WEB Hrm, how to price for a buy out? :o

Discussion in 'OT Technology' started by hsmith, Jan 6, 2010.

  1. hsmith

    hsmith OT Supporter

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    So, I was contacted today about interest in my iPhone App - they asked about several options and really I'd rather sell it outright then deal with SLA's and shit.

    I really haven't made much with it yet - it has moved but meh. I'd rather rinse my hands and move on to something else.

    Anyone have advice for this with this kind of thing?

    Would the easiest be to figure out what it would cost them to develop and deduct a %? I mean it took me 4 months and Iknew what i was doing :o

    :o :x:
     
  2. BlazinBlazer Guy

    BlazinBlazer Guy Witness to The De-Evolution of Mankind.

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    Why not sell licensing and distribution rights? I know it kind of depends on what the app does or what kind of back-end systems you have to maintain for it but you might find yourself making more money by holding on to the main rights to it.
     
  3. ge0

    ge0 New Member

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  4. mj1133

    mj1133 Active Member

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    What kinda app?
     
  5. hsmith

    hsmith OT Supporter

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    eh, i'd rather not have to deal with all that crap :o

    probably could make more cash that way, but i figure it would be a solid payout to just sell all rights away.
     
  6. hsmith

    hsmith OT Supporter

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    i don't want to post (i've deleted all the previous ones referencing it) - thanks to OT's new "fun" ideas to fuck with peoples personal lives :greddy:
     
  7. symptic

    symptic I run companies

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    Optimize your revenue model and show a reliable growth before considering selling. Entertain an offer but withhold temporarily while you tidy your systems and make it a seamless process to transfer ownership. Start high; make them negotiate you down rather than you negotiate them up—with freelancing, I often quote a client 2-3x as much as I need the project to make. Often, a client will agree to the original price, and when they don't I still make twice as much as the comparable talent.

    This relates to you because negotiating is always the same. You lose your leverage, you come out burned.
     
  8. Ricky

    Ricky █▄ █▄█ █▄ ▀█▄

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    i think thomor has sold companies in the past

    maybe he'll come in here and share his input. try pming him.

    I know he had the phpbb forums and a pet store :dunno:
     
  9. thomor25

    thomor25 I make money online....

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    I already talked to him about it, dude is about to make some cash
     
  10. BlazinBlazer Guy

    BlazinBlazer Guy Witness to The De-Evolution of Mankind.

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    So he's about to have more monitors on his desk than you? Quick, time to remodel the office again! :noes:
     
  11. hsmith

    hsmith OT Supporter

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    Thanks for the input guys. thormor has been around the block :naughty: - so he dropped me some good advice :o

    I dropped Intellex a line too since he has sold some software in this fashion as well.

    I'll keep you all posted as things progress (if it goes anywhere). I really didn't expect this to happen, so it is a bit out of the blue (hell, i write software to keep myself entertained).
     
  12. tryfuhl

    tryfuhl New Member

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    yeah I was gonna suggest holluring at intellex

    best wishes
     
  13. Tony Stark

    Tony Stark John McCain has an illegitimate mexican baby

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    are we talking 4 figures? 5 figures? 6 figures? 7 figures?
     
  14. hsmith

    hsmith OT Supporter

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    mid 5's and up i am guessing.

    depends how bad they want it :o - it is a $40b company, so if they want it they will buy it :o

    :x: if not, there are a few other i can shop it around to.
     
  15. hsmith

    hsmith OT Supporter

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    Biggest thing this week has been shopping for a lawyer and talking to my CPA. Biggest problem I have it has been on sale for only 20 days - so long term capital gains would normally be out for a typical product. Since it is IP, you get some other protections that could bump it into long term capital gains.

    If you are selling a patent, you have LTCG as soon as it is invented. "Trade Secrets" can also be lumped into this - but it depends how the deal is structured.

    I'll post more up about that after I talk to the LOLyer and CPA. I am sure plenty here would be interested.

    And ugh, every god damned hour with a layer is basically a Glock

    :wtc:
     
  16. thomor25

    thomor25 I make money online....

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    you are talking to the wrong lawyer mine charges 150 an hour unless you were there for more than an hour. Also reply to my pm I sent you i got some ideas for the app that will make them want to buy it but we'll discuss that.
     
  17. blue_fox

    blue_fox New Member

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  18. Insert Tokens

    Insert Tokens Making Cancer My Bitch OT Supporter

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    Good luck..
     
  19. hsmith

    hsmith OT Supporter

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    $400 for a partner, $175 for an associate

    :rofl:

    :wtc: wrong line of work
     
  20. hsmith

    hsmith OT Supporter

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    ugh. talked to them today - they want it. but, they gave no help with valuation. I'll basically be "bidding" against some Indian development firm. So, major advantage I have is that I am "turn key"
     
  21. tryfuhl

    tryfuhl New Member

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    mother fuckers
     
  22. frank the tank

    frank the tank New Member

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    Take your yearly profit and triple that for a selling price.
     
  23. pharmokan

    pharmokan OT Supporter

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  24. hsmith

    hsmith OT Supporter

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    Just sent out my valuation. We will see how it goes :o

    I basically took 900 hours it took my to develop it * my bill rate and arrived at
    my figure. While it is high, they are also thinking of outsourcing, so I know I am 3x as much as that would cost.

    But, I am feature complete, I am stable, I am turn key. Quite a few risks going with an offshore firm.

    My boss used to do valuation and told me I should be asking $150,000-250,000 but that's totally out of what I think is reasonable. Then again, he did get paid for that kind of thing lol. Basic reasons for asking 3-5 times what you think are as listed above, developing new software is risky - you are buying risk mitigation.

    I'll be happy if they come in at half my offer, but if they flat out say no, I'll be sending letters to their major competition the next day :mamoru:

    it's been a stressful process, but we will see how it goes in the next few days.
     
  25. SLED

    SLED build an idiot proof device and someone else will

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    good luck :bigthumb:
     

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