September 13, 2018

How much should I sell the my site's code for?

Hi,

I'm a 4th year maths student from St Andrews University in Scotland and have recently created an online statistics community called Black Swans (www.blackswans.io).

Somebody from Holland recently asked me whether he could buy the code for the site because he liked the design. I was wondering whether anybody could give me any guidance on how much I should charge him for this?

Thanks for any help,

Jack


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    Now that is an interesting question.

    My first piece of advice would be not to let yourself be bounced into anything. The very first question which I bet you have neither asked nor answered is "What am I selling?".

    Be aware that there is a difference between licensing software and selling your copyright.

    If you sell your copyright in the code, it means you have no rights over it whatsoever. It no longer belongs to you. It is exactly the same in law as if you were to sell your bicycle to me. Once the sale is made, you have no right ever to use that bicycle again unless I say you can because the bicycle now belongs to me.

    So you need to know what you are selling. Assuming you can foresee a time when you would want to deploy your software again at another time or in another setting, then you do not want to sell your rights to use it for your own purposes.

    Which brings us to licensing. A licence is a licence, right? Wrong.

    I am not a lawyer so you need to understand that what I say here is true but not neessarily all there is to know. I'm writing to alert you to things you need to think about, not to tell you what to think.

    At the most basic, a licence can be for any period you like, up to and including the lifetime of the licence holder or even beyond. That is up to you.

    A licence can have conditions attached. In the merchandising world, for example, it is common to put "conduct" clauses in place. You can imagine Disney not being too pleased if they licensed the use of the Princess Ariel brand to someone who said they were going to make children's satchels but decided to make Princess Ariel vibrators instead. Disney would need some way of revoking the licence in the case of abuse.

    A license can be exclusive or non-exclusive. If you sell an exclusive licence, then, for the lifetime of that license, you can't sell your software to anyone else if you ever wanted to. A non-exclusive licence gives you the right to license your software to as many people as you want.

    You might want to think about reseller rights. Can this Dutch bloke sell your software on to someone else or not?

    So your simple question has a lot of potential ramifications even before we settle on price. I can't advise you on how much to sell your software for because I have no idea what the market value for it might be.

    However - here's a thought. If you are still at University and if you have good contacts with the staff / other faculties, then you could propose the idea as an evening session to throw around as a practical exercise. This is actually a multi-disciplinary problem for the accountants, commercial lawyers, business studies students and economists. It might make for a very instructive evening's education as everyone brings their expertise to bear. Would your tutors be up for arranging such a session? Each faculty would learn an awful lot from the others just bashing this around. We have finance, international trade, legal issues and valuation issues for a start.

    That might be something to think about.

    At the very least, however, take some advice on copyright versus licensing. The price is the least of your troubles.

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      Thank you so much @thomasm1964 - your advice is incredibly useful.

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        You're welcome!