
Ask HN: How much can I sell my app for? - appthrowaway
I have a pretty niche app that&#x27;s making about $400k&#x2F;year on iOS, and a big company has reached out to me and asked to acquire my app.<p>I&#x27;ve done almost zero work for the last year (only a few days to make it compatible with iPhone X and iOS 11) so that&#x27;s pure profit. My keyword ranking is pretty good and I don&#x27;t see the revenue dropping.<p>So my question is, how much should I ask for, and how much I should expect realistically?
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relaunched
BigCo isn't buying you for the $400k per year. Try to figure why they are
buying you and work from there. Figure out what your number is and what you
think their strategic value of your app is to them. That becomes the floor and
ceiling for your negotiations.

The best way to know what you're worth is to engage an investment banker that
knows there space, If your app is worth acquiring, there are several other
companies that might want to acquire it. A banker's job is to bring those
folks to the table and get you the most money. This sounds like a good
engagement for a niche bank.

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matt_the_bass
How does one find a reputable banker? I’ve come across a number of them in my
industry, none of whom I’d trust as far as I could throw them.

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relaunched
This is where networking comes in. Find people that have sold businesses, work
with connected law firms, investors, etc. Also, people that run / work at
mature incubators or bigger vc firms would be a good place to start. Now that
I'm thinking about it, people on the BD / corp dev side of BigCos would
probably know who good bankers are.

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lsiunsuex
"I have a pretty niche app that's making about $400k/year on iOS"

"I've done almost zero work for the last year"

Really, why sell it then? That seams like a pretty nice buffer from a day job.

Otherwise - try to calculate growth month over month and project the growth a
year or 2 into the future minus what your hourly rate might be at a comparable
day job to maintain it and ask for the $ you get at the 2 or 3 year out mark?
I think I'd be happy with that figure.

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appthrowaway
Because a big chunk of guaranteed money is pretty nice :).

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saluki
Congrats, very nice.

I would contact
[https://feinternational.com/contact/](https://feinternational.com/contact/)

They have helped sell web apps for others on HN, they do broker iOS apps.

I expect you would sell for 2x to 4x annual profit.

If it's growing or even flat I'd think about keeping it. Even if you stay flat
for 5 years and then tail off you would come out ahead vs selling it now.

If it's something you think could disappear or lose revenue in 12 to 24 months
if you don't put more time in to it selling it is probably a good idea.

Good luck with the sale (I'd keep it though)

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jackgolding
yup i'd contact these guys or empire flippers, they have a great rep!

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gpresot
Really? 2-3x Annual profit? that seems very low. In mature industries (with
stable, low single digit growth) acquisitions go for around 2 times revenues,
but the real multiple is usually on EBITDA and can easily be 8-15x. Why would
you sell for 2x profit? Once you subtract capital gains, you's be at 1.5
annual profit: you'd be better off hiring a developer to run it and go on a
permanent sabbatical.

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staticautomatic
Most people don't get fucked in acquisitions/sales by not receiving enough
money. They get fucked on the terms of the deal. Get a good lawyer! I can
recommend a fantastic one in SF if you're interested.

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eb0la
Usually you can get 1.5-2.5x anual earnings selling a business.

You won't get mire than 3x if 1) they amortize buys un 3 years and 2) they
don't expect growth (which is rare).

While you are negotiating most people try to get more customers or get up the
average ticket upselling stuff, etc. because it gets valuation up specially if
your earnings are not the same every month (summertime, hollidays).

Also think how bigco is going to recover the expense of the app: might work
for you, too.

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bsvalley
$400k/y not dropping tells me that you’re on to something pretty solid. Your
business model has been more than validated. If I were you I would not sell at
all unless it’s for 10x the money. Since it’s not possible :) I’d try to 10x
my revenue if I were you. That might be doable. Hire people, build a team,
scale from there! So much more interesting and rewarding.

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naim08
If you want to sit down and talk about how much your app is really valued at,
would be more than happy to help (have experience in valuations)

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oldsklgdfth
This is a helpful short book on things to consider when pricing software:

download.red-gate.com/ebooks/DJRTD_eBook.pdf

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drrob
To be fair, if you can get 1.5x you'll have done well. Aim for 2x and be
willing to get negotiated down.

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segmondy
Well, if you are serious about selling? Why not also find other buyers and
also solicit bids?

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RikNieu
I'd sell for 3x annual profit.

