you've worked so hard to build?
If you answered no, our platform provides a solution. BitsForDigits is the first online acquisition marketplace that permits both partial and full acquisitions.
Our platform makes it simple to sell minority and majority holdings in your business, allowing you to liquidate a portion of your ownership while retaining potential upside and influence.
FE International, on the other hand, only provides for full acquisitions. It's all or nothing.
We do not charge a commission on the sale of your company. You read that correctly. The cake is all yours to eat.
BitsForDigits continues to be free for any owners who want to list their company on our marketplace. In the near future, we will charge buyers a subscription fee to join our marketplace and swiftly connect with sellers of lucrative online businesses.
FE International, however, takes a hefty 15% sales commission that the seller pays. The sales commission decreases for larger deals in the mid-6 figures. FE International also has a 2.5% buyers fee (maximum $1,000). They are the only broker that charges a buyer's fee.
We worry that this commission fee discourages larger M&A deals from listing on the marketplace, leaving buyers with poor quality deal flow—another reason we don't take a commission.
BitsForDigits and FE International both offer state-of-the-art solutions to buy or sell online startups. The difference lies in transparency, the option to partially acquire a business, transaction fees and the caliber of buyers and sellers.
So is BitsForDigits a great FE International alternative? Well, it depends on who's asking.
BitsForDigits is a startup acquisition marketplace that's great for business owners looking for acquisition offers while retaining 100% of the proceeds.
FE International is an M&A advisor that's great for buyers and sellers who want a helping hand throughout the entire process.
Interested? Learn more about BitsForDigits here, or sign up here.
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