"Based on the success we are able to achieve" suggests, to me, you are looking at a price that will be tagged to an earn out provision. In other words, the price of the deal will be contingent on you achieving specific revenue targets in the future. If I'm reading this wrong, please correct me...
First define "successful" and make sure others would see it as the same. If growth is stagnating, that's not what success looks like in an app. The only way you have a chance at selling it at anything above "fire sale prices" is you can say that you have enough actively engaged users, which i...
Hi, what a great question. I can see that you're trying to figure out how to maximize the value of the business by putting yourself in the buyer's shoes. I've been evaluating small and medium sized business since 2009 and I've helped to sell hundreds of them. Check out www.HowToSellMyOwnBusine...
We normalize the income statement, compare with other frozen food companies that have been sold, then make an operating capital adjustment based on the type of sale foreseen. It all comes down to cash flow. (assuming you're making money) If you'd like to discuss this particular case just arrang...
Don't Outsource. Period. While there are big drawbacks with outsourcing related to building internal expertise the real reason I would never outsource at your stage is the need for speed and flexibility. Per your description, you are an early stage start-up with a MVP that is gathering data....
I can tell you that this proposed structure will significantly reduce NewCo's ability to raise additional capital. The idea too that the startup's valuation can jump from less than $200,000 to $10m just through the creation of an MVP in a relatively short period of time is also unrealistic. If ...
If you want to find it yourself, Pratt's Stats would be the place to start. But more than likely you want to talk to a valuation expert that's done hundreds of them. I've done that for hundreds of agencies, but never for your tyoe of firm. If your firm is small, you must normalize your compensat...
There are three questions here: - the strike price of the options - the market value of the company - how much those options are actually worth to the recipient 1. The strike price is the price people pay to exchange their options for shares. You can set any strike price you like: it's just a n...
So you're saying that your business is a service business like auto repair, home buying, or any of millions of businesses that have existed for many many years. This is not a problem. Businesses like yours are bought and sold every day. The secret is a track record of profitable cash flow and ...
Ultimately, it depends on the value the app has for the buyer (not how much money you put into developing it). Unfortunately there are many reasons for a buyer to purchase an app and so there are many ways to value an app (a multiple of yearly revenues,number of active users, etc.) . A good solut...