How do you sell a micro startup?
Haebom
Abroad, it’s actually quite common for someone to exit a service or product they've built alone, whether as a tiny startup or a side project. (The transaction process is easier than you might expect.) Recently, Marc Lou shared on his blog the story of how he sold his solo project service called Habits Garden, so I brought it here. Overseas, individual founders are known as 'solopreneurs'—a new term. If this topic interests you, try searching with that keyword!
Startup Valuation: A Simple Formula
Valuation = Annual Revenue x 3
For example, a habit tracking app making $300 a month could be sold for $10,800 (300x12x3).
Monthly Recurring Revenue (MRR) can be projected over a year, but one-time payments can't.
Sample criteria for deciding when to sell
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If you're running solo, is it possible to 10x your revenue in one year? NO
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Are you still interested in this market? NO
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Do you need money right now? Yes
=> That means now's the time to exit your micro startup!
Acquisition Process
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Paperwork: Prepare documents such as LOI (Letter of Intent) and APA (Asset Purchase Agreement), and so on.
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Payment: The buyer secures payment using a third party like Escrow.
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Asset transfer: Handover domain names, databases, credentials, etc.
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I post articles related to IT 💻, economy 💰, and humanities 🎭.
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haebom@kakao.com
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I post articles related to IT 💻, economy 💰, and humanities 🎭.
If you are curious about my thoughts, perspectives or interests, please subscribe.
haebom@kakao.com