I’d be happy to take your money, if I only knew how much to take.
February 14, 2010 3:15 PM Subscribe
I created an iPhone app that a company wants to buy. Now I need to figure out what the app is worth, in order to evaluate whether their offer is acceptable. I know a little bit about product valuation, but I also know that valuation is pretty market-specific, and most of what I know, or can learn, doesn’t entirely translate to the iPhone app market.
Does anyone know a good article or book that might be applicable? Does anyone know anyone that specializes, or at least has decent experience, in valuation of iPhone apps?
Is the thing making money right now? Then it is worth more than your development time.
You need to map out how much money this will make you, including your maintenance and upgrades, subtracting the fact that those things cost you time and money.
This company that's buying your product might have much larger things in mind, including advertising and integration with bigger services. You are offering time to market (they don't have to clone your code from scratch) and perhaps sales figures, if Apple hasn't already given that to them.
I would say, do not accept less than you're going to make in the next two years. If you think these guys are going to expand the thing, it might however be in your interest to sell for less up front in return for a take of gross.
posted by effugas at 5:07 PM on February 14, 2010
You need to map out how much money this will make you, including your maintenance and upgrades, subtracting the fact that those things cost you time and money.
This company that's buying your product might have much larger things in mind, including advertising and integration with bigger services. You are offering time to market (they don't have to clone your code from scratch) and perhaps sales figures, if Apple hasn't already given that to them.
I would say, do not accept less than you're going to make in the next two years. If you think these guys are going to expand the thing, it might however be in your interest to sell for less up front in return for a take of gross.
posted by effugas at 5:07 PM on February 14, 2010
Is there any chance you might consider taking the app to the store directly? You'd have more tools at hand to valuate - and can always sell later on once the app has a proven value.
Valuation-wise, assume the perfect world - everyone that has an ipod / iphone that might be interested in your app would buy it. Now divide by 10.
posted by chrisinseoul at 4:51 AM on February 15, 2010
Valuation-wise, assume the perfect world - everyone that has an ipod / iphone that might be interested in your app would buy it. Now divide by 10.
posted by chrisinseoul at 4:51 AM on February 15, 2010
This thread is closed to new comments.
Also ask for a very small percent of sales (5%-1%) with that. You can infer the value that they put on the app based on how they react to that %.
Feel free to email me if you want.
Here is a link to a kind of general valuation guideline from a company in the biz. Link.
posted by SantosLHalper at 4:59 PM on February 14, 2010