12
51 Comments

Is $40K a good price to sell my app?

First - my app is Snap Search

One line description - a browser for Android that helps you search the web safely without getting tracked online.

So this guy reached out to me via email and has offered to buy Snap Search and all related to it for a total price of $40K.

The current stats are such:

  • MRR: ~$200
  • DAU: ~700
  • Operating costs: $270/Yr

To be honest the price he's offering is very tempting (would help me personally) - but I have this gut feeling that I shouldn't go for it. It'll take me time to get a large enough user base to earn that kind of money (Took me about 9 months to reach todays stage) but at least I'll be proud of it being mine, and the achievement being mine. I'm not sure.

What would your advice be?

  1. 19

    I would 100% sell. Selling a $200 MRR product for $40k is an achievement you can call yours. Just my 2 cents.

    1. 3

      For a $200 MRR, 40K is quite a large amount of money. Don't take this the wrong way since I know it is your product/baby but you should vet that person first in case you don't know them well. Generally for small products like yours where MRR is less than $500/Month, you get like 3-4x multiple of revenue so like 10K would be 4x. 40K is 16x which sounds suspicious to me but may be that person really wants it.

      Vet that person and make sure it is not a scam. But if it is legit and you get 40K, its a hell of a sale.

      1. 3

        Ditto, exact thoughts! (Re multiple as well)

  2. 8

    No offense, but this is a personal thing. Different people will be happy / unhappy with this offer depending on their personal circumstances. You’re the only one who knows how you’d look back on it.

    If you’re asking if 200x MRR is a good multiple then yes, I believe it is. Regardless, the decision to sell is up to you.

    1. 1

      Thank you for the input. It does help!

  3. 4

    Definitely a very personal decision.

    Some factors to consider:

    • How fast is MRR growing? If you project 20k ARR (I know, not necessarily realistic, just an example) next year, then 40k may not be as appealing as it sounds.
    • If they're using it for their own privacy products, can you sell them a rebranded clone and keep your app?
    • What's your motivation for keeping it- because it's yours, or because you want to be an indie-hacker business owner?
    • If your goal is to be a business owner, ask yourself what's the most promising path forward- to keep working on Snap Search, or to start from scratch with your new experience on a new product?
  4. 3

    Don't be overly attached to your baby - that means is you should make the decision based on calculation, not gut feeling :-p.

    If you sell it

    1. How much money will you actually get after tax?
    2. How much money will you get after "paying yourself" for the 9 months of work?
    3. How long the "profit" pay for your rent and food so you can work on your next big thing during that time?
    4. Does that final amount make you excited?

    If you pass it

    1. Will there ever be another buyer a few months down the line?
    2. Do you have another idea that you are more passionate about to work on right away?
  5. 2

    Something to consider is if you can sell but still retain a stake like 5-whatever% and maybe secure an executive Level position within it. That way you aren’t tied to a one time sum and can still keep working on it if that is your interest. If you don’t have stock or anything the you can incorporate as a LLC and designate how much stock your company has. You can do so in a few days depending on your state and there are several online services that will handle everything for you. I personally like northwestern (think that’s the name) for incorporating.

  6. 2

    Ask for a higher price and see if that helps your decision :)

    1. 2

      I doubt I’m in a position to ask for more, I don’t have that good numbers.

  7. 1

    Two left-field anecdotes that may or may not be helpful (if you find the time to look into it) —

    • Rand Fishkin (moz.com) went through a similar dilemma in his book Lost and Founder (admittedly at a different scale, 50M). That chapter may be worth a read in the book, as it might provide a new perspective. Spoiler alert: he regrets turning the offer down but explains his thought process
    • Richard Feynman (yes, the physicist) talks about selling his art in his book Surely You're Joking Mr Feynman. Spoiler alert: in one chapter, he discovers that people buying his art brings him joy as the willingness to buy indicates that his art is worth something to someone

    ...but ultimately you'll know best 😊

  8. 1

    I would sell if the offer was legit and then with the money start working on the next big thing, honestly it could be your once in a lifetime chance to propel yourself to new heights don't you think? congrats!

  9. 1

    The choice is personal, but I would strongly consider it.

    How much do you really care about this app? Be honest with yourself.

    If I examine your reasoning "I'll be proud of it being mine", I'm flabbergasted.

    IT IS YOURS! You created it. Are you not proud of it now?

    Take the money and make something you REALLY care about. Unless this is that thing.

  10. 1

    woa - is it growing at a ridiculous rate for it to merit that kind of valuation? What is your guess where this business can be in a years time?

  11. 1

    Google wanted to sell "Google", but they got rejected. On the other hand, we tend to overestimate things which we built - see effort justification or Ikea effect.

    It is up to you. 40k can help you build something different & better. But it is hard to predict what will happen with your app, if there is potential. Only you know how you believe in that product.

  12. 1

    If you don't have the marketing skill to increase your biz fast, then it is good to sell. Use the $, experience, and skills to start another venture.

  13. 1

    That is a pretty great offer and outcome based on what you described. I wouldn't think you were an idiot for taking it.

    1. 1

      That’s nice to know, and honestly a welcome feedback 😅

  14. 1

    If you say no, what's to stop them from "Facebooking" your product and releasing their own version? Do you have secret-sauce that they can't recreate?

    Just playing devil's advocate here and asking what's the worst that could happen if you say no and don't sell it.

    1. 1

      That is a good point. But I’m not too afraid of something like that.

      1. they don’t have experience in the app space currently.
      2. too many browsers already , so competition isn’t difficult.
      3. yes there is some secret sauce (and even more of it in progress)
      1. 1

        Well, No. 3 totally change the dynamics of a deal. You could easily take those 40k and make a contract to work on new functions and "secret sauce" that they wouldn't know, in change of 25%-30% of further profits.

      2. 1

        Happy to hear it!

  15. 1

    That looks like an amazing product you've built, congratulations. There is an opportunity that may interest you, Mozilla Startup Studio where they'll invest $75,000 USD for 3.5% to help you to continue to build this. Applications are due next week Friday, June 5th. You can reach out to them on Twitter and they'll evaluate your product now, @mozillabuilders .
    https://builders.mozilla.community/

    I'm working on a project for the global legal industry that is very well aligned with this, https://www.verity.legal/ , a privacy-based browser with search, CMS, and more. I don't have a proof-of-concept yet, but I'll be applying to Mozilla and more incubators with my small team of lawyers. For sure I'd like to chat too 😊

    1. 2

      Thanks for the pointer! I’ve hit you and mozillabuilders up on Twitter ✌🏻

  16. 1

    With your current MRR it will take you 16-17 years to make 40K.
    Can you share your revenue growth precentage over the last months?

  17. 1

    Absolutely. That would be a great deal if you can do it and a massive success for your project.

  18. 1

    It’s your decision fam. Just let your hardwork speak.

  19. 1

    Sell it right away before the buyer changes his mind.

  20. 1

    It's up to you. How much did you invest in it? Time x Money? If it's worth it, go for it.

  21. 1

    I think you should ponder about these criteria:

    • Do you want to sell it?
    • Do you want the money?
    • How will you feel if you sell it? Will you feel successful if you sell it?
    • Do you have an alternative idea to start, in case you want to sell it?

    I highly recommend that you invest the time to think about it. You are not being forced to sell - nor to keep the app.

    Also, see if it is not some bogus buyer that is wasting a lot of your time. And if you decide to sell, be careful with the transaction.

    1. 1

      These are helpful pointers. Thank you for taking the time @rvitorper 🙌🏻

      The buyer is genuine though. I did that minimum research 🙂

  22. 1

    Seems over what it's worth to me, I would bite his hand off.

    1. 1

      Many have told me that 😅

  23. 1

    You could even sell it and get them to hire you to carry on working on it since you know everything about the app.

    1. 1

      Yeah that is something they have offered too. They’ve left it on me.

  24. 1

    At the current numbers, it's a great price to sell.

    If you really want this money financially, then you should sell. If you are comfortable growing this yourself for the next 2 years, then you can skip.

    But ask this question to yourself. What would you do with the $40k? Once you sell it off, what will you build/work on next. If that's more interesting that this app, then I would sell and focus on that with the extra money as investment.

    1. 1

      I don’t know what I would build next. I’ve spent the past 9 months working on this (apart from my full time role). So that’s a question mark.

      I am comfortable with growing this myself at whatever pace too. What a dilemma.

  25. 1

    To me it feels like you only entertain the idea of selling the app because it could help you financially in your current point in life (I might be wrong!), if you're really strapped for cash, do it. If you feel like you could get by without the $40k, and you think you can reach a higher MRR, hold on it.

    Just my two cents!

    1. 1

      You’re spot on with that - the only reason I’m entertaining it is cause it would help my situation financially.

      I’m hopeful about reaching a higher MRR. But I’m not sure how much of that hope comes from a bias 🤷🏻‍♂️

  26. 1

    First of all, congrats 👏🏼

    Second, I am keen to know your income model. Your app is free to download and use so how are you earning money out of it? Are there any in-app purchases or something?

    1. 1

      Thank you 🙏🏻

      Yup, there are in-app purchases.

  27. 1

    200x MRR? That looks good, really good.

    You can negotiate if there any alternatives to selling. To get the reason why he is buying and maybe there is another option you can come up.

    The craziest suggestion is to add some feature or work extra hard to grow it extra and sell it even for more but I have zero ideas if that is valid or if that is possible. It's up to you.

    Anyways, having such an offer is a win.

    1. 1

      He seems to be interested in it because he owns a company selling various privacy products.

      Yeah that's the internal debate going on. I never thought I'd have so much to do with something like a browser (kinda) but it seems like there's still lots of room for new features and improvements.

  28. 1

    Its definitely a great offer. You can invest that money somewhere and start another project with the skill and grow it using the return from the investment.

    1. 2

      Yeah, that is definitely one good use of the money if I take up the offer!

  29. 1

    How much further are you willing to push it yourself, with the $200 MRR? Can you see it reaching $2k fairly soon? If yes, hold on to it. If you have the drive/excitement/persistence and can see it reaching $2k+ MRR, hold on to it.

    1. 0

      Honestly, if this offer wouldn't have come up right now the plan was to continue to grow it. At the current rate of growth, it seems like I can reach that number in a year.

      1. 1

        What about a middle ground then? Maybe you can partner with the person who approached you, sell 50% and be a part of it while derisking? I'd check if they have good distribution channels they could use to scale it faster. If they do, I'd give up equity for time for sure.

        1. 1

          I’ve thought about that too. But I’m not too keen on a 50-50 thing. I’d rather be all in or just out. If I were to hold a stake in my app and then have to discuss things before continuing work on it, or discuss features etc etc all smaller things that would reduce my current speed of putting out updates and improvements.

  30. 1

    This comment was deleted 3 years ago.

Trending on Indie Hackers
How I grew a side project to 100k Unique Visitors in 7 days with 0 audience 49 comments Competing with Product Hunt: a month later 33 comments Why do you hate marketing? 29 comments My Top 20 Free Tools That I Use Everyday as an Indie Hacker 18 comments $15k revenues in <4 months as a solopreneur 14 comments Use Your Product 13 comments