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Received an offer to buy out my web app, what do?

by Aruvin Chan
9 replies
I literally just launched my MVP last week and signed up my first few users, one of whom turned out to be an angel investor.

After exchanging a few emails about my app, he offered to buy out my app "as-is," since he'd have access to the talent, capital, and resources to really develop it.

What should I do?
#app #buy #offer #received #web
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  • Profile picture of the author Mark Singletary
    Originally Posted by Aruvin Chan View Post

    What should I do?
    Make sure it passes the smell test. Why would they want to take your app that is barely in MVP status and grow it big? Is it that great, unique, etc. (May take some honest introspection)

    How do they want to pay? If it's via any other method than Escrow.com or a legit escrow company I'd be wary.

    What are they willing to pay (the more they offer the more it could be a scam).

    What are your plans and desires for the app? Is it something important to you like your life's mission or is it just an app to make some money on the side.

    Good luck.

    Mark
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    • Profile picture of the author palmtreelife
      What are your plans and desires for the app? Is it something important to you like your life's mission or is it just an app to make some money on the side.
      OP - this is key for me. What was your business plan for this app? Did you map out a 6 month, 1 year, 3 year, 5 year plan?

      This is how I would answer this question: if the investor is offering 10x the money you are currently making with the app, but you firmly believe you can be making that same revenue in 1-3 years with plans for additional growth, I would not sell.

      I would keep in touch and build a relationship with the investor (after you properly vet them). You may be able to do other collaborations together that prove to be lucrative as well.

      What I would not want happen is have a business plan to start an uber company (for example) and have someone buy me out early on because I only had a couple of drivers, and then watch someone else build the same company I was going to build for fractions of a penny on the dollar.

      Be very careful of what you feel you are worth for your app.
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      • Profile picture of the author savidge4
        Originally Posted by palmtreelife View Post

        OP - this is key for me. What was your business plan for this app? Did you map out a 6 month, 1 year, 3 year, 5 year plan?

        This is how I would answer this question: if the investor is offering 10x the money you are currently making with the app, but you firmly believe you can be making that same revenue in 1-3 years with plans for additional growth, I would not sell.

        I would keep in touch and build a relationship with the investor (after you properly vet them). You may be able to do other collaborations together that prove to be lucrative as well.

        What I would not want happen is have a business plan to start an uber company (for example) and have someone buy me out early on because I only had a couple of drivers, and then watch someone else build the same company I was going to build for fractions of a penny on the dollar.

        Be very careful of what you feel you are worth for your app.
        Gotta keep in mind here the OP has onboarded a "few new customers" so 10X or a few years down the road mean absolutely nothing at this point.

        How much promotion have you done? do you expect a spike ( I am guessing not )

        Dude it comes down to this.. you are in essence a programmer. how much time do you have into this? Whats your time worth? and in THAT, you have a base number, and not a dollar less

        Thinking you can value something on "Projected" is a pipe dream at this point. IF you are signing up 10 a day at X dollars.. then MAYBE you have a number to work with, but from what you posted, that's not there You are left with TIME being the factor to determine value, and what you value your time as.
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  • Profile picture of the author newbiehelpinghands
    Hi there Aruvin Chan, this is great news that you have the chance to sell your app but you should really think about the fact that there is visible signs of value in your skills to build the app. You clearly have the skill to develop valuable apps so it may be worth thinking about growing the app to create more value or even think about duplicating the app structure to create more apps to sell.
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  • Profile picture of the author Medon
    It is very simple. You developed the app to make money isn't it? Some people refuse to take the box and they end up loosing money. Do not be naive take the money and think of developing another app.
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  • Profile picture of the author agmccall
    It all depends on the price offered, persons ability to pay, and whether or not you want to sell or grow it. I would make sure it is worth my while, get a lawyer involved and if it is something that you see growing exponentially then I would look into royalties or profit sharing for at least a few years after release

    al
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  • Profile picture of the author Adm4g
    Maybe he would be interested to look for more deep features and function of your app. When he has already access for talent, capital, and resources.

    So maybe, He would be interested in more but you think. He would be a good buyer so you should sell your web app.
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  • Profile picture of the author seocorporation
    It is common to feel this kind of excitement on getting interest from potential buyer but there is many a slip between the cup and the lip. Take it easy and control the frame and narrative. You are saying he is an angel investor. Are you taking his words at the face value or did you ask qualifying questions? Did you ask for his portfolio? What will he do after buying your app as mostly angel investors invest at a very early stage but they rarely run the company or buy it out instead they take a small stake.


    It can be s scam as well so beware and trod carefully. No one throws away there money so easily even his or she is ultra wealthy so do due diligence and then proceed.



    Since you are an entrepreneur, I recommend that you read the book named" The Art of Startup Fundraising: Pitching Investors, Negotiating the Deal, and Everything Else Entrepreneurs Need to Know" by Alejandro Cremades . It will help you about angel investing, fundraising, selling etc.
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  • Profile picture of the author NickNilchenko09
    Hello! Make sure that your are supported by your lawyer, I think it is really important. Be careful if you do not want to loose your web and money
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